The Hong Kong stock exchange is set to see a significant increase in IPOs in the coming months, according to JPMorgan.

This follows the successful listing of Contemporary Amperex Technology (CATL), which raised HK$35.7 billion (US$4.6 billion), the largest IPO globally this year.

CATL debuted on May 20, 2025, with shares rising 16.4% on the first day. The proceeds will fund factories overseas, currently accounting for 30% of its revenue.

In 2025, Hong Kong has raised US$7.7 billion from 22 IPOs, surpassing Nasdaq’s US$6.9 billion from 60 IPOs.

Hong Kong regulators are simplifying listing requirements for mainland Chinese firms to attract more companies in sectors like EVs, technology, and consumer products.

Proposed changes include lowering fundraising thresholds and optimizing market structures.

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🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Hong Kong’s IPO market leadership follows historical cyclical patterns

The current resurgence of Hong Kong’s IPO market echoes its previous periods of global dominance rather than representing an unprecedented phenomenon.

Hong Kong last claimed the title of the world’s largest IPO market in 2019, when 183 companies raised approximately US$40 billion, demonstrating the cyclical nature of IPO activity in the region1.

The current growth trajectory mirrors historical patterns where Hong Kong’s market alternates between periods of explosive growth and relative contraction, with the Q1 2025 performance showing a dramatic 287% year-over-year increase in funds raised (HKD 18.2 billion vs. HKD 4.7 billion in Q1 2024)2.

Hong Kong’s recurring ability to reclaim the top position in global IPO rankings reflects its resilience as a financial hub despite periodic market volatility, including several significant market crashes throughout its history3.

The exchange’s current momentum benefits from structural advantages developed over decades, including regulatory reforms and technological advancements that have enhanced market efficiency since HKEX was formed through the merger of three entities in 20004.

2️⃣ The EV battery sector exemplifies China’s industrial policy success

CATL’s landmark IPO represents more than just a single company success story—it showcases China’s strategic dominance in a critical future industry.

The global EV battery market is projected to grow from $91.93 billion in 2024 to $251.33 billion by 2035, with a CAGR of 9.6%, making it one of the fastest-growing industrial sectors worldwide5.

Chinese manufacturers already control a commanding 67.4% of the global EV battery market, with six Chinese firms ranking among the world’s top ten manufacturers, demonstrating how effective industrial policy has created global champions6.

CATL specifically has secured its leadership position through strategic partnerships with major automotive companies like Tesla, BMW, and Volkswagen, while continuing to invest in next-generation battery technologies that promise to extend its competitive advantage7.

The company’s focus on international expansion, earmarking its Hong Kong IPO proceeds for overseas factory construction, illustrates how Chinese battery manufacturers are leveraging capital markets to fund global growth strategies that further cement their industry dominance6.

3️⃣ Investor preferences shift toward profitable industry leaders amid economic uncertainty

Global capital flows to Hong Kong reflect a broader shift in investor preferences toward established, profitable companies rather than speculative growth stories.

Recent data shows that the share of new IPOs posting profits has surged across most regions, indicating investors are prioritizing financial stability and proven business models in an uncertain economic environment8.

CATL exemplifies this trend as a highly profitable market leader that delivered a 40.2% year-on-year jump in EV battery deliveries in Q1, while capturing 38.2% of the global market—precisely the type of established performer that attracts investor capital in the current climate.

This preference for “industry winners with proven business models” aligns with JPMorgan’s observation that “capital is going to flow to those industry leaders,” explaining why CATL’s shares jumped 16.4% on their trading debut despite global market volatility2.

The selective nature of current investor interest suggests that future successful Hong Kong IPOs will likely come from companies with similar characteristics: dominant market positions, proven profitability, and clear paths to international growth—a much narrower set of candidates than during previous IPO booms8.

Recent CATL developments

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