PwC sees Hong Kong IPO rebound as two Chinese tea firms apply for HKEX listings

Global consultancy PwC is expecting that total funds raised across 12 months of 2024 on the Hong Kong Stock Exchange (HKEX) will rebound and reach over HK$100 billion ($12.8 billion) with over 80 companies expected to list.

IPO fundraising slowed significantly through 2023 with total fundraising on the HKEX at HK$46.3 billion, a year-on-year decrease of 56%.

Already this year, Guming Holdings, a Chinese milk tea chain store, and the Mixue Group, which has a franchise of ice cream and iced tea stores, applied for listings on the HKEX. Both companies, which are part of the multi-billion dollar bubble tea market, applied earlier this week on January 2. 

Guming has appointed Goldman Sachs and UBS as overall coordinators while Zhengzhou-based Mixue, also known as Mixue Ice Cream & Tea, has appointed Bank of America, Goldman Sachs and UBS as its coordinators.

Mixue recently opened its first store in Hong Kong and has significant operations outside of China, including in many markets in Asia. 

Optimism

After a torrid 12 months, there are several reasons for optimism, which will be a boost for new HKEX chief executive Bonnie Chan who takes up the role in May. 

“We are optimistic about Hong Kong’s stock market this year. We expect three to five specialist technology companies will list in Hong Kong through Chapter 18C in 2024. Traditional sectors, including industrial and retail, should not be overlooked and are expected to continue to dominate,” said Benson Wong, PwC Hong Kong entrepreneur group leader, said in a January 2, 2024, media release.

Wong added: “The influx of Chinese mainland companies establishing or expanding their presence in Hong Kong, coupled with the increasing demand from international funds to allocate into Rmb assets, means that there will be greater interconnection between the Hong Kong and Chinese mainland markets.”

“The further expansion of Stock Connect will help promote Hong Kong as a centre for Rmb asset risk management and solidify its position as a global offshore Rmb business hub,” Wong continued.

For more FinanceAsia commentary on the state of the market in Hong Kong see here. 

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