Q1 2025 Review and Outlook for Chinese Mainland & HK IPO markets

• High quality, high technology and innovative companies are in good positions to go public in the A-share market
• Enhanced listing application procedures for A-share issuers, encouragement of leading Chinese enterprises to IPO in Hong Kong, more collaboration with Middle East and ASEAN countries and heightened geopolitical tensions set to drive listing trends in Hong Kong

The Deloitte China Capital Market Services Group today released its Q1 2025 review and outlook for the Chinese mainland and Hong Kong initial public offering (IPO) markets.

Amid challenges from the ongoing conflicts between Israel and Hamas and Russia and Ukraine, and the reciprocal tariffs set by the new US President, the global IPO market remained vibrant in Q1 2025, with a near 20% year-on-year increase in funds raised by the top 10 IPOs. A strong US dollar helped Nasdaq and New York Stock Exchange claim the top positions in IPO funds raised globally after India entered a bear market.

The A-share market slowed further amid continuous regulatory scrutiny of IPO candidates. Meanwhile, the Hong Kong market continued to pick up further with the support of large and medium-sized deals from Chinese businesses seeking international funds and boosting their brand eminence and globalization, backed by improved market liquidity, turnover, and valuations.

In the remaining three quarters of 2025, it is anticipated that listings of high-quality, high technology, and innovative companies will remain PRC regulators' priority. This will create a higher quality, healthier capital market in the longer run and is in line with the national government's work priorities for 2025. More A-share issuers, leading Chinese enterprises, Middle East and ASEAN companies and US-listed China concept stocks are expected to list in Hong Kong due to enhancements to the listing application procedures for A-share issuers, Chinese authorities' support for leading Chinese enterprises to list in the city, and heighted geopolitical tensions.

Following the listings of two AI-related businesses and a pork producer, which were both among the world's 10 biggest IPOs in Q1 2025, Nasdaq had most new listings and claimed top position in IPO funds raised among global stock exchanges. New York Stock Exchange followed, boosted by IPOs from a liquefied natural gas exporter and a defense and space systems maker. The former was the world's 2nd largest IPO in Q1.

The share flotation of a metal refiner was the world's largest IPO of the quarter, helping Tokyo Stock Exchange take 3rd position. Hong Kong Stock Exchange took 4th place with one large IPO and five medium-sized listings. The National Stock Exchange of India was in 5th following the IPO of an IT services management company, which was the world's 5th largest IPO of the quarter. Shenzhen and Shanghai Stock Exchange were in 9th and 10th place.

The continuous implementation of new capital market measures and policies have further slowed the pace of A-share IPO activity. Twenty-seven IPOs were completed raising RMB16.3 billion in Q1 2025 compared with 30 IPOs raising RMB23.6 billion in Q1 2024. This represents a 10% reduction in the number of IPOs and a 31% slip in proceeds. ChiNext emerged to become the largest stock exchange among other markets by number of IPOs (12) and funds raised (RMB7.2 billion). Fifteen new listings debuted on Shenzhen Stock Exchange raising RMB8.8 billion. Shanghai Stock Exchange saw nine IPOs raising RMB6.2 billion and Beijing Stock Exchange had three new listings raising RMB1.4 billion.

"The regulatory measures introduced in 2024 will continue to be implemented, setting the direction and pace of A-share IPO activity in 2025. The country's support and emphasis on technology and innovative sectors will also present good opportunities for companies in these sectors to raise more funds in the capital market, boost their development, and thrive,” says Tony Huang, A-Share Offering leader, Capital Market Services Group, Deloitte China. 

Hong Kong recorded 15 IPOs raising HKD18.2 billion in Q1 2025 versus 12 IPOs raising HKD4.7 billion in Q1 2024. The number of IPOs was up by 25% while proceeds rose 287%. The bulk of the proceeds came from the IPOs of two tea companies, a gold mining company, an aluminum manufacturer and a toy manufacturer from the Chinese mainland.

"We are pleased to see the Hong Kong IPO market rebound with a new listing from overseas company in Q1 2025, supported by improved market valuations and liquidity. This shows more great results from reforms and collaboration between Chinese mainland and Hong Kong authorities. This performance is consistent with our forecast for the Hong Kong IPO market in 2025, which we set last year, and helped Hong Kong retain 4th place in the competitive global IPO proceeds ranking," says Robert Lui, Southern Region Hong Kong Offering Services leader of the Capital Market Services Group, Deloitte China.

The Capital Market Services Group maintains its forecast for the Hong Kong IPO market in 2025 at about 80 IPOs raising approximately HKD130 billion to HKD150 billion from large A-share issuers; leading Chinese companies; US-listed China concept stocks; Middle East and ASEAN companies; technology companies, particularly those in AI; and life science and health care businesses.

"Regulators continue to cooperate with stock exchanges across a wide range of jurisdictions, particularly in ASEAN and the Middle East, while enhancing Connect programmes and advancing capital market reforms, including the potential plan to streamline listing reviews and lower listing thresholds for dual primary and secondary listings. We are confident that companies from more diverse jurisdictions and sectors will find Hong Kong an even more attractive destination for listing and fundraising," explains Edward Au, Southern Region managing partner, Deloitte China.

"In addition, the HKSAR government is actively working to attract more mainland and overseas strategic enterprises, family businesses, and private equity funds, to establish headquarters, operations and R&D centres in Hong Kong. This initiative could create a fresh pipeline of IPO candidates, especially in the technology and innovation sectors. These regulatory and government efforts will further reinforce Hong Kong's unique and vital position as an international financial center, a super-connector, and a super valuer-adder," adds Au.

In the US, 21 Chinese companies launched IPOs in Q1 2025, raising USD300 million, versus 12 new listings raising USD102 million in Q1 2024, with the number of new listings and proceeds surging by 75% and 194%. A large listing by a Hong Kong-listed biopharmaceutical firm contributed to nearly half of the proceeds raised by Chinese businesses in the US in Q1 2025.

"Amid various market rumours and the new trade policies of the US, we saw more Chinese companies list in the US this year than in the same period of 2024. This reflects the importance and recognition among Chinese companies of the US as a developed international market," tells Allen Lau, Capital Market Services Group National leader, Deloitte China

"Although most of these new listings were relatively small, the listings phenomenon also illustrates the pressing fundraising and 'go global' needs of many emerging Chinese businesses while IPO activity in their domestic market remains slow, and closely administered."

Notes to editors:

Unless specified otherwise, all statistics are updated with our estimates and analysis as of 31 March 2025 and exclude listings from by investment trust companies, closed-ended investment companies, closed-ended funds, special purpose acquisition companies (SPACs) and de-SPACs.

Sources for A-share IPO statistics: the China Securities Regulatory Commission, Shanghai Stock Exchange, Shenzhen Stock Exchange, Beijing Stock Exchange, Deloitte analysis.

Sources for Hong Kong IPO statistics: the Stock Exchange of Hong Kong, Deloitte estimates and analysis; excludes GEM to MB transfers and SPAC and de-SPAC listings.

Sources for global and US IPO (Chinese companies) statistics: Shanghai Stock Exchange, Nasdaq, the Stock Exchange of Hong Kong, National Stock Exchange of India, Tokyo Stock Exchange, Bloomberg, Dealogic and Deloitte analysis.