HONG KONG, Jan 5 (Reuters Breakingviews) – IPO fever has caught on in Hong Kong in a big way. On Friday, shares in Shanghai Biren Technology (6082.HK), opens new tab zoomed up 76% after the Chinese artificial intelligence chip designer raised more than $700 million in its initial public offering. That came three days after market debuts for six different companies, which raised $900 million in between them. It caps a strong year for Hong Kong Exchanges and Clearing, with AI leading the charge. But a host of potential spoilers may make that hard to sustain.
In 2025, Hong Kong-listed IPOs hauled in $37 billion, supported by an average first-day rise of about 37%, rising to 42% after a full month of trading, per Dealogic. That momentum looks set to continue for now, at least. Indeed, IPOs for start-ups Zhipu and MiniMax are due later this week.
So far, so good. But investors’ big bets are actually targeting the country’s deep-pocketed technology heavyweights: last year, shares in Alibaba jumped 75% while Tencent’s rose 44%, largely due to their AI initiatives.
Line chart of Hang Seng Tech Index, rebased to 0 as of December 31, 2024
Moreover, upstart players are just as exposed to an incoming regulatory wave as established outfits, which may be better equipped to handle it. On December 27, China’s cybersecurity regulator issued draft regulations for overseeing public-facing AI services that simulate human personalities. That means local ChatGPT-like bots could be held liable for user addiction, endangerment of national security and spreading rumours, among other things. The risk from such oversight may be among the reasons why China-based AI outfit Manus upped sticks to Singapore, where it became fair game for acquisition by Mark Zuckerberg’s Meta.
Then there’s geopolitics. Donald Trump may have lifted a ban on sales of Nvidia’s (NVDA.O), opens new tab H200 AI processors to Chinese companies, but there is no guarantee the U.S. president won’t reverse that if it gives him leverage in trade negotiations with the People’s Republic. And Beijing remains keen to wean its domestic tech groups off their reliance on foreign semiconductors; local chip champ Huawei has already laid out a three-year roadmap to challenge Nvidia’s stranglehold on processors used for AI training.
Such factors could soon put the squeeze on a trade that just delivered Hong Kong’s strongest year of listings since 2021. All the more reason to get deals out the door as quickly as possible.
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Editing by Antony Currie; Production by Aditya Srivastav
Breakingviews Reuters Breakingviews is the world’s leading source of agenda-setting financial insight. As the Reuters brand for financial commentary, we dissect the big business and economic stories as they break around the world every day. A global team of about 30 correspondents in New York, London, Hong Kong and other major cities provides expert analysis in real time.
Hudson Lockett is the Asia Columnist for Reuters Breakingviews in Hong Kong. Before joining Reuters in 2024, Hudson spent seven years at the Financial Times, most recently serving as the paper’s Asia capital markets correspondent. Prior to this he was editor of China Economic Review in Shanghai. Hudson has degrees in Journalism and Japanese from The University of Texas. He speaks Chinese.
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