Profitability Remains Strong: Four Key Characteristics Behind Winning Hong Kong IPOs

Since the start of 2025, the Hong Kong IPO market has maintained steady momentum, with new listings continuing to demonstrate strong profitability. According to Wind data, 31 companies have gone public in Hong Kong so far this year, with 9 falling below their issue prices, resulting in a break rate of 29.03%. In comparison, during the first half of 2024, 70 companies were listed, with 25 experiencing a break, reflecting a higher break rate of 35.71%. A review by Securities Times highlights four key traits commonly found among top-performing IPOs.

This year’s IPOs have prominently featured dual growth engines of “technology + consumption.” Popular sectors include trendy consumer products such as toys, tea beverages, pet care, gold jewelry, cosmetics, and medical aesthetics, alongside tech segments like artificial intelligence, new energy, robotics, and advanced manufacturing.

Of the 13 IPOs with over 10% first-day gains, Ying’en Biotech led with a 116.70% surge, showcasing investor enthusiasm for innovative pharmaceutical companies. Mixue Group, a new consumer brand, rose 43.21% on debut. Similarly, Bloks Toys, Aunt Shanghai, CATL (300750.SZ), and Jiangsu Hengrui (600276.SH) are all examples of industry leaders or companies in trending fields with strong stock performance.

Several A-share listed firms have completed secondary listings in Hong Kong this year, contributing significantly to the IPO fundraising scale. Notably, CATL (300750.SZ) raised HKD 41 billion. Among the five A-share companies that went public in Hong Kong, none broke issue price on debut. Chifeng Jilong Gold Mining (600988.SH) remained flat, Xiamen Jihong Co Ltd (002803.SZ) rose 39.06%, Junda (002865.SZ) and Jiangsu Hengrui (600276.SH) both gained over 20%, while CATL (300750.SZ) rose over 16%. All were priced at discounts to their A-share valuations, offering upside potential.

Cornerstone investors—well-known institutions that subscribe under a lock-up period—are a hallmark of Hong Kong IPOs, often indicating strong fundamentals and boosting investor confidence.
For instance, Ying’en Biotech attracted 15 cornerstone investors including BioNTech, Lilly Asia Ventures, Fullgoal Fund, E Fund, China Universal, and Suzhou Ventures. CATL (300750.SZ) secured backing from Sinopec, Hillhouse Capital, Kuwait Investment Authority, UBS, Oaktree Capital, China Pacific Insurance, Taikang Insurance, Boyu Capital, and Greenwoods Asset Management. These cornerstone investors committed a combined HKD 20.371 billion, representing 66% of the total proceeds.

Outstanding IPOs frequently see overwhelming subscription demand. In Hong Kong, brokers often release real-time subscription data, with higher multiples indicating greater investor interest.
On February 21, Mixue Group launched its IPO and quickly set new records. By February 24, subscriptions surpassed HKD 1 trillion; by February 25, they exceeded the 2021 record of HKD 1.26 trillion set by Kuaishou; and by the close on February 26, total demand reached HKD 1.83 trillion. Mixue’s retail tranche saw over 5,000 times oversubscription, while institutional demand reached 35.23 times. Among the 13 top-performing IPOs, most had subscription multiples exceeding 100x, underscoring the importance of broker data and investor enthusiasm.