Chinese companies are seizing a rare window of opportunity to go public in Hong Kong. After more than three years of hesitation, IPO activity is surging again as global investors warm up to the region. This renewed interest follows DeepSeek’s artificial intelligence breakthrough in late January, which triggered optimism in Chinese tech and financial markets.
IPO excitement has reached levels not seen since the peak of 2021. Despite persistent U.S.-China trade tensions, the market now feels more energized and coordinated. George Chan, global IPO leader at EY, described the current momentum with enthusiasm. “Everyone is working so perfectly together — IPO candidates, the investors, and the regulators,” he said. “All these three parties are working so perfectly at this moment to actually cultivate a healthy Hong Kong IPO market.”
Investors Return to the Region
Long-term U.S. funds have started flowing back into China, signaling renewed confidence in the market. According to Chan, the strong performance of post-IPO stocks has played a key role in this resurgence. Investors want profitable exits, and the recent IPOs have delivered.
Chinese beverage chain Mixue (popular for its bubble tea) listed in Hong Kong on March 3. Its offering drew overwhelming demand, with heavy oversubscription reflecting pent-up investor appetite. Mixue’s successful debut marked a symbolic turning point. It hinted that the IPO freeze might finally be thawing.
In February, another major player stepped forward. Contemporary Amperex Technology (CATL), a global leader in electric vehicle batteries, filed for a Hong Kong listing. Market analysts expect this to become the city’s largest IPO since Kuaishou went public in 2021.
AI Buzz Ignites Market Momentum
DeepSeek’s bold claim in January that it had built an AI model with reasoning capabilities to rival OpenAI’s ChatGPT — and at a lower cost — electrified global tech stocks. The announcement came despite U.S. restrictions on chip exports to China, which many believed would hold back Chinese AI development.
Instead, DeepSeek’s breakthrough sparked a rally. Investors rushed into tech shares, and the Hang Seng Index soared to its highest level in three years. The market sensed a turning tide.
The Chinese government quickly capitalized on this momentum. In February, President Xi Jinping held a rare meeting with tech entrepreneurs. The gathering sent a clear message: Beijing plans to support the private sector after a few years of regulatory crackdowns. That shift in tone encouraged both entrepreneurs and foreign investors.
IPO Numbers Climb Sharply in Q1
According to KPMG, the first quarter of 2025 saw 15 IPOs in Hong Kong, raising a total of 17.7 billion Hong Kong dollars (about $2.3 billion USD). That figure marks the strongest first quarter since 2021. Six of those IPOs raised over 1 billion HKD each — a major jump from just one such listing during the same period last year.
While the numbers remain far below 2021’s boom, the recovery shows clear progress. In Q1 2021, Hong Kong hosted 32 IPOs that raised a staggering 132.7 billion HKD. Current activity has not yet reached that level, but the upward trend now appears sustainable.
The Hong Kong Stock Exchange has also done its part. It revised several listing rules to encourage more participation. Notably, the new rules now support dual listings for companies already trading on mainland exchanges. This flexibility opens the door for more high-profile IPOs.
More Companies Line Up for Listings
Tiger Brokers, a major underwriter for Chinese firms in U.S. and Hong Kong IPOs, confirmed a long list of companies preparing to list. Hengrui Pharmaceuticals, Mabwell, Haitian Flavoring and Food, Fortior Tech, and Sanhua Intelligent Controls are actively seeking Hong Kong listings.
Many of these firms already trade in mainland China, but they now want exposure to international investors. By listing in Hong Kong, they hope to broaden their capital base and fuel their global ambitions.
Tiger Brokers noted that Chinese regulators now encourage these cross-border listings. They view them as a way to support outbound mergers and acquisitions, boost company valuations, and strengthen foreign investor relations.
Difficult Memories Still Linger
While the recent momentum feels strong, some scars from the past still linger. In 2021, Didi’s controversial U.S. IPO triggered a storm of regulatory pushback in both China and the U.S. That incident effectively froze Chinese IPOs in New York, sending shockwaves through the startup world.
Since then, Chinese authorities have clarified rules for overseas listings. However, geopolitical uncertainty still hangs in the air. The U.S. has not softened its stance on China. The Biden administration has continued elements of the “America First Investment Policy,” inherited from Donald Trump. This includes tighter scrutiny of U.S. capital flowing into China and stricter tariffs.
Diplomatic tensions remain unresolved. Neither side has announced a planned summit between their leaders. Without high-level talks, hopes for a meaningful trade breakthrough remain slim.
Risks Still Exist, But Outlook Improves
Despite the enthusiasm, risks still loom over the market. George Chan from EY acknowledged the fragility of the current recovery. “At this point in time, all we can see is the good indicators,” he said. “But there could be one single incident happening which could pretty much reverse the trend.”
He emphasized the importance of sustaining momentum. “Things tend to have a pattern,” he noted. “If things can keep on for three months, four months, it will likely continue for the rest of the year.”
If Hong Kong maintains this trajectory, it could reclaim its place as Asia’s top IPO hub. With DeepSeek’s AI advancement lighting the spark, tech firms now feel emboldened. Investors, sensing a shift, have begun to chase early opportunities.
IPO pipelines are growing. Regulatory support is building. The tide may finally be turning for China’s capital markets. Whether the current surge transforms into a full-scale boom depends on macroeconomic stability and geopolitical diplomacy.
Still, the signals look promising. Hong Kong could soon witness a steady stream of Chinese innovators going public, backed by an increasingly optimistic global investor base.
Conclusion
The IPO landscape in Hong Kong has awakened after years of uncertainty. DeepSeek’s AI innovation helped unlock a wave of optimism, drawing investors back to Chinese markets. Coordinated efforts among companies, regulators, and capital providers now power the IPO resurgence. If momentum holds, 2025 may mark the beginning of a new era for Chinese companies on the global financial stage — and Hong Kong stands ready as the launchpad.