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Hong Kong Investors Strike Gold: IPO Boom Yields Over 30% Returns

Few asset classes globally match Hong Kong IPOs this year, as institutional and individual investors rush in hoping for eye-popping gains

A blistering recovery in Hong Kong’s
initial public offering (IPO)
market this year has delivered a bonanza for investors, with returns above 30 per cent bucking a sluggish economy and languid property market.

Holding new shares from the 34 companies that have pulled off offerings in 2025 would generate an average return of 34 per cent, according to Bloomberg data. Even selling the stocks upon their debuts would have fetched a 10 per cent gain, the data showed.

The eye-popping returns have coaxed institutional investors back to
Asia’s third-largest stock market
after years of retreat. Local individual investors have also shifted from the moribund property market – plagued by high borrowing costs and a supply glut – to the IPO market, where they are taking advantage of financial leverage to maximise their chances of winning share lotteries.

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Mark Yue, a 36-year-old fintech worker, is one of thousands caught up in the frenzy. He is subscribing to popular, high-capitalisation IPOs, usually funded by margin financing equivalent to 10 times the principal. Since February, he has won shares in six out of the seven IPOs he took part in, including
Contemporary Amperex Technology (CATL)
and
Mixue Group
.

“The risk isn’t too high if you pick up popular names with margin financing,” said Yue, who sells the shares on the first day of trading in anticipation of an average 10 per cent return.

Few asset classes globally can match Hong Kong IPOs this year. Gold has jumped 28 per cent on a global flight to haven assets, while the S&P 500 has risen less than 2 per cent after recovering from President Donald Trump’s “Liberation Day” sell-offs. The
Hang Seng Index
has advanced 18 per cent, but most of the gains came early in the year after
DeepSeek
‘s abrupt ascent, and momentum has slowed recently.

Of the city’s 34 IPOs this year, 22 have traded above their offer prices, according to Bloomberg data. The biggest gainer is Soft International Group, a maker of baby and feminine-care products that has surged 216 per cent since its March 27 trading debut. Duality Biotherapeutics and Chinese drinks and ice cream chain Mixue Group had the second- and third-biggest gains, jumping by 168 and 163 per cent, respectively.

Hong Kong’s IPO market had been in the doldrums until the start of the year, when a turnaround in sentiment bolstered demand and the city’s exchange operator fast-tracked listings of large, high-quality Chinese companies that already traded on mainland bourses. These included CATL, the world’s biggest maker of lithium-ion batteries for electric vehicles,
Jiangsu Hengrui Pharmaceuticals
, China’s biggest drug maker by market value, and condiment maker
Foshan Haitian Flavouring and Food
.

Unlike the last IPO boom in 2018 and 2019, when technology companies dominated, this surge features established companies in traditional sectors and new-consumer names buttressed by
Generation Z spending
. Besides Mixue, the latter category includes cosmetics maker Maogeping, toymaker Bloks Group and jeweller Laopu Gold. The more than sixfold surge in
Pop Mart International Group
since its listing in 2020 has created a halo effect for such consumer-focused companies.

Still, hitting the IPO jackpot is not easy for retail investors.
Bloks
, the most popular IPO this year, drew orders for almost 6,000 times the available shares, implying a less than 0.02 per cent success rate. The oversubscription ratio for Mixue was more than 5,000 times, while that for Haitian Flavoring was above 900 times.

Janet Lin, a 30-year-old media worker, has had no luck winning shares in IPOs including CATL, Haitian and Hengrui.

“It has drawn my attention when I see more mainland firms coming to Hong Kong [for listings],” she said. “My strategy is to apply for several IPOs with smaller amounts to spread the risk.”

Despite frustration, Lin said she did not plan to stop trying.

Some 34 companies have raised a combined HK$99.8 billion (US$12.7 billion) from Hong Kong’s stock market this year, according to Bloomberg data. That made the city the
world’s biggest IPO venue in 2025
, according to the London Stock Exchange Group.

The momentum is set to extend throughout the year.
Bonnie Chan Yiting
, CEO of bourse operator
Hong Kong Exchanges and Clearing
, said that about 160 companies were in the IPO pipeline, with more than 20 of those aiming to raise at least US$1 billion.

Shenwan Hongyuan Group, a Shanghai-based brokerage, said that another 29 mainland-listed companies were lined up for Hong Kong listings this year.

That is good news for individual Hong Kong investors who hope for prolonged euphoria in the primary market.

“The boom on Hong Kong’s IPOs can definitely carry on, and retail investors will benefit a lot from that,” said Dai Ming, a fund manager at Huichen Asset Management in Shanghai. “But how long the boom can last also rests on the performance of the secondary market.”

In periods of heightened optimism, IPOs can draw in more capital and lift the broader market, said Kevin Liu Gang, managing director and chief offshore China and overseas strategist at CICC, adding that inflows from mainland China had already reached HK$700 billion this year, compared with HK$800 billion in all of 2024.

“Historically, about half of all IPOs deliver positive returns, depending on the time frame,” he said. “So while persistent outperformance is rare over the long run, periodic windows of strong returns are certainly possible.”