“If by the end of 2024, we only felt the presence of the wind, then this year, we truly feel the wind has arrived,” said Wang Yajun, Co-Head of Asia (ex-Japan) Equity Capital Markets at Goldman Sachs, during a media briefing on Thursday, referring to Chinese companies’ offshore fundraising.
China’s offshore IPO market has already recovered and that this trend will continue, Wang said.
Since the beginning of the year, A-share companies have been rushing to list in Hong Kong. Wang noted that the number of A+H share IPOs has shown a significant increase, and with the full recovery of overseas issuance markets and the accelerated return of long-term international investors, this wave of A+H share listings could last for two years.
China’s Offshore IPO Market Has Rebounded
According to Dealogic data, the total offshore fundraising by Chinese companies reached $44.8 billion in 2024, more than doubling from $19.5 billion in 2023. Although still below the historical average of $75 billion, this marks a clear inflection point. As of March 13, Chinese offshore fundraising over the past 10 weeks totaled $13 billion, a staggering 23-fold increase from the same period last year.
“If this trend continues, total fundraising for the year could reach around $65 billion, narrowing the gap with historical averages,” Wang said. “In addition, January and February are typically off-seasons for fundraising. To have $13 billion raised during this period is exceptionally busy from a historical perspective.”
International investor participation has also increased, and major IPOs such as Mixue Bingcheng, Guming, and Bloks successfully attracted cornerstone investors, Wang said. According to the Hong Kong Stock Exchange (HKEX), Mixue Bingcheng’s international offering (excluding cornerstone investors) was oversubscribed by about 70 times, Guming’s by 15 times, and Bloks’ by 39 times. More than 20 long-term institutional investors participated in each of these offerings.
By the end of 2024, long-term international investors had started returning to the Chinese market, and since the start of 2025, their participation has deepened, returning to levels seen in normal market years, Wang noted, adding that many IPOs have performed strongly post-listing, further reinforcing confidence in the market’s recovery.
“We can now say with certainty that China’s offshore IPO market has rebounded,” Wang said, expecting the recovery to continue for three key reasons:
- Valuation Gap – Even after the recent rally, Chinese stocks remain significantly cheaper than those in other global markets.
- Policy Support – Government macroeconomic stimulus policies have played a crucial role in stabilizing the market and strengthening fundamentals.
- Tech Confidence – The rise of companies like DeepSeek in AI has significantly changed international investors’ perception of Chinese tech stocks and broader Chinese assets.
Consumer Sector Leading the Recovery
A-share companies have been actively pursuing Hong Kong listings in 2024. Wang predicts a significant increase in A+H share IPOs this year compared to historical averages, with this wave potentially lasting for two years.
He highlighted the consumer sector as a frontrunner in the IPO resurgence due to:
- Simplicity – Consumer business models are straightforward and easy to understand, making due diligence and investment decisions simpler.
- Lower Geopolitical Risk – Consumer businesses primarily serve domestic markets, making them less susceptible to global political tensions.
- Stable Revenues – Consumer companies typically have steady revenue and profit streams, reducing operational risks.
Key IPO Reforms in Hong Kong
Hong Kong’s IPO market is also undergoing significant reforms. In December 2024, HKEX published a consultation paper on optimizing the IPO market’s pricing and public offering mechanisms, with the consultation period ending on March 19, 2025. Topics under discussion include reducing public float requirements and lowering the threshold for reallocation of shares in oversubscribed IPOs.
Wang noted that HKEX’s reforms include:
- Lowering public float requirements
- Reducing the retail investor allocation in IPOs
- Shortening lock-up periods
- Easing restrictions on the minimum number of investors required for an IPO
Previously, IPOs had to meet strict investor participation quotas to proceed, while the new rules aim to increase market efficiency and allow supply and demand to determine pricing more effectively.
“Hong Kong’s market reforms are a step in the right direction,” Wang said. “These changes align with industry calls for a more efficient market. We expect further measures in the future to enhance efficiency and strengthen Hong Kong’s position as a global financial hub.”