South-East Asian firms test Hong Kong waters amid IPO surge

Business Times

03-08-2025

[SINGAPORE] South-east Asian companies have mostly sat out Hong Kong's 2025 listing boom , but a cautious revival may be under way with four more initial public offerings (IPOs) from the region in the pipeline, according to the Hong Kong Stock Exchange (HKEX).
Johnson Chui, HKEX's head of issuer services, told The Business Times that four South-east Asian companies are preparing to list, though he did not name them.
If these plans proceed, they would mark the highest annual number of South-east Asian IPOs in Hong Kong since 2020, signalling a slow rebound after a prolonged slump.
The pandemic and unfavourable macroeconomic conditions drove a steep decline in regional interest, with just three South-east Asian IPOs recorded between 2021 and 2024, compared with more than 65 in the five years prior.
The new listings could include that of Singapore-headquartered apparel retailer Shein. In July, it filed for an IPO on HKEX after its plans to debut in New York and London were stymied by regulatory pressures .
Chui told BT that the exchange continues to seek opportunities from the south. 'HKEX is deeply committed to strengthening ties with Asean markets,' he said, noting that the bourse frequently conducts roadshows in the region.
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In the first half of 2025, three regional companies listed on HKEX: Indonesia-based Nanshan Aluminium, Singapore biotech firm Mirxes , and Thai coconut water-maker IFBH .
They accounted for 7 per cent of the bourse's 43 IPOs so far this year, as overall activity rebounded sharply.
In H1, IPOs and cross-listings on HKEX totalled 210 deals, raising US$49.2 billion – more than nine times the US$5.3 billion raised a year ago, based on data from S&P Global Market Intelligence.
The 43 IPOs in H1 2025 marked a sharp jump from the 29 in the same period in 2024, and the 27 in H1 2023.
'Most of the success we've seen in the capital markets in Hong Kong has been from Chinese companies,' said Jon Withaar, head of Asia special situations at Pictet Asset Management.
Much of HKEX's fundraising surge has stemmed from the 175 dual-listed companies that also trade on the mainland's A-shares market. For these firms, Hong Kong's deep capital markets and currency fungibility provide greater flexibility.
Mainland markets
The prospect of expanding into the Chinese market has prompted some South-east Asian companies to make the leap.
Listing on HKEX could lead to greater recognition among investors across Greater China, or the leverage of brand familiarity for fundraising. Thailand's IFBH, whose coconut water brand IF commands a significant market share in China, cited desires to grow its business in the wider region following its Hong Kong debut in June.
' Most of the success we've seen in the capital markets in Hong Kong has been from Chinese companies. '
—
Jon Withaar, head of Asia special situations at Pictet Asset Management
In addition, Hong Kong's efforts to attract listings from key sectors could draw the attention of Greater China companies.
Specialist technology firms in China have flocked to HKEX as the bourse offered pathways to lessen compliance burdens for applications within the sector.
This may be why cancer diagnostics startup Mirxes chose HKEX over the Singapore Exchange (SGX) for its IPO in May, citing better valuations and a more savvy investor pool.
This is despite the company's links with Singapore government bodies such as the Agency for Science, Technology and Research, and the Economic Development Board.
Homecoming bias
Admittedly, South-east Asia's own IPO market has been relatively quiet, with fundraising reaching a decade-long low in 2024 . Fresh listings in H1 2025 have also underperformed compared to the year before, a Deloitte report noted.
Local exchanges have remained more attractive than HKEX for new listings, with fundraising flexibility and policy incentives laying the foundations for domestic players to access funds.
'Major Asean members have their own currencies and domestic stock markets to fund business growth,' a Bloomberg Intelligence report noted in July.
'The bias remains for South-east Asian companies to list on their local exchanges in 'homecomings',' said Pictet's Withaar, pointing out that government-linked investment companies and sovereign wealth funds in countries such as Malaysia, Indonesia and Singapore often support large listings in the region.
Such government involvement is expected to persist in South-east Asia's capital markets.
'Companies increasingly favour local exchanges over international ones due to regulatory support and growing domestic investor interest,' Stephen Bates, partner and head of deal advisory at KPMG in Singapore, told BT last month.
As a result, little of Hong Kong's listing activity in the last few years has come from South-east Asia, Withaar noted. 'These are markets for Chinese and Hong Kong investors, who can understand Chinese businesses much more than (those) in Thailand, Vietnam or Malaysia.'
Cross-listings
Notably, HKEX may still find additional reach in dual-primary or secondary-listed companies which already trade on Asean exchanges. The bourse may already have signalled a strategic shift, which HKEX chief executive Bonnie Chan hinted at in a June interview: 'I am now beginning to realise that our sweet spot may not be private companies.'
'We're now more focused on companies which are actually already listed on another market, but might have outgrown their domestic market,' she added.
Since 2022, international issuers have been included in HKEX's Stock Connect programme, which allows mainland Chinese investors to trade and settle shares listed on Hong Kong boards.
Access to these investors may be why companies such as Malaysia-listed Capital A, the parent company of low-cost carrier AirAsia, is now seeking a secondary listing on the Hong Kong bourse.
' I am now beginning to realise that our sweet spot may not be private companies. We're now more focused on companies which are actually already listed on another market, but might have outgrown their domestic market. '
—
Bonnie Chan, HKEX chief executive
As part of efforts to woo more South-east Asian firms, HKEX has included several exchanges from the region in its list of recognised stock exchanges – allowing companies already listed on these boards to pursue secondary listings in Hong Kong without being subject to additional regulatory requirements.
The bourse added the Indonesia Stock Exchange to this list in 2023, and the Stock Exchange of Thailand in March this year. The list already includes SGX, but not Malaysia's or Vietnam's main stock exchanges.
Seventeen companies from South-east Asia –- including 16 from Singapore and one from Malaysia – are currently trading on both HKEX and their domestic bourses, Bloomberg data indicated.
Even so, access to additional fundraising is far from a given for South-east Asian companies. SGX-listed real estate player LHN discovered this as it voluntarily delisted from the Hong Kong bourse in July, citing compliance costs and low trading volumes.
Liquidity concerns, the company's board said, had limited its opportunities to conduct secondary equity fundraising on HKEX.
Pictet's Withaar also warned that dealmaking in Hong Kong still suffers from deep cyclicality, where listing booms come and go. 'Just 18 months ago, there were miniscule levels of activity in the Hong Kong capital markets,' he said.
'This is unlike the US, which has a very deep and liquid market. There is always a steady stream of capital markets transactions.'
When it comes to overseas listings, Wall Street exchanges Nasdaq and the New York Stock Exchange remain the gold standard for foreign companies due to better liquidity and valuations, he added.
Compared to the three South-east Asian listings on HKEX, six regional companies have already gone public on Nasdaq in 2025, all of which are headquartered in Singapore.