Hong Kong’s initial public offering or IPO market has been quite dull in 2023. As we approach the end of the year, two Chinese companies are rushing to debut on the Hong Kong stock exchange – iMotion Automotive Technology and Henan Jinyuan Hydrogenated Chemicals. The two companies aim to raise $130 million collectively.
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Automated driving systems company iMotion aims to secure about $84 million through its IPO in Hong Kong. It will offer 22.11 million shares at HK$29.65 each. Also, Henan Jinyuan, a leading supplier of hydrogenated benzene-based chemicals, plans to raise up to $46 million by offering 238.9 million shares in the price range of HK$1.10 to HK$1.50 each.
Record-Low Number of Hong Kong IPO Deals
Hong Kong has consistently held the top position as the IPO venue globally for seven out of the past 13 years. Some of the well-known companies listed in Hong Kong are Tencent Holdings Limited (HK: 0700), Alibaba Group Holdings Limited (HK:9988) (NYSE:BABA), and China Mobile Limited (HK:80941).
However, in 2023, the Hong Kong stock market has seen a record-low number of IPO deals, down 19% to 61 compared to the last year, as revealed by an EY report. Further, the total amount raised declined by 59% to HK$41.3 billion, marking the lowest level in the last 20 years.
This dull performance is primarily due to the overall subdued investor interest in the market, triggered by higher interest rates. Additionally, many companies preferred their listing in the U.S. stock market over Hong Kong, which further contributed to the downfall.
As a result, Hong Kong is now taking initiatives to boost its IPO deals and enhance the overall appeal of its capital market. In November, the Hong Kong Stock Exchange introduced a new digital IPO platform called FINI (Fast Interface for New Issuance). This platform will shorten the settlement time for companies by three days.
EY projects an upswing in the Hong Kong IPO market in 2024, with total proceeds of HK$50 billion.
