Mainland China and Hong Kong IPO markets: 2021 Q3 review

The IPO pipeline in Hong Kong remains robust with more than 200 companies seeking listings by the end of Q3. KPMG forecasts HK to see a record-breaking annual fundraising amount of HKD500 billion over 2021.

KPMG’s mainland China and HK 2021 Q3 IPO Review shows that, globally, totally funds raised reached USD330 billion during 2021 Q3 YTD, soaring to a 5-year high. The US, HK and A-share markets continue to lead the market, raising over a total of USD211.4 billion by the end of the third quarter of 2021. In terms of IPO proceeds, the Shanghai Stock Exchange ranked third among the top five stock exchanges year-to-date, with the Hong Kong Exchange following in fourth at USD35.7 billion. TMT, Industrials and Healthcare/Life Sciences were the top sectors, contributing over 69% of total funds raised in the US, HK and A-share markets.

In mainland China, the A-share IPO market witnessed a record high fundraising in 2021 Q3 YTD, recording 382 deals and raising a total of RMB 408.9 billion, driven by the continued popularity of STAR and ChiNext boards. 

The HK IPO market posted its strongest Q3 YTD performance in terms of total proceeds, recording 73 deals and raising HKD288.5 billion during the period. Chinese technology companies continue to be the top contributor in terms of funds raised – representing four out of the top 10 IPOs in terms of proceeds. KPMG expects Hong Kong to be among the top listing destinations for these companies in 2021 as new economy companies from mainland China continue to choose HK.

Hong Kong continues to be the natural choice for homecomings of US-listed mainland Chinese companies. During the period, two US-listed Chinese electric-vehicle makers completed dual primary listings in HK, raising a total of HKD29.5 billion, representing 10% of total funds raised for 2021 Q3 YTD. With the strategic benefits such as expanding investor base and mitigating market risks, more homecomings of US-listed mainland Chinese companies are expected. The biotech sector in HK has expanded rapidly since a new listing chapter was added in 2018. Solid market sentiment and investor appetite are present in the biotech sector. As of 22 September, there are 56 active healthcare or life sciences applicants in the pipeline, of which 27 are pre-revenue biotech companies.