Guotai Junan: Improved market liquidity drives a significant rebound in Hong Kong stock IPOs and refinancing

According to the Zhitong Finance APP, Guotai Junan released a research report stating that since the second half of 2024, with the U.S. interest rate cuts and the continuous strengthening of domestic stable growth policies, the trading activity of Hong Kong stocks has significantly increased, and the improvement in market liquidity has driven a substantial recovery in Hong Kong stock IPOs and refinancing. In February, equity financing in Hong Kong stocks remained active, with an IPO scale of 7.8 billion yuan since the beginning of the year, a year-on-year increase of 258%; the refinancing scale since the beginning of the year was 24.9 billion yuan, a year-on-year increase of 27%. It is expected that the overall pace of equity financing will continue to tighten, and leading securities firms with advantages in corporate client resources and professional service capabilities are likely to maintain their leading position in the evolution of the investment banking business ecosystem, recommending CITIC Securities (600030.SH), HTSC (601688.SH), and CICC (03908).

Guotai Junan's main points are as follows:

In February, the cumulative growth rates of domestic equity financing and debt financing both turned positive year-on-year.

1) IPO: According to the issuance date statistics, in February, there were 5 new A-share listings in a single month, a decrease of 3 from the previous month, with a total fundraising amount of 3.9 billion yuan, a decrease of 19% from the previous month; 2) Refinancing: According to the issuance date statistics, the refinancing scale in February was 29.4 billion yuan, an increase of 44% from the previous month. The total equity financing scale in the first two months was 58.5 billion yuan, a year-on-year increase of 40%, with cumulative growth turning positive; 3) Mergers and Acquisitions: Driven by continuous policy strengthening and industry demand, the demand for mergers and acquisitions remains strong, with a total of 102 major restructuring events disclosed by listed companies since the second half of 2024, including 8 in February; 4) Bond Issuance: The underwriting scale's year-on-year growth turned positive, with the issuance scale of core bonds (corporate bonds + enterprise bonds + convertible bonds) in February reaching 216 billion yuan, with a cumulative year-on-year growth of +3% since the beginning of the year.

The improvement in market liquidity, coupled with an increase in mainland enterprises financing in Hong Kong, keeps equity financing in Hong Kong stocks active.

Since the second half of 2024, with the U.S. interest rate cuts and the continuous strengthening of domestic stable growth policies, the trading activity of Hong Kong stocks has significantly increased, and the improvement in market liquidity has driven a substantial recovery in Hong Kong stock IPOs and refinancing. In February, equity financing in Hong Kong stocks remained active, with an IPO scale of 7.8 billion yuan since the beginning of the year, a year-on-year increase of 258%; the refinancing scale since the beginning of the year was 24.9 billion yuan, a year-on-year increase of 27%. The increase in mainland enterprises listing and financing in Hong Kong is expected to further enhance the scale of equity financing in Hong Kong stocks with projects such as the IPO of Mixue Group and the placement of BYD shares expected in March.

Supporting technological innovation and the development of new productive forces remains the main line, and the issuance pace is expected to improve.

Since the beginning of 2025, regulatory policies such as the modification of certain provisions of the "Securities Issuance and Underwriting Management Measures" have been gradually introduced, and the "1+N" policy system continues to improve. The China Securities Regulatory Commission has proposed to continue to strengthen support for technological innovation and the development of new productive forces, support high-quality unprofitable technology companies in issuing and listing, and steadily restore the applicability of the fifth set of standards for the Sci-Tech Innovation Board, better promoting the integration of technological innovation and industrial innovation. Marginally, on March 11, Aotu Technology's Sci-Tech Innovation Board IPO was accepted, becoming the first IPO project accepted by regulators since the beginning of the year, and the issuance pace is expected to improve in the future Risk Warning

Significant fluctuations in the capital market; the pace of IPOs continues to tighten