CICC(SH:601995) Xin Lang Cai Jing·2025-11-12 09:36Core Viewpoint - The Hong Kong capital market is experiencing a strong recovery, with the IPO market achieving its best performance in three years, driven by significant foreign investment and a robust pipeline of projects for future listings [1][2][4]. Group 1: IPO Market Performance - The total IPO financing in Hong Kong has surpassed $30 billion, a significant increase from $10 billion last year and less than $6 billion two years ago [1]. - A+H share listings have emerged as the dominant force, with 17 A+H IPOs contributing over $18 billion, accounting for 60% of the total market financing [1]. - Key sectors driving this financing include technology and high-end manufacturing, highlighting the market's support for critical areas of the real economy [1]. Group 2: Foreign Investment Participation - Foreign capital has played a crucial role in the IPO recovery, with cornerstone investments in Hong Kong IPOs reaching $12 billion, of which foreign investment accounts for 42% [2]. - Notably, international long-term investors and sovereign funds have become more active, with examples like CATL's Hong Kong international placement where foreign funds made up over 60% [2]. Group 3: Market Mechanisms and Trends - The new IPO mechanism introduced in August has invigorated the market, allowing for a fixed public subscription ratio of 10%-60%, which has increased institutional investor allocations and reduced selling pressure [3]. - Since the implementation of the new rules, 22 out of 25 new stocks have opted for the new mechanism, with 21 of them seeing price increases on their first trading day [3]. Group 4: Future Outlook and Project Pipeline - The sustainability of the IPO market's strong performance is supported by a solid pipeline of over 100 reserve projects, including plans from leading A-share companies to list in Hong Kong [4]. - The ongoing trend of companies returning to Hong Kong from the U.S. is providing additional support to the market, helping to alleviate potential delisting risks [3][4]. Group 5: M&A Market Dynamics - The M&A market is also thriving, with a reported 52 Chinese-related M&A projects this year, totaling $54.8 billion, capturing a 14% market share [5]. - There is a noticeable shift in M&A targets from traditional Western markets to Southeast Asia and regions along the Belt and Road, focusing on smaller projects valued below $300 million [5][6].