2nd July 2021 – PwC remains optimistic that the Hong Kong IPO market will continue to remain active and is on track to reach historical high in total funds raised. Hong Kong is predicted to remain as one of the world’s top three IPO markets in 2021, with an expected total fundraisings of HK$500 billion. It is estimated that more Environmental, Social and Governance (ESG) related business enterprises will be listed on the Hong Kong Stock Exchange (HKEX) in the second half of this year or next year. A strong IPO pipeline will help Hong Kong to continue establishing its position as the most important Asian IPO fund raising hub.

In the first half of 2021, there were a total of 47 new listings in Hong Kong. Total funds raised reached HK$212.96 billion, double last year’s total funds raised in the first 6 months. There was a strong performance on Main Board, which recorded 46 IPOs and HK$212.90 billion of total fundraising. Although the number of companies has decreased by 27%, in terms of total funds raised it has increased by 129%. This is mainly due to the fact that there were large-scale New Economy enteprise listings and US listed Chinese companies came to Hong Kong for secondary listing. Each of their values were over HK$10 billion. Companies seeking IPO are mainly from information technology & telecommunications and retail, consumer goods & services industries.

Eddie Wong, PwC Hong Kong Capital Markets Services Partner says: “With the start of economic recovery from the effects of the COVID-19 pandemic, Hong Kong’s IPO market remained active for the first six months of 2021, with total funds raised in the first 6 months double that of last year. We have observed that the New Economy and US listed Chinese enterprises remain as the main drivers for listing activities, successfully diversifying Hong Kong’s capital market and laying an important foundation for the future development of Hong Kong IPO market. The listings activities of biotech companies in 2021 will continue to be active and Hong Kong is gradually becoming the best listing platform for biotech companies in Asia.”

PwC predicts 150 IPOs in 2021, including 145 on Main Board, with an estimated total funds to be raised of HK$500 billion. This level of activity will possibly see the Hong Kong IPO market continue to thrive and diversify. HKEX is predicted to once again secure a place in the top three positions of the global IPO market rankings. It is estimated that more ESG related business enterprises will be listed on the HKEX in the second half of this year or next year.

Benson Wong, PwC Hong Kong Entrepreneur Group Leader says: “The Hong Kong IPO market for second half of 2021 is looking promising and we are confident that Hong Kong IPO market will continue to grow steadily. We predict that Hong Kong is expected to reach a record high with HK$500 billion in funds raised this year. The investment sentiment in the Hong Kong IPO market is expected to continue to improve, we expect the strong demand for IPO fund raising to continue. With ESG becoming a popular consideration factor for the investment sector in recent years, along with the support of government policies of different countries, environmental protection has become more and more important around the world, and more and more investors have begun to pay attention to related companies. We also predict that more ESG related business enterprises will be listed on the HKEX in the second half of this year or next year. As the best financing platform in Asia, Hong Kong will continue leading the market and play an active and important role in establishing China’s multi-level capital market.”

Looking at Mainland market, it has also continued to show signs of economic recovery from the COVID-19 pandemic in the first half of 2021. All in all, there were 245 IPOs on 4 Main Boards in the Mainland, with a total of RMB 210.9 billion funds raised. The number of IPOs increased by 108% year on year. Total funds raised increased by 51%. PwC expects stabilised growth in the mainland markets for 2021 with 430-490 new listings and RMB 500 billion total funds raised.