After $34 Billion Year, Hong Kong IPOs Continue Pace With Tech Listings

Hong Kong is set to continue its rapid pace of stock listings thanks to a series of market debuts by Chinese technology companies.

The "Google of China," Baidu, is looking to raise as much as $2 billion with a Hong Kong listing for its AI chip subsidiary.

Thursday alone sees three such listings, with initial public offerings (IPOs) for:

Knowledge Atlas Technology (HK:2513), an OpenAI-style company that develops artificial intelligence (AI) models and calls itself Z.ai in brief.

Iluvatar CoreX (HK:9903), which develops chips and graphics processing units to power AI training and inference.

Shenzhen Edge Medical (HK:2675), which makes surgical robots.

Pace Set to Continue

The flurry of listings is likely to continue, with Chinese regulators keen to fast-track tech listings, particularly in the chip sector, to help China break its dependency on U.S. semiconductors, and improve its self-reliance in the tech sector.

The three IPOs shook off a generally down day for Asian equities to finish with strong showings. Hong Kong’s benchmark, the Hang Seng Index, fell 1.2%, with the Hang Seng Tech Index down a similar 1.1%.

Knowledge Atlas raised HK$4.35 billion ($558 million), and ended the day up 13.2% from its listing price of HK$116.20.

Iluvatar CoreX opened supremely strongly, up 31.5%, but immediately lost steam and ended on an 8.4% gain from its list price of HK$144.60. It raised HK$3.7 billion ($475 million).

Edge Medical was the smallest listing of the trio, raising HK$1.2 billion ($154 million), but ended on the strongest gain, up 30.9% from its list price of HK$43.24.

First IPO of the Year

Another AI chip designer, Shanghai Biren Technology (HK:6082), listed on Friday, the first IPO of the year in Hong Kong. It raised HK$5.6 billion ($717 million) and saw its shares almost double on debut from their IPO price of HK$19.60. They ended Thursday up 71.5% from the IPO price.

Biren Tech makes chips and operates graphics processing units to drive intelligent computing. The company is attempting to catch up with the kind of high-performance chips designed by Nvidia (NVDA) , grabbing headlines in 2022 when it said its BR100 chip could match the performance of Nvidia’s H100 AI processor.

Seeking Stickier Money

Besides IPOs, mainland companies that are already listed in tech-focused Shenzhen or the broader market in Shanghai may also choose to sell shares with secondary listings in Hong Kong. That helps them attract an international investor base, and “stickier” money, since the mainland “A share” markets are off-limits to all but the very biggest of institutional investors. Retail punters also have an outsized influence on A share prices, trading on momentum and leaping in and out of stocks that move quickly.

Chinese chip designer Montage Technology (SH:688008) is looking at a Hong Kong secondary that could raise as much as $1 billion. The Shanghai-listed, Shanghai-based company hasn’t finalized the details or timetable but the listing will likely occur on January 26, Reuters reported on Thursday.

Montage Technology Passes Listing Hurdle

Montage Technology makes integrated circuits for use in cloud computing and AI. So it’s an attractive prospect for international investors looking for a “China AI play.”

The company filed on Monday indicating it has passed its hearing with the Hong Kong Stock Exchange. It last July first submitted heavily redacted information indicating it’s working toward a Hong Kong market debut.

This would actually be a third market debut for Montage Tech. It listed on Nasdaq in September 2013 but was taken private a year later. It then went public again on Shanghai’s Nasdaq-like STAR Market in 2019.

Baidu and Huawei Spinoffs

There are other listings in the works for several AI-linked China plays.

There’s a plan from the “Google of China,” Baidu (BIDU) (HK:9888), to list its AI chip subsidiary Kunlunxin in Hong Kong. The timing on that isn’t certain but could come as early as Q1 2026. Bloomberg reports that Kunlunxin has hired investment banks to prep a $2 billion listing.

Server provider xFusion, a spinoff from unlisted Huawei Technologies, has filed with the China Securities Regulatory Commission to debut shares by May, hiring Citic Securities to prepare a mainland IPO.

Chinese chipmaker ChangXin Memory Technologies (CXMT) is readying for a listing in Shanghai. It is China’s largest maker of DRAM chips and could seek to raise C¥30 billion ($4.3 billion).

Late last year we saw huge debuts for Moore Threads Technology (SH:688795), up 425.5% on listing on Shanghai’s STAR Market on December 5. The “Nvidia of China” has held much of those gains, still trading around six times its IPO price of C¥114.28.

Likewise, Chinese AI chipmaker MetaX Integrated Circuits (SH:688802) leapt 692.9% by the end of its first day of trade on December 17. The company, formed by former executives from Advanced Micro Devices (AMD) , is also still trading around six times its IPO price of C¥104.66.

Hong Kong Leads World in IPO Funds Raised

Hong Kong led the world in IPO activity last year, with $34.9 billion raised, a return to form for a stock market that had fallen on hard times.

The largest listing in Hong Kong last year was a $4.6 billion secondary for Contemporary Amperex Technology or CATL (HK:3750), the world’s largest maker of batteries for electric vehicles. It ran up nicely through October but, like most China tech stocks, has struggled for direction since then, due to concerns about China’s overall economic growth and the lack of substantive stimulus from Beijing.

The largest IPO was for Zijin Gold International (HK:2259), which raised $3.3 billion in September. Riding the bull run in bullion, the international arm of Shenzhen-listed Zijin Mining (SZ:601899), debuted with intense interest but has struggled for direction after debut. It’s up 104.6% from its list price of HK$71.59, but “just” ahead 21.5% from its first-day close.

All signs indicate that Hong Kong will sustain last year’s pace, if not surpass it. Since listings such as CATL have opted for a “Reg S” offering in Hong Kong, which requires “no directed selling efforts” within the United States, U.S. investors can seek exposure through Hong Kong-focused exchange traded funds such as the KraneShares CSI China Internet ETF (KWEB) , the KraneShares Hang Seng Tech Index ETF (KTEC) or the VanEck ChiNext ETF (CNXT).

At the time of publication, McMillan was long NVDA and KTEC.