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The Hong Kong initial public offering ( IPO ) market has shown remarkable momentum in the first quarter of 2025, recording a significant uptake in large IPO deals, with six offerings raising over HK$1 billion ( US$128.52 million ), compared with just one during the same quarter last year, according to a recent report.
This strong performance builds on the influx of large IPOs completed in the late 2024, finds the report by global accounting firm KPMG, and it has been further bolstered by the growing popularity of DeepSeek, which has shifted global investor interest towards Chinese mainland tech companies.
Improved market sentiment, combined with enhanced market liquidity, has created favourable conditions for high-tech companies to list in Hong Kong throughout 2025. Meanwhile, the increasing popularity of A+H companies – A-shares, mainland-incorporated companies traded on the Shanghai and Shenzhen stock exchanges, and H-shares, mainland-incorporated companies traded on the Hong Kong Stock Exchange – has been driven by regulatory encouragement and the desire to access international capital markets.
Global IPO markets raised a total of US$28.2 billion through 283 deals in Q1 2025, the accounting firm notes, marking a slight increase of 4% in funds raised with a similar level of number of deals compared with Q1 2024.
The US stock exchanges led all global stock exchanges in terms of funds raised, accounting for approximately 30% of the global proceeds from IPOs. The Tokyo Stock Exchange ranked third, buoyed by the completion of the largest IPO in 2025 to date. Hong Kong, meanwhile, ranked fourth globally in funds raised.
Heightened high-tech interest
“Despite ongoing uncertainty surrounding trade tariffs and interest rates, global investors remain optimistic about AI [artificial intelligence] and its immense growth potential,” shares Paul Lau, KPMG China’s head of capital markets and professional practice. “The widespread adoption of AI will continue to attract market attention, enabling tech companies to achieve stronger valuations and seize opportunities to go public.”
The A-share stock exchanges collectively raised 25.5 billion yuan ( US$3.5 billion ) across 33 deals in the first quarter of 2025, KPMG shares, marking a 34% reduction in funds raised and an 8% decrease in deal volume compared with the same period in 2024. More than 35% of total proceeds were from the listing of six real estate investment trusts.
“Following the Two Sessions [meetings], the China Securities Regulatory Commission has proposed a new phase of capital reform intended to drive comprehensive investment changes, prioritizing high-quality development and risk mitigation,” states Irene Chu, KPMG China’s head of new economy and life sciences for Hong Kong. “In particular, supporting the listing of high-quality, but not yet profitable, technology start-ups will further propel innovation and growth of Chinese mainland tech companies.”
Positive momentum
Building on the positive momentum from the latter part of 2024, the Hong Kong IPO market has begun 2025 with a strong start. In Q1 2025, the city raised HK$17.7 billion across 15 IPOs, the accounting firm notes, nearly three times higher than the funds raised in the same period last year, and the highest first quarter amount since 2021.
This was driven not only by a 25% increase in the number of completed deals, but also by a 195% growth in the average deal size, thanks to six IPOs exceeding HK$1 billion in funds raised.
The heightened interest in Chinese mainland tech companies following the popularization of DeepSeek played a pivotal role in boosting overall market liquidity and valuations, KPMG points out, but for the five largest IPOs in Q1 2025, three of them belonged to the consumer sector, with the largest IPO of the year being the Chinese mainland’s largest bubble tea chain.
The growing momentum is further reflected in the IPO pipeline, which now includes 120 applicants, up from 86 as of December 31 2024. The uptick can be attributed to 51 companies submitting their first application during the quarter, up from 24 in the previous quarter.
The A+H listing model has also gained traction, with one-fourth of those new applications coming from companies already listed on the A-share market.
Positive moves
The Hong Kong Stock Exchange recently reviewed its regulatory framework concerning the IPO price discovery process and open market requirements. Proposed measures, KPMG says, aim to provide greater flexibility for companies in managing their capital structure and enhancing liquidity, particularly for those listing through the A+H listing model.
In its 2025-26 budget speech, the Hong Kong government, the accounting firm notes, emphasized its commitment to strengthening Hong Kong’s position as a leading international financial centre.
Supportive policies and reforms for the IPO market include:
“The improved investor confidence and the recent AI hype are driving more early-stage Chinese mainland tech companies to consider a Hong Kong IPO under the specialist technology listing regime,” adds Louis Lau, KPMG China’s head of Hong Kong capital markets group. “We’ve also seen a number of sizable A-share issuers submitting their H-share listing applications recently. Hong Kong is poised for a dynamic year in IPO activity, driven by its focus on high-growth sectors, as well as the increasing participation of A+H companies.”
