In the early days of February, as the chill of spring lingers in the air, the activity in the capital markets is beginning to stir with optimismParticularly noticeable is the activity surrounding mainland Chinese companies setting their sights on listing on the Hong Kong Stock Exchange, a trend that has elicited excitement from law firms and financial intermediaries alike.

Just a couple of weeks after the 2025 Chinese New Year, a lawyer named Yueyang, working at a prestigious law firm, found himself hopping between four cities to meet with businesses gearing up for their listings in Hong KongAmong these businesses, two listed in the A-share market are considering a dual listing model known as “A+H,” essentially allowing them to be listed on both the domestic and Hong Kong exchanges.

As Yueyang presents successful case studies from his team to potential clients, he thoroughly analyzes the specific circumstances of each target company, the nuances of the Hong Kong market, and the regulatory landscapeHis aim is clear: to secure these clients and the prospective projects they represent.

In particular, Yueyang specializes in handling initial public offerings (IPOs) for Hong Kong from his law firm’s southwestern officeThe past two years have been tough; the IPO market for Hong Kong has been lackluster, and the pressure of potential layoffs weighed heavily on his mindYet, the recent flurry of activity brings memories of six years ago when there was a boom in mainland firms seeking Hong Kong listingsNow, with an increasing number of potential cases in hand, Yueyang speculates that 2025 could well be a banner year for the Hong Kong stock market.

A similar sentiment is reinforced by an investment banking professional at a leading brokerageDuring the first half of 2024, he expressed his anxiety over the scarcity of projects, which made him fearful of being reassigned or even laid offHowever, by the fourth quarter of 2024, new opportunities began to emerge, allowing for collaborations between his team and the Hong Kong operations without the necessity of drafting a prospectus, a task typically reserved for law firms

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With comparable bonuses to A-share IPOs, his outlook for the “A+H” projects quickly shifted to one of optimism.

According to various reports, as of early 2025, at least 21 companies that are already listed on the A-share market are pursuing IPOs in Hong KongThis cohort includes giant firms like CATL and Haitai Flavors and Fragrances, which boast valuations in the trillions and hundreds of billions respectivelyThe favorable change in market conditions, coupled with shifts in policies supporting internationalization and the increasing desires of companies to access broader capital pools, makes the Hong Kong market an enticing destination.

As these mainland companies signal intentions to float shares in Hong Kong, several entities have revealed plans to establish H-share listingsFor instance, JECHA and SANY Heavy Industry made their announcements mid-February for issuing H-shares and listing on the Hong Kong Stock ExchangeNotably, Chifeng Jilong Gold Mining became the third gold-related company to undergo the “A+H” listing process.

The reasons for these companies gravitating toward Hong Kong are multifacetedBased on Yueyang’s previous interactions, he noted that many firms initially sought listings there due to an inability to meet A-share listing requirementsHowever, since the latter half of 2024, the motivation has shiftedIncreasingly, companies are eager to widen financing avenues and further their international strategic objectives, which he identifies as the primary catalysts behind this dual listing trend.

Officials from JECHA articulated this sentiment further, citing the urgency of enhancing international operations and financing capabilities, thereby escalating overall competitive strengthSimilarly, SANY's official announcement emphasized a commitment to global expansion and improved transparency and governance conforming to international standards.

As companies proceed with these plans, they face certain challenges, notably the cost of listing and concerns about whether their stocks will be marketable

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Such hesitations were typically focused on meeting listing prerequisites; however, Yueyang points out that while the costs are daunting in terms of compliance and intermediary fees, the actual listing process itself is often less burdensome on the Hong Kong exchange compared to the domestic market.

The costs entailed in pursuing an IPO in Hong Kong primarily comprise fees from various intermediaries, application costs associated with the exchange, and maintenance fees for advisory servicesIndustry insiders reveal that the expenditures on professional services can be substantial, especially for smaller firms considering an “A+H” pathYueyang himself remarked on the stiff competition among intermediaries, with some offering historically low fees to attract major projects in hopes of securing a reputable case.

However, in the current tech-savvy environment, Yueyang finds solace in innovative solutions, employing advanced AI tools to assist in preparing his presentationsSuch technology indeed reflects the evolving landscape of consulting and service provision in the financial sector.

Looking forward, Yueyang expresses a cautious optimismWhile potential projects are on the horizon, the journey from project initiation to successful IPO remains fraught with uncertaintyThe second half of 2025 will be critically observed not just by him, but by the entire financial ecosystem eager to tap into this burgeoning wave of companies seeking opportunities in Hong Kong.

With an anticipated influx of near thirty companies looking towards Hong Kong for IPOs in 2025, the landscape is shifting continuouslyChanges in regulatory oversight and more lenient conditions offer hope, as do signs of decreasing gaps between A-share and H-share valuationsThese transformations might ultimately align to relieve lingering concerns regarding the feasibility and profitability of dual listings in Hong Kong, even amid general market skepticism.

As the market remains receptive, Yueyang and other professionals observe whether these reforms translate into practical benefits

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