Hong Kong’s IPO market has staged a remarkable comeback, ranking among the world’s top five in 2024 with 69 new listings raising HK$87.6m, according to a Deloitte report. The Special Administrative Region’s (SAR) equity markets have seen parallel growth, with average daily turnovers hitting HK$242.7bn in Q1 2025, more than doubling year-over-year.
The resurgence reflects a broader pivot as mainland Chinese companies increasingly choose regional capital markets for their financing and growth plans. Steve Ng, partner and head of audit at Grant Thornton Hong Kong, says that the SAR provides access to international capital, attracting global institutional players, sovereign wealth funds and investors seeking exposure to crossborder liquidity.
‘Companies can raise capital in multiple currencies – HKD, RMB via H-shares and, in some cases, USD – through flexible financing mechanisms,’ he says.
‘Valuation multiples in Shanghai, Beijing and Shenzhen markets exceed those in Hong Kong’
Meanwhile, stricter regulatory controls have sharply reduced the number of new listings on mainland Chinese exchanges; in 2024 they fell to roughly one-third of 2023 levels, with total values dropping to 68 billion yuan: just 20% of the previous year’s figure.
Different markets
Hong Kong and mainland Chinese exchanges serve fundamentally different markets, says Ng. While mainland Chinese exchanges focus on domestic investors and operate under strict capital controls, Hong Kong provides international access and faster IPO processing. A Hong Kong listing can be completed in six to 12 months, whereas mainland Chinese A-share listings often face extended review periods and more rigid requirements.
This market structure difference directly affects valuations. Mainland Chinese investors in Shanghai, Beijing and Shenzhen consistently place higher valuations on A-shares than Hong Kong investors do for the same earnings stream, says Paul She, audit and assurance partner and head of capital at Forvis Mazars in Hong Kong. ‘Valuation multiples in Shanghai, Beijing and Shenzhen markets generally exceed those in Hong Kong, due to regulatory and market participant dynamics,’ he notes.
‘CFOs must determine whether their priority is capital efficiency or volume expansion’
Each market offers distinct advantages. ‘The A-share market can generate substantial capital, but it typically entails longer approval timelines and greater regulatory uncertainty,’ says She. In contrast, Hong Kong offers faster processing but lacks precise valuation benchmarks. ‘Corporate CFOs must determine whether their immediate priority is capital efficiency or volume expansion,’ he advises.
The markets also attract different types of investors with varying expectations. Hong Kong investors typically favour asset-light business models and growth potential, says She. ‘The institutional investor base in Hong Kong is relatively prominent, necessitating significant resource allocation toward investor relations to attract and retain high-calibre institutional stakeholders,’ he adds.
As CFOs and finance leaders weigh listing options between Hong Kong and mainland China exchanges, they face the challenge of navigating distinct regulatory frameworks, business environments and compliance requirements.
‘Finance professionals must ensure full disclosures and compliance across both Hong Kong and mainland markets,’ She advises. ‘CFOs must tailor their equity story not only to the market dynamics, but also to the expectations of target investor groups.’
Crossborder capabilities
For companies pursuing dual listings, building a specialised team with strong crossborder coordination capabilities is essential, according to Ng. They need expertise in both IFRS Standards and the Chinese Accounting Standards, as well as bilingual disclosure officers to ensure accurate and consistent filings across markets.
Ng recommends a ‘global plus local’ strategy when selecting intermediaries. ‘For auditors, it is essential to appoint a team capable of handling both Chinese Accounting Standards and IFRS Standards in parallel,’ he adds.
‘Finance teams can engage third-party support to bridge potential compliance gaps’
Teams managing dual listings – Hong Kong shares and mainland China A-shares on exchanges like the Shanghai Stock Exchange and the Shenzhen Stock Exchange – have to establish a ‘common regulatory denominator’ while navigating distinct reporting requirements, according to She.
‘Dual listing often entails that the same financial event is reported under two distinct accounting standards, requiring the team to include experts proficient in these frameworks,’ says She. ‘Finance teams can engage specialised third-party support, such as Hong Kong-based legal counsel, financial advisers and auditors, to bridge potential compliance gaps.’
In the long term, finance leaders need to create a ‘dual-compatible’ framework that satisfies structural and procedural expectations across both markets, according to Ng. ‘Key financial data has to be reconciled across both frameworks, with explanations of accounting differences disclosed in annual reports,’ he adds.
As mainland China and Hong Kong authorities work to harmonise disclosure requirements and streamline compliance processes, companies may eventually be permitted to prepare a single set of disclosures for both markets in the future, says She. ‘Notable progress has been made in areas such as the convergence of accounting standards and uniform treatment of economic events under listing rules,’ he notes.
Sustainable market access ultimately depends on developing robust in-house expertise, says She. ‘A finance team with professionals well-versed in both mainland and Hong Kong rules not only ensures smoother compliance but also strengthens the organisation’s ability to identify and select competent third-party advisers when external support is required,’ he says.
