In Depth: China Gears Up for Overseas IPO Bonanza
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China’s back! The nascent overseas IPO revival that began in late 2024 is set to gather pace this year as companies including CATL, the world’s biggest maker of electric-vehicle batteries, and Chery Automobile Co. Ltd., one of China’s largest carmakers, queue up to raise money offshore.
Mixue Group, a leading Chinese bubble tea and drinks chain, saw its shares surge 43% to HK$290 ($37.30) on their debut in Hong Kong on March 3, underscoring the improvement in investor sentiment toward Chinese mainland companies. Later that week, tea-drinks maker Chagee Holdings Ltd. obtained a filing confirmation notice from China’s securities regulator, giving it the go-ahead to pursue an IPO in the U.S.
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- China is seeing a revival of overseas IPOs, with companies like CATL and Chery Automobile planning offshore listings amid a favorable regulatory environment.
- Hong Kong is emerging as a preferred market compared to the U.S. due to political stability, proximity to the mainland, and streamlined listing processes.
- Tech firms are increasingly targeting Hong Kong for IPOs, with notable growth in applications since the regulatory environment became strict on the mainland.
The revival of overseas Initial Public Offerings (IPOs) by Chinese companies continues to strengthen in 2025, prominently featuring major players such as CATL, the world's largest electric vehicle battery manufacturer, and Chery Automobile. These companies aim to generate funding from offshore markets, aligning with the broader trend of improving market sentiment toward Chinese businesses.[para. 1]
Hong Kong has emerged as a favorable destination for listings over the U.S., driven by its political stability and proximity to mainland China. The China Securities Regulatory Commission (CSRC) approved more filing confirmations in early 2025 than in the latter half of 2024, indicating regulatory support for overseas listings. As a result, many IPO candidates favor Hong Kong over mainland markets due to the lengthy and stringent review procedures in mainland China, which extend over several years for some.[para. 2][para. 5]
The U.S., traditionally a preferred listing venue due to its liquidity and high valuations, is seeing a dip in popularity. The re-election of Trump, geopolitical tensions, and complications around the variable interest entity structure have increased the risks of listing there. Only 22% of the 154 overseas filing reviews by CSRC in early 2025 were aimed at U.S. markets, highlighting this trend away from American exchanges.[para. 7]
Regulatory and market conditions significantly influence the choice of IPO venues, with companies inclining towards the Hong Kong or STAR Market while steering away from the U.S. due to increasing compliance and policy risks. Chinese companies displayed a marked preference for overseas listings in 2024, with overseas IPOs totaling 97 compared to 100 on the mainland, partly due to tighter mainland IPO regulations and prolonged review processes.[para. 9][para. 13]
Taking advantage of Hong Kong's perceived advantages, some companies initially intending to list in mainland China are redirecting their efforts to Hong Kong. These include Ab&B Bio-Tech, which shifted to Hong Kong following stricter mainland IPO reviews, and the company benefitted from supportive regulatory changes such as Chapter 18C of Hong Kong's listing rules.[para. 15][para. 21]
Efforts to boost Hong Kong's attractiveness as a listing venue included cooperative measures between CSRC, HKEX, and other regulatory bodies, such as reducing application processing times and introducing a fast-track option for qualified companies. By March 2025, notable companies from various sectors, such as CATL and Jiangsu Hengrui Pharmaceuticals, sought to list in Hong Kong, signaling confidence in the market.[para. 27][para. 31]
The Chinese tech sector has witnessed renewed interest, exemplified by the success of AI company DeepSeek and its AI-powered chatbot, DeepSeek-R1, which spurred significant growth in the Hang Seng Tech Index. Several tech firms, including Manycore Tech and MetaLight, have filed IPO documents in Hong Kong in 2025, reflecting investor interest in innovative technologies driving market momentum.[para. 34][para. 38]
Continued stringent mainland IPO conditions led other entities like Laoxiangji and Mao Geping Cosmetics to switch their listing preferences to Hong Kong after facing prolonged approval hardships in China. Regulatory trends suggest an ongoing preference for showcase-quality companies on mainland exchanges to bolster investor confidence and market quality, following policy shifts in 2024 meant to rejuvenate the Chinese stock market.[para. 42][para. 46]
- August 2023：
- Regulators started slowing the pace of IPOs and making it tougher for companies to list as part of measures to reverse the decline in the stock market.
- September 2024：
- The government released a slew of stimulus policies, including measures to reinvigorate the stock market. The CSI 300 Index jumped around 20%.
- October 2024：
- The Hong Kong Securities and Futures Commission and the HKEX announced they would accelerate the approval process for new listing applications so that the entire procedure could be completed within six months.
- December 10, 2024：
- Mao Geping Cosmetics Co. Ltd. listed on the HKEX after submitting an IPO prospectus in April 2024.
- Late 2024：
- Nascent overseas IPO revival began.
- By the end of 2024：
- 225 filing confirmation notices were issued by the CSRC, with only 77 for a U.S. listing.
- January 14, 2025：
- MetaLight submitted its stock exchange filing.
- January 23, 2025：
- Ab&B Bio-Tech submitted its application for a listing on Hong Kong's main board.
- February 11, 2025：
- CATL filed its listing application for an IPO in Hong Kong.
- February 14, 2025：
- Manycore Tech submitted its stock exchange filing.
- March 3, 2025：
- Mixue Group saw its shares surge 43% on their debut in Hong Kong.
- March 3, 2025：
- Citic Securities released a report noting the IPO tightening cycle has limited the stock market's ability to serve the economy.
- Mid-March 2025：
- Eight companies seeking to list in the U.S. had received filing confirmation notices.
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