The Hong Kong stock market officially closed in the first half of 2022. The Hong Kong stock market fell into a downturn in the first half of the year due to the intensification of international geopolitical conflicts, substantial interest rate hikes by the Federal Reserve, soaring global inflation and a rebound in the domestic epidemic. According to wind data, the Hang Seng Index retreated by 25.8% in the past six months, the lowest since the epidemic. At the same time, the Hong Kong IPO market has been affected, the number of listings and the amount of capital raised have been greatly reduced.

However, since July this year, the Hong Kong IPO market has rebounded significantly. As of July 15, 15 new shares have been listed, including those with a subscription ratio of more than 40 times for public offerings.$Xuanwu Cloud (02392.HK) $和$minimally invasive brain Science (02172.HK) $And set a record for the largest amount of capital raised this year-- HK $13.46 billion.Tianqi Lithium Industry (09696.HK) $. In the second half of the year, as a number of hot companies sprint for the listing of Hong Kong stocks, the Hong Kong stock IPO market is expected to recover.

I. Overview of Hong Kong Stock IPO Market

According to Futu data, as of July 8, 2022, there are 32 companies listed on the Hong Kong IPO market, of which 25 companies are listed in the initial public offering, 2 are listed in Hong Kong SPAC, and 5 are listed without issuing new shares by introduction.

The 25 IPO companies raised a total of about 19 billion yuan, a decrease of about 51 per cent from 51 in the same period last year and a sharp drop of 92 per cent from about HK $243.1 billion in the same period last year. In terms of industry, biotechnology and medical related industries were still relatively popular in the first half of the year, with a total of seven listed, while e-commerce, Internet services and property management services each had four listed, tied for the second most popular industry.

From the point of view of subscription and the first day, the average subscription ratio of IPO shares in the first half of the year reached 7.3 times, and the average success rate was 45.90%. Eight new shares rose on the first day, and the probability of rising on the first day was 32%.

II. Diversification of IPO forms in the first half of the year

Hong Kong stock SPAC

Thanks to policy and regulatory support, the Hong Kong listing framework has been continuously improved. Since the SPAC listing system launched by the HKEx this year, 11 SPAC companies have submitted their forms on the HKEx. So far, two companies have been successfully listed in Hong Kong, namely$AQUILA ACQ-Z (07836.HK) $及$VISION DEAL (07827.HK) $. The SPAC mechanism provides more comprehensive financing options for the Hong Kong market, thereby attracting high-growth and innovative companies. It is expected that more companies will choose to submit listing applications through SPAC in the second half of the year.

Introduction to listing

Since March 10 this year$NIO Inc.-SW (09866.HK) $Since the introduction of listing on the Hong Kong Stock Exchange, four more companies have been listed in the form of introduction, including$KE Holdings Inc.-W (02423.HK) $、Conch Environmental Protection (00587.HK) $、Huaxin cement (06655.HK) $、和$OneConnect Financial Technology (06638.HK) $。

Introduction to listing is a way for issued securities to apply for listing, and it is not necessary to issue new shares at the time of listing, because there are already a considerable number of such securities applied for listing and are held by the public. To a certain extent, financing will no longer be involved in the short term.

Introduction to listing can separate corporate financing from stock listing in time, giving enterprises more flexibility. It is expected that more enterprises will come to Hong Kong through introductions in the second half of the year to boost the Hong Kong stock IPO market.

Dual listing

Since the first half of this year$Zhihu Inc.-W (02390.HK) $、$MINISO Group (09896.HK) $、$KE Holdings Inc.-W (02423.HK) $、$Tuya Inc.-W (02391.HK) $、$Zai Lab Limited-B (09688.HK) $、$Bilibili Inc.-SW (09626.HK) $Choose a dual major listing in Hong Kong. Among them, Zai Lab Limited and Bilibili Inc. are dual major listings for secondary listing in Hong Kong, and KE Holdings Inc. for introduction + dual listing, these three do not involve new share issues.

Dual listing means that both capital markets are the first place to be listed. For example, after dual listing in Hong Kong, Tuya Inc. has become a company mainly listed on the main board of the Hong Kong Stock Exchange and the New York Stock Exchange. the company's common shares and American depositary shares will continue to be traded on the global markets of the Hong Kong Stock Exchange and the New York Stock Exchange respectively. Shares of the same type of shares listed in both places can also be circulated across the market.

Write at the end

According to public information released by the Hong Kong Stock Exchange, 163 companies have submitted their forms to the Hong Kong Stock Exchange. these include Weilong delicious, China's largest online audio platform, the Himalaya, the leading medical and beauty leader, Emmy Vaccine, the "duty-free leader", and Baiguo Orchard, the largest fruit chain in China.

With the improvement of the epidemic in the second half of the year, the return of Chinese stocks and the listing of Hong Kong stocks by a number of leading mainland companies, the Hong Kong stock IPO market is expected to recover and become active again.