<div id="readability-page-1"><div><div><p><span>Author: Zhou Ailin, Tencent Finance</span></p><p><span>When CATL priced at HK$628, raising HK$39.2 billion in the Hong Kong capital market; when MiniMax, Shenghong Technology, and Montage Technology, these AI large-scale model and industry chain companies, successively rang the gong at the Hong Kong Stock Exchange—behind every key moment of this feast, there is a common figure: Wall Street investment banks.</span></p><p><span>This is in stark contrast to the frozen state of Hong Kong stocks two or three years ago. By the end of 2024, the Hang Seng Index had fallen by nearly 50% in the past two years, and the chill in the secondary market directly transmitted to the primary market. Hong Kong IPO financing also shrank by more than 80%, Wall Street investment banks almost disappeared, and some even voluntarily abandoned some IPOs. But now, in 2026, Hong Kong is witnessing a long-awaited capital feast on an unprecedented scale.</span></p><p><span> In the first quarter of this year, total IPO fundraising in Hong Kong exceeded HK$109.9 billion, a year-on-year surge of 489%, ranking first among global exchanges. As of mid-May, cumulative fundraising this year has exceeded HK$150 billion. More than 500 companies are queuing up for IPOs, ranging from manufacturing giants with market capitalizations in the hundreds of billions to cash-burning AI unicorns, all regarding Hong Kong as a financing mecca. After a few years of downturn, foreign capital has returned to the Hong Kong market in the past two years. Although the scale is far smaller than that of Chinese capital, the growth rate is significant. According to the 2025 annual reports disclosed by major foreign securities firms operating in China, net profit growth has increased by 200%-600% compared to the previous year, with investment banking business contributing the majority, a trend that continues this year. However, liquidity challenges remain for the Hong Kong stock market. The AI ​​industry chain has become the &#34;one big trade,&#34; diverting liquidity from previously popular themes such as new consumption and innovative drugs. The pressure of initial share lock-up expirations is a challenge companies inevitably face after their IPOs. How do Wall Street investment banks view the subsequent trends of Hong Kong IPOs? Which sectors do international investors prefer? Can the AI ​​boom continue? Tencent Finance interviewed Huang Pei-hao, Head of Equity Capital Markets for Asia Pacific at JPMorgan Chase, to discuss these questions. </span></p><p><img src="https://imageproxy.pbkrs.com/https://img.jinse.com.cn/7472765_image3.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="600" height="543" original-src="https://imageproxy.pbkrs.com/https://img.jinse.com.cn/7472765_image3.png"/></p><h2>Investment banks are increasing staff to cope with the IPO boom</h2><p><span>“In the previous few years, the market was sluggish, but with the market recovery, leading institutions have been actively vying for top talent. Currently, institutions are continuously expanding their teams, and with the recovery of the capital market, competition for high-quality talent is becoming increasingly fierce. The ‘talent war’ is not only happening in Hong Kong, but also in the US investment banking market,” said Huang Peihao. Despite Wall Street investment banks' lack of dominance in A-share business, they still possess a distinct advantage over Chinese investment banks in the Hong Kong stock market—their ability to access international capital. Industry insiders also told Tencent Finance that IPOs are merely the first step in providing financial services to companies and major shareholders by comprehensive investment banks. For some high-profile IPOs, investment banks can further develop a full-lifecycle service model through subsequent refinancing, shareholder reductions, mergers and acquisitions, derivatives, and wealth management. This wave of Hong Kong IPOs has been gaining momentum since 2025. Not only has IPO financing become one of the best-performing years in the past decade, but financing products (convertible bonds/exchangeable bonds) have also reached record highs. Hong Kong stock market liquidity and southbound capital inflows through the Stock Connect program have both hit record highs. The momentum is expected to continue unabated in 2026. Data shows that total fundraising in the first quarter reached HK$109.9 billion, a year-on-year surge of 489%, with 40 companies listing in the first quarter, a year-on-year increase of 167%; as of May 13, fundraising reached HK$158.5 billion, a year-on-year increase of 574%; some international investment banks predict that the amount of IPOs and refinancing in Hong Kong this year is expected to exceed last year's, reaching a new high in the past five years. Huang Pei-hao stated that the shift in sentiment mainly occurred at several key junctures—since the &#34;9.24&#34; policy was introduced in 2024, market activity has shown a phased increase; in the second half of 2024, transactions represented by large A-to-H share projects such as Midea and SF Express were launched one after another; subsequently, CATL's A-to-H share project progressed, and after listing, the H-share price has consistently been higher than the A-share price; entering 2025, the DeepSeek era arrived, and the popularity of AI large-scale model companies and related projects further increased. Overall, both market sentiment and project quality have continued to improve. Currently, over 500 companies are still queuing for IPOs, and there is even a shortage of sponsors. Regarding the future market outlook, institutions believe that investors will continue to focus on several key areas: large-scale AI models, infrastructure-related hardware and power equipment, intelligent robots (physical AI), biopharmaceuticals, and AI drug discovery. &#34;In the absence of major external uncertainties, the market still has a good foundation for development. A company's leading position in its industry, its growth prospects, and its competitive advantages remain the core competitiveness that attracts global investors,&#34; said Huang Peihao. The so-called uncertainties, besides geopolitical risks, include rising inflation and growing concerns about interest rate hikes. The US April CPI significantly exceeded expectations, and the probability of a Fed rate hike this year is approaching 50% in the interest rate market, with the 10-year US Treasury yield reaching a new high of 4.6% in over a year. For Hong Kong stocks, a market highly sensitive to external changes, the future trends of the US dollar and interest rates are crucial. AI Becomes the &#34;Most Crowded Trade&#34; While Hong Kong stocks have performed well this year, their structure is extremely pronounced. The AI ​​industry chain has become increasingly attractive to investors, diverting funds from other sectors. Huang Pei-hao stated that in the past two to three months, with accelerated breakthroughs in AI technology, continuous expansion of application scenarios, and enhanced commercialization capabilities, the market's investment logic for the AI ​​industry has been further strengthened, making the AI ​​sector one of the most crowded trades in the current Hong Kong stock market. Although short-term adjustments due to market sentiment or external factors cannot be ruled out, in the long term, AI remains in a fluctuating upward trend, and global capital's willingness to invest in related fields remains strong. A recent study by an international investment bank noted that the capital market has become &#34;One Big Trade,&#34; meaning it's now a single, large-scale transaction driven by technology and AI. Over the past month, the S&amp;P 500 has hit 14 all-time highs, but market breadth has continued to narrow—the current median number of constituent stocks is 13% lower than its 52-week high, meaning the market is essentially driven by only a few AI-related leaders. Nvidia, with a market capitalization of only 9% of the S&amp;P 500, has single-handedly contributed 20% of the index's year-to-date gains. Similar trends are observed in the Asia-Pacific markets, including Hong Kong. The two model-driven stocks, Zhipu AI and MiniMax, have demonstrated significant fundraising effects. With their respective IPOs of HK$4.3 billion and HK$5.5 billion, they leveraged market capitalizations of HK$500 billion and nearly HK$400 billion respectively within months of listing, representing maximum gains of approximately 8-9 times. These two stocks serve as a &#34;thermometer&#34; of the AI ​​boom in Hong Kong stocks, even though the combined annual revenue of the two companies is less than HK$2 billion. It's not just large-scale models; hardware is also booming—PCB, chip, and equipment companies in the AI ​​infrastructure supply chain are the hardcore winners, experiencing explosive growth upon listing. Huang Pei-hao stated that the hard power of Chinese manufacturing companies should not be underestimated, and they are deeply integrated into the international supply chain. [Image of Chinese AI supply chain companies] Unlike large-scale model companies, these companies in the industrial chain have real revenue, real profits, and real customers, but they also enjoy the valuation premium brought by the AI ​​narrative—the market's PE ratio for them has far exceeded the level of traditional manufacturing. She also pointed out that the fundamentals and growth potential of some high-quality companies in the new consumption and pharmaceutical sectors have not changed, but they have been affected by the AI ​​theme drawing away market funds in stages. However, when the AI ​​sector experiences adjustments, market funds often refocus on previously overlooked sectors that have already become attractively valued. The first unlocking of shares remains the main test. In fact, the proportion of cornerstone investors in Hong Kong IPOs has been increasing, reaching nearly 50% of the IPO financing amount by 2025, with the proportion of foreign capital also rising. &#34;Due to the extremely hot market in IPO subscriptions, the overall subscription multiple is very high, resulting in an increase in the amount of global funds attracted. A notable example is the rising proportion of large, long-term US investors among cornerstone investors, reflecting, to some extent, the attention and interest of US investors in Hong Kong IPOs,&#34; said Huang Pei-hao. Of course, behind the active pursuit of becoming cornerstone investors, there is another reason—given the Hong Kong IPO mechanism, popular projects are so oversubscribed that if you don't become a cornerstone investor, the allocated amount may be very small. The global offering of a Hong Kong IPO typically consists of two parts: a Hong Kong public offering and an international offering. Cornerstone investors' shares are pre-allocated from the international offering portion and are subject to a &#34;lock-up allocation,&#34; requiring them to accept a six-month lock-up period. Taking MiniMax as an example, for retail investors, an oversubscription of 1837 times means: Assuming a maximum subscription of HK$1 million → Actual winning amount ≈ HK$1 million ÷ 1837 ≈ HK$544 → Approximately 3 shares, worth about HK$495 → Extremely low winning rate, unable to buy a meaningful position. While international offerings typically have lower oversubscription rates (15-37 times), the allocation is primarily driven by the issuer and lead underwriter, and usually favors well-known long-term investors, including sovereign wealth funds, international and domestic long-term funds, and strategic investors. The lock-up period for popular IPOs is approaching. Compiled by Tencent Finance</span></p><p><span>However, the lifting of share restrictions is a challenge that cannot be ignored. Over the past year, stock price volatility before and after the lifting of restrictions has increased significantly, with significant downward pressure in the short term.</span></p><p><span>Huang Peihao stated that regardless of the capital market in which a company is listed, the lifting of share restrictions (especially the first lifting of restrictions) is a core issue that every IPO company must face, and it is not a phenomenon unique to the Hong Kong stock market. Innovative technology companies have already introduced a large number of external pre-IPO investors before listing, and with the cornerstone investors' lock-up period ending, the combined pressure from these two groups exiting the lock-up period may lead to concentrated selling by shareholders and a stampede of panic selling.</span></p><p><span> She also suggested that listed companies must do two key things: maintain good investor relations, communicate with and guide investors to exit rationally after the lock-up period expires, and avoid concentrated selling that could impact the stock price; and continuously expand the base of new investors by including them in the Hong Kong Stock Connect, introducing new domestic and foreign funds, and attracting new institutional investors to absorb the shares released from lock-up, thus stabilizing liquidity and the stock price.</span></p></div></div></div>

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<p>The resurgence of Hong Kong IPOs is driven by Wall Street investment banks, with total fundraising in Q1 2026 reaching HK$109.9 billion, a 489% year-on-year increase. Over 500 companies are queued for IPOs, marking a significant recovery from previous downturns. Investment banks are expanding teams to meet demand, leveraging their access to international capital. The AI industry is a major focus, with expectations for continued growth in IPOs and financing products, as liquidity and capital inflows hit record highs.</p>

AI Craze Boosts Hong Kong IPOs; Wall Street Investment Banks Rush to Hong Kong