Mainland China-listed companies are increasingly turning to Hong Kong for new share offerings, spurred by attractive valuations, strong liquidity, and supportive regulatory policies. A notable example is Contemporary Amperex Technology (CATL), the world’s largest electric vehicle battery producer, which is preparing for an estimated US$5 billion share offering. The deal is expected to be the largest in Hong Kong this year, surpassing Kuaishou Technology’s US$6.2 billion initial public offering (IPO) in January 2021. CATL’s move follows approval from the Hong Kong stock exchange’s listing committee.
CATL is one of 30 A-share companies that have already applied for H-share offerings in Hong Kong in 2024, more than double the number of applications last year. This increase is part of a broader trend, as 46 A-share companies are expected to list in Hong Kong this year, according to local media reports. The Hong Kong stock exchange has seen an average of five such applications annually from 2016 to 2023, signaling a significant rise in interest.
This surge is further supported by regulatory initiatives from the China Securities Regulatory Commission (CSRC), which recently announced plans to streamline the filing process for overseas listings. This regulatory support, along with measures introduced in April 2024 to facilitate IPOs of leading Chinese companies in Hong Kong, is expected to continue boosting the A-to-H listing trend. Additionally, narrowing price discrepancies between Hong Kong and mainland China stocks have made Hong Kong a more attractive destination for Chinese companies. The difference between A-share and H-share prices has decreased by 6.8% this year, reducing the discount on Hong Kong-listed shares.
The strong recovery of Hong Kong’s market, compared to the mainland, has also drawn mainland companies to the city. The Hang Seng Index has risen by nearly 13% this year, while the CSI 300 Index, which tracks mainland stocks, has declined by 3.2%. The influx of mainland capital into Hong Kong has further supported this trend, with a significant rise in fund flows through the Hong Kong-Shenzhen Stock Connect. Analysts forecast that net southbound inflows could increase by almost 50% this year, underscoring Hong Kong’s continued role as a key international financial hub.
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