Law firm interviewed: Eric Chow & Co. (in association with Commerce and Finance Law Offices)
Hong Kong's initial public offering (IPO) market is showing signs of revival, with the Hong Kong Stock Exchange (HKEX) emerging as an increasingly attractive destination for Chinese companies during a period of global uncertainty.
In 2024, the HKEX recorded 71 new listings, raising $11.2 billion - an 88.9 percent year-on-year increase that positioned Hong Kong as the world's fourth-largest IPO venue. This surge has benefited Chinese law firms acting as PRC counsel, with Red Circle firm Jingtian & Gongcheng leading with 29 deals, followed by King & Wood Mallesons with 17 deals, and Commerce & Finance Law Offices with 14 deals.
The upward trajectory is expected to continue, with PwC projecting Hong Kong's IPO fundraising to reach $16-20 billion in 2025, potentially elevating the SAR to one of the top three global IPO destinations.
"We anticipate a rebound in the Hong Kong IPO market in the coming year, driven by A-share listings and secondary offerings from Chinese companies previously listed overseas," says Eric Chow, managing partner of Commerce & Finance Law Offices’ Hong Kong association firm Eric Chow & Co. He expects larger deal sizes, particularly in technology, healthcare, and consumer goods sectors.
Specifically, the Hong Kong IPO market has seen strong interest from Chinese companies in strategic sectors, buoyed by improving investor sentiment following Beijing's renewed support for private firms and recent technological breakthroughs, such as those from DeepSeek, a homegrown AI start-up.
“This shift not only reflects China’s strategic priorities but also suggests a broader evolution of the market landscape,” says Chow. The rise of new listing vehicles, such as de-SPAC transactions and specialist technology company listings under Chapter 18C, has added complexity to the regulatory landscape, requiring legal advisors to stay ahead of regulatory changes and adapt their services accordingly.
Notably, Chow points out that PRC law firms are increasingly taking on roles traditionally held by international firms, particularly as issuer counsels during IPOs. This shift is attributed to their deep understanding of Mainland Chinese companies' business models and extensive networks across China.
"Chinese law firms in Hong Kong are cultivating a diverse talent pool, often including professionals from top U.S. and U.K. firms," Chow explains. "This infusion of expertise enables them to deliver high quality and technical precision while focusing primarily on the needs of PRC clients."
The current geopolitical landscape is also significantly influencing this trend. Rising U.S.-China tensions have made Hong Kong an increasingly attractive listing destination for Chinese companies, including those seeking secondary listings after listing in the United States. “We also see potential for increased interest from international investors looking for diversified portfolios, which could further bolster the market,” adds Chow.
While some Chinese companies may still pursue dual listings, many are focusing solely on Hong Kong as their primary listing venue. "For many, the primary focus will be on leveraging Hong Kong's status as an international financial hub, which allows for a diverse range of opportunities without the additional complexities of U.S. regulatory requirements," Chow explains.
For Chinese companies considering a Hong Kong listing, they must navigate both Hong Kong's listing rules and the China Securities Regulatory Commission's requirements for offshore listings. “While the streamlined IPO process in Hong Kong, which features a 40-business-day review timeline, offers predictability, thorough preparation is essential to meet these regulatory standards,” notes Chow.
Besides, buoyed by measures rolled out by the HKEX to enhance accessibility from global investors to opportunities in China, companies in strategic sectors, including AI, semiconductors, and new energy are expected to benefit from a Hong Kong listing. “However, they must ensure compliance with relevant regulations and demonstrate a clear growth strategy to enhance their attractiveness to investors,” adds Chow.
Looking ahead, ongoing regulatory reforms and enhanced connectivity between Hong Kong and mainland markets are driving demand for cross-border expertise. A-share companies seeking secondary listings in Hong Kong are expected to continue generating significant opportunities for legal advisors with expertise in both markets.
“We remain optimistic that these trends will continue to gain momentum,” adds Chow.
