The outlook of China’s onshore IPOs remains uncertain for 2025 following a record-low in fundraising deals in 2024.
For the full year, Chinese mainland stock markets were expected to raise RMB 68 billion (USD 9.32 billion) through 101 IPOs, according to Deloitte China. This is a 68% drop in value from 2023 and far less than the range of between RMB 267–317 billion (USD 36.6–43.4 billion) estimated by the financial services provider in December 2023.
A series of policy-tightening measures initiated by the China Securities Regulatory Commission in March 2024 to curb the listing of unprofitable companies and to enhance existing companies’ market valuation appears to have slowed the pace of new listing applications.
In a break from earlier practices, Deloitte China has refrained from giving an estimate for 2025, saying the market will be highly dependent on policy.
On the other hand, Chinese regulators’ support for Hong Kong had given the city’s IPO market a boost, fueling new share sales by stocks already listed in mainland China that have big market capitalizations. Another major contributor came from company owners that opted to list due to pressure from early private investors who wanted exit from their investments.
Thanks to listings by the likes of Midea Group, a Shenzhen-listed Chinese home appliance maker that raised HKD 35.7 billion (USD 4.6 billion), Hong Kong was set to rank fourth in the global IPO market for 2024, according to Deloitte China. India led the pack, followed by Nasdaq and the New York Stock Exchange in the US.
KPMG estimated there will be roughly 80 listings in Hong Kong in 2025, raising between HKD 100–120 billion (USD 12.9–15.5 billion), while Deloitte China projected a larger range between HKD 130–150 billion (USD 16.8–19.3 billion).
Besides IPOs, mergers and acquisitions—another major route for investors exiting their portfolios—are expected to bounce back from a low in 2024, if the Chinese economy shows clearer signs of recovery, analysts said.
The M&A volume in Greater China, including the mainland, Hong Kong, and Taiwan, dropped 10% from a year ago to USD 297 billion from the beginning of 2024 through November 29, Dealogic data showed. For the full year, it’s expected to end at USD 325 billion, or 15% lower than 2023. The number is the lowest in 15 years, Samson Lo, co-head of M&A for Asia Pacific at UBS, told reporters in early December 2024. Lo expects a 15% rebound in volume in 2025.
Much of the appetite is likely to come from Chinese state investors with access to resources as cross-border deals face scrutiny from both regulators in Beijing and their home countries. Following a merger with Credit Suisse, UBS announced in June the sale of a 85.01% stake that the Swiss banking group owned with Founder Securities in Credit Suisse Securities (China) to Beijing state-owned Assets Management, according to Lo. The transaction amount was USD 215.4 million.
“For selling Chinese assets, the most reasonable [exit route] and the deals that could be completed are with state-owned enterprises or government-related [entities], or state-owned funds,” Lo said.
Non-domestic investors’ participation in Chinese deals remains low. “The prospects of abrupt policy shifts and capital repatriation were commonly cited as core concern,” analyst Kaidi Gao was quoted in a report published by PitchBook on December 20, 2024, citing conversations with investors.
“We expect US investor involvement—from both general partners and limited partners—in the private market in China to remain diminished, at least for the foreseeable future. US investors face an additional layer of challenges compared with their global counterparts against the backdrop of elevated US-China tensions,” Gao wrote.
This article first appeared on Nikkei Asia. It has been republished here as part of 36Kr’s ongoing partnership with Nikkei.