Core Viewpoint - The report from Open Source Securities indicates that the combination of the AtoH wave and the return of Chinese concept stocks is driving long-term asset expansion in the Hong Kong stock market, leading to sustained net inflows of southbound funds and active trading volumes in the market. The Hong Kong Stock Exchange (HKEX) is expected to benefit from the anticipated foreign capital inflow due to potential interest rate cuts by the Federal Reserve, maintaining a high level of business performance and a "buy" rating for the stock [1]. Group 1 - The active spot ADT is driving significant increases in trading and settlement revenues, with trading fees and system usage fees reaching HKD 7.8 billion, a year-on-year increase of 57%, including spot/derivatives/commodity revenues of HKD 4.7 billion/HKD 2.0 billion/HKD 1.1 billion, which are year-on-year increases of 116%/15%/6% [2]. - The Hong Kong stock market is experiencing a high level of activity, with 69 new listings in the first three quarters of 2025, a year-on-year increase of 53%, and total fundraising amounting to HKD 188.3 billion, more than three times that of the same period in 2024 [2]. - The report highlights that the trading volume increase indirectly boosts custodial, trustee, and agent service fees, as well as market data fees, which have seen year-on-year increases of 25% and 8%, respectively [2]. Group 2 - The investment yield of HKEX has decreased, with a projected dividend yield of 3.0% for 2025, indicating potential for valuation improvement. The net investment income for the first three quarters of 2025 is HKD 3.89 billion, a year-on-year increase of 4% [3]. - The expected dividend yield for 2025, assuming a constant payout ratio of 90%, is 3.0%, while the current yield on U.S. Treasury bonds is 4.10%. The anticipated interest rate cuts by the Federal Reserve are expected to drive foreign capital back into the Hong Kong stock market [3]. - The current price-to-earnings ratio (PE-TTM) for the company is 31.2 times, which is at the 22nd percentile of the past ten years, with a dynamic PE of 30.2 times, indicating potential for valuation enhancement [3].

Core Insights - The Hong Kong IPO market has surpassed 200 billion HKD, reaching 2164.74 billion HKD, marking a significant recovery since 2021 [1][3] - The ongoing IPO boom is expected to continue, with many companies waiting to go public in the coming months [1][3] IPO Market Performance - The peak years for Hong Kong IPOs were from 2019 to 2021, with annual IPO volumes exceeding 300 billion HKD. In contrast, the market faced a downturn from 2022 to 2024, with 2023 seeing IPO volumes below 50 billion HKD [3] - Since 2025, the IPO market has rebounded, with major listings such as CATL raising 41 billion HKD, the largest IPO globally this year [3][4] Investor Sentiment and Market Dynamics - The average return for newly listed companies in the first trading day is approximately 38%, with a one-month return of 36% and a three-month return of 60%, significantly higher than the average returns of the past five years [4] - The IPO market has seen record-breaking subscription amounts, with Mxue Group's subscription reaching 1.77 trillion HKD, surpassing previous records [3] External Investment Trends - There is a notable influx of foreign capital into the Hong Kong market, driven by the demand for diversified investments and the recent easing of interest rates by the Federal Reserve [7] - The return of Chinese concept stocks is anticipated to contribute to the IPO volume, as these companies seek to list in Hong Kong due to regulatory advantages and investor familiarity [10] Regulatory Environment and Future Outlook - The Hong Kong Stock Exchange has implemented reforms to streamline the IPO process, reducing approval times and enhancing the attractiveness of the market for new listings [9] - With nearly 300 companies preparing for IPOs, the market is expected to maintain its momentum, supported by a favorable regulatory environment and strong demand from both local and foreign investors [9][10]

香港IPO总金额再破2000亿港元大关。 2025年以来，香港IPO市场持续高歌猛进，而在近期港股IPO规模已达到2164.74亿港元。这是自2021年的高峰后，时隔4年香港 IPO再次突破2000亿港元。同时，2025年后续2个月仍有大量公司等待上市，香港IPO正不断逼近2019年至2021年间所创下的3000 亿港元巅峰。 本轮香港IPO热潮超出了绝大多数业内人士的预期。多位接受证券时报记者采访的人士认为，香港IPO的热潮在未来仍将持续。 多项IPO数据创纪录 Wind数据显示，从最近10年香港IPO数据来看，2019年至2021年的3年是香港IPO的巅峰时期，这3年的年度IPO规模均突破3000亿 港元，随后在2022至2024年这3年间陷入低谷，其中2023年的IPO规模甚至不到500亿港元，2024年稍有恢复，但也仅有879亿港 元。 与之对应的是，外资正纷至沓来。在赖烨烨看来，今年以来被动型外资维持净流入港股的趋势不变，但主动型外资尚未形成趋势 性回流。在全球市场波动成为常态的背景下，资金对于分散配置的需求上升，且美联储已重启降息周期，随着新股的赚钱效应凸 显，有望吸引更多的主动型外资投资者参与新 ...

Investment Rating - The investment rating for Hong Kong Exchanges and Clearing Limited is "Buy" (maintained) [1] Core Views - The report highlights a significant improvement in ADT-related businesses, indicating potential for valuation uplift. The company's revenue and profit attributable to shareholders for the first three quarters of 2025 reached HKD 218.5 billion and HKD 134.2 billion, respectively, representing year-on-year increases of 37% and 45% [5][6] - The report anticipates continued high growth in the company's fundamentals, driven by increased trading volumes and a favorable market environment, including the return of Chinese concept stocks and sustained net inflows from southbound capital [5][6] Financial Performance Summary - For Q1-Q3 2025, trading, settlement, listing, custody, data, and other investment net income grew by 57%, 66%, 16%, 25%, 8%, 10%, and 4% year-on-year, respectively. The core driver of revenue growth is the significant increase in trading and settlement fees directly linked to ADT [5][6] - The report revises the ADT assumptions for Hong Kong stocks for 2025-2027 to HKD 2,580 billion, HKD 2,620 billion, and HKD 2,700 billion, reflecting year-on-year growth of 96%, 2%, and 3%, respectively. The forecast for net profit attributable to shareholders is adjusted to HKD 179 billion, HKD 192 billion, and HKD 202 billion for the same period, with corresponding EPS of HKD 14, HKD 15, and HKD 16 [5][6] Market Trends and Drivers - The report notes a robust primary market for Hong Kong stocks, with 69 new listings in Q1-Q3 2025, a 53% increase year-on-year, and total fundraising amounting to HKD 1,883 billion, more than three times that of the same period in 2024. The number of new stock applications being processed reached 297, over three times the 84 applications at the end of 2024 [7] - The report emphasizes that the high trading volume indirectly boosts income from custody, trustee, and agent services, as well as market data fees, which grew by 25% and 8% year-on-year, respectively [7] Valuation and Dividend Outlook - The investment income for Q1-Q3 2025 was HKD 38.9 billion, a 4% year-on-year increase. The expected dividend yield for 2025 is projected at 3.0%, assuming a constant payout ratio of 90%. The report suggests that a potential interest rate cut by the Federal Reserve could drive foreign capital back to the Hong Kong market, benefiting the exchange [8] - The current PE ratio is 31.2, positioned at the 22nd percentile over the past decade, with a dynamic PE of 30.2, indicating potential for valuation improvement [8]

Core Insights - The Hong Kong IPO market has seen a significant resurgence since 2025, with the total IPO scale reaching 2,164.74 billion HKD, marking a return to levels not seen since 2021 [1][2] - The current IPO boom is expected to continue, with many companies waiting to go public in the coming months, potentially approaching the peak of 3,000 billion HKD reached between 2019 and 2021 [1][6] IPO Market Performance - The recent years from 2019 to 2021 were the peak for Hong Kong IPOs, with annual scales exceeding 3,000 billion HKD, while 2022 to 2024 saw a significant decline, with 2023's IPO scale dropping below 500 billion HKD [2] - In 2025, the IPO market has rebounded, with notable large IPOs such as CATL raising 41 billion HKD, making it the largest IPO globally this year [2][3] Investor Sentiment and Market Dynamics - New IPO companies in Hong Kong have shown significantly better stock performance compared to the past five years, with an average return of 38% on the first trading day and 60% after three months [3] - The IPO market has been characterized by high demand, with record subscription amounts, such as 1.77 trillion HKD for Mixue Group, surpassing previous records [2][4] Market Activity and Trends - The Hong Kong IPO market has been exceptionally busy, exceeding initial fundraising expectations for the year, with a total of 2,154.6 billion HKD raised in the first ten months [4] - The influx of foreign capital is noted, with passive foreign investments maintaining a net inflow trend, while active foreign investments are expected to increase as new stocks demonstrate profitability [4][6] Regulatory Environment and Future Outlook - The Hong Kong Stock Exchange has implemented reforms to streamline the IPO process, reducing approval times and enhancing the attractiveness of the market for new listings [6] - There is an expectation for a continued influx of companies preparing for IPOs, with nearly 300 companies currently in the pipeline, indicating a robust future for the market [6][7] Return of Chinese Concept Stocks - The return of Chinese concept stocks is anticipated to contribute to the IPO market's growth, as these companies seek to leverage the advantages of the Hong Kong market amid ongoing U.S.-China tensions [7] - The positive cycle of supply and demand in the market is expected to support continued interest from both high-growth companies and foreign investors [7]

Core Insights - The Hong Kong stock market is experiencing a strong rebound, particularly in the Hang Seng Technology Index and the biopharmaceutical sector, driven by long-term economic transformation and short-term liquidity improvements [3][4]. Group 1: Market Structure Changes - Over the past decade, the Hong Kong market has shifted from being dominated by financial and real estate sectors to a focus on technology companies, aligning with China's economic structural upgrades [3][4]. - The introduction of various institutional innovations has attracted more unique and high-quality companies to list on the Hong Kong Stock Exchange [3]. Group 2: Factors Driving Market Growth - Improved liquidity is identified as the most direct driving force, with a significant recovery in market conditions since last year, leading to a narrowing of the valuation gap between Hong Kong and A-share markets [4]. - Many companies are increasingly focusing on shareholder returns, with major blue-chip companies achieving annual shareholder yields of 5% to 10% through dividends and buybacks, reflecting a recognition of long-term value [4]. - The surge in the technology and biopharmaceutical sectors is closely linked to collaborations and acquisitions by international pharmaceutical companies with Chinese firms, supported by China's strong new drug pipeline [4][5]. Group 3: Market Resilience and Future Outlook - The risk of delisting for Chinese companies in the U.S. has pressured the market, but Hong Kong has successfully attracted many of these companies for secondary or dual listings, alleviating concerns and drawing international investment [5]. - The rise of the Hang Seng Technology and biopharmaceutical sectors is seen as a result of market structure optimization and a renewed prosperity in China's capital markets, indicating the start of a new development cycle [6].

Group 1 - The recent trend of Chinese concept stocks returning to Hong Kong is primarily driven by companies in new economic sectors such as autonomous driving and biomedicine, indicating strategic adjustments and changes in global asset allocation [1][2] - The tightening regulatory environment in overseas markets, particularly the proposed changes by Nasdaq, has prompted companies to consider a dual listing in Hong Kong as a risk mitigation strategy, allowing them to diversify their shareholder base and avoid uncertainties in a single market [1][2] - The return of these companies to Hong Kong is not only for financing purposes but also represents a strategic move to align with local industry resources and attract investors who better understand their market positions and growth prospects [2][3] Group 2 - The return of Chinese concept stocks to Hong Kong is supported by the collaboration of regulatory bodies in mainland China and Hong Kong, which have simplified procedures and eased restrictions on cross-border capital flows [2][3] - The Hong Kong Stock Exchange has implemented continuous reforms, such as allowing dual-class shares and easing listing requirements for unprofitable biotech firms, which have facilitated the return of these companies [3] - The Hong Kong government has expressed its commitment to assist Chinese concept stocks in making Hong Kong their preferred return destination, enhancing the market's attractiveness for hard tech companies [3]

Core Insights - A total of 37 Chinese concept stocks have returned to the Hong Kong market through dual primary listings or secondary listings as of October 21, with 24 companies opting for dual primary listings and 13 for secondary listings [1][4] - The return of Chinese concept stocks is primarily driven by companies in the frontier technology sector, including smart driving, biotechnology, and advanced manufacturing [1][6] - The Hong Kong Stock Exchange (HKEX) offers significant advantages in terms of listing time, procedures, costs, and exemption conditions, which is expected to facilitate the continued return of Chinese concept stocks [1][6] Group 1 - Recent dual primary listings include smart driving companies WeRide and Pony.ai, which have both passed the HKEX hearing and are set to list [2] - The dual primary listing strategy is seen as crucial for smart driving companies to expand financing channels, enhance valuation stability, and connect with core markets [2] - Biotech companies are also planning dual primary listings, with Tianjing Biotechnology announcing its intention to conduct an IPO in Hong Kong [2] Group 2 - Hesai Technology became the first lidar company to achieve a dual primary listing, raising over 4.16 billion HKD, marking the largest IPO by a Chinese concept stock returning to Hong Kong in nearly four years [3] - The return of high-quality Chinese concept stocks to the Hong Kong market is supported by favorable policies and ongoing market reforms [4] - The HKEX has introduced mechanisms such as "same share, different rights" and relaxed listing requirements for unprofitable biotech firms, enhancing its capacity to accommodate Chinese concept stocks [4]

Core Insights - A total of 37 Chinese concept stocks have returned to the Hong Kong market through dual primary listings or secondary listings as of October 21, indicating a significant trend of quality Chinese companies returning to Hong Kong [1][4] - The technology sector, particularly in areas such as smart driving, biotechnology, and advanced manufacturing, has become a new driving force for the return of Chinese concept stocks to Hong Kong [1][5] - The Hong Kong Stock Exchange (HKEX) offers advantages in terms of listing time, procedures, costs, and exemption conditions, which are expected to facilitate the continued return of Chinese concept stocks [1][5] Group 1: Recent Listings - Smart driving companies, such as WeRide and Pony.ai, have recently passed the HKEX hearing, indicating their imminent dual primary listings on both NASDAQ and HKEX [2] - The dual primary listing is strategically significant for smart driving companies as it broadens financing channels and enhances valuation stability [2] Group 2: Market Trends - The return of quality Chinese concept stocks to the Hong Kong market is supported by favorable policies and ongoing reforms in the Hong Kong market [4][5] - The average daily trading volume in the Hong Kong market has increased by 132% year-on-year, reaching 2,483 billion HKD in the first eight months of this year, reflecting enhanced liquidity [5] Group 3: Policy Support - The China Securities Regulatory Commission (CSRC) has expressed support for quality Chinese concept stocks to return to the domestic and Hong Kong markets [4] - The Hong Kong government has also indicated its commitment to making Hong Kong the preferred return destination for Chinese concept stocks [4]

Group 1 - The Hong Kong IPO market is experiencing a recovery since the second half of last year, with a significant increase in fundraising activities, making it the top global market for fundraising in 2025 [1][2] - In 2025, the total equity financing in the Hong Kong primary market reached HKD 437.59 billion, a year-on-year increase of 260.41%, indicating a notable rise in market activity [1][2] - A total of 71 new IPOs have been listed in Hong Kong since 2025, raising approximately HKD 189.32 billion, with a high concentration in sectors such as information technology, healthcare, and industrials [1][2] Group 2 - The "A+H" listing model is expanding, with 83 A-share companies submitting applications to the Hong Kong Stock Exchange in 2025, surpassing the total from the past decade [1][2] - The month of June saw the highest number of applications, with 65 companies, followed by September with 60 applications [1][2] - Recent weeks have shown increased activity, with multiple companies listing and submitting applications simultaneously [1][2] Group 3 - The Hong Kong Stock Exchange has lowered the listing thresholds for specialized technology companies, reducing the market capitalization requirement for commercialized companies from HKD 6 billion to HKD 4 billion [2] - The China Securities Regulatory Commission and the Hong Kong Securities and Futures Commission have streamlined the approval process for A-share companies seeking to list in Hong Kong, promoting a more normalized "dual listing" mechanism [2] Group 4 - The IPO market in Hong Kong is characterized by a "Matthew Effect," where large projects are predominantly led by top investment banks, while some smaller banks only participate in a single IPO [4] - Major IPOs this year include companies like CATL, Hengrui Medicine, and Haitian Flavoring, with leading investment banks like CICC and Goldman Sachs playing significant roles [4] Group 5 - A-share hard technology companies are becoming the main force in Hong Kong IPOs, with sectors like power equipment, electronics, and biopharmaceuticals accounting for 50% of listings [5] - The return of Chinese concept stocks to Hong Kong is expected to enhance market liquidity, with estimates suggesting that nearly 30 companies could meet the criteria for secondary listings, potentially increasing daily trading volume significantly [5] Group 6 - The Hong Kong Stock Exchange has launched a "New Stock Connect" pre-roadshow platform to facilitate order entry by potential investors, aiming to reduce congestion during peak booking periods [6] - As of 2025, net inflows from mainland funds into the Hong Kong stock market have exceeded HKD 450 billion, marking a historical high, with these funds primarily directed towards sectors aligned with recent IPO applications [6] - Despite the positive trends, there are concerns about rising first-day share price drop rates and potential market volatility affecting the sustainability of the IPO boom [6]