Hong Kong IPO proceeds to more than double to US$12.8b in 2024, KPMG forecasts

The firm expects 90 initial public offerings (IPOs) to raise HK$100 billion (US$12.8 billion), banking on stronger inter-connectivity with the Middle East and spin-off listing opportunities to fill the pipeline. Positive sentiment among investors in artificial intelligence or AI, semiconductor and green technology could fuel deals in these sectors.

“Hong Kong is well positioned to spark a recovery in its IPO activity by embracing these growing trends,” Irene Chu, head of new economy and life sciences in Hong Kong at KPMG China, said at a media briefing on Tuesday.

Hong Kong ranked sixth in the global IPO league table last year, when 70 companies raised HK$46.3 billion from local retail and global institutional investors, according to KPMG. Shanghai and Shenzhen topped the table, recording 210.8 billion yuan (US$29.5 billion) and 148.1 billion yuan, respectively, to reflect a 47 per cent and 32 per cent drop from a year earlier.

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The local bourse is looking to benefit from several listing reforms to make it easier for “specialist” technology companies and small companies in the Greater Bay Area to raise funds from the public. Recent efforts to boost financial linkages with Saudi Arabia could also yield results including cross-border listings, KPMG said.

CSOP Asset Management launched its CSOP Saudi Arabia ETF, an exchange-traded fund tracking the market’s biggest companies including top oil producer Saudi Aramco, in November. Hong Kong government officials have also approached the oil company to consider a secondary listing in the city.

Hong Kong Exchanges and Clearing has said that there were more than 90 applications in its IPO pipeline, including big-ticket deals like Cainiao Smart Logistics Network, which is widely expected to raise at least US$1 billion and white-goods giant Midea.

If successful, the Cainiao IPO would be the first entity within Alibaba Group Holding to be spun off since the e-commerce group reorganised into six major businesses in March last year. Alibaba, the owner of this newspaper, in November abandoned its plan to list the cloud-computing unit because of the US-China tech curbs, as well as the offering by online grocer Freshippo.

Meanwhile, China’s A-share or onshore market is expected to see a steady stream of IPOs after a sharp decline last year, with 780 applicants, KPMG said. Some 68 per cent are in the industrials and technology sectors as market regulators continue to support innovation and sustainability, it added.