Chinese-funded brokerages continue to increase their investment in Hong Kong IPO business, with "Three Central and One China" capturing 40% of the market share

Ask AI · How do Chinese-funded securities firms achieve dominance in the Hong Kong stock IPO market?

As the first quarter concludes, the quarterly report card for the Hong Kong stock IPO market is revealed. In the first three months of this year, 40 companies listed on the Hong Kong Stock Exchange, raising a total of HKD 109.93B, all significantly higher than the previous year. The Hong Kong Stock Exchange remains busy; just a few days ago, four companies including Desai Biological and Jishi Visual simultaneously listed in Hong Kong, with some projects exclusively sponsored by Chinese-funded securities firms.

How much performance growth does the hot Hong Kong stock market bring to securities firms? With the release of annual reports, this question has a quantitative answer. Business income from the Hong Kong market belongs to securities firms’ overseas business income, included in total investment banking revenue. According to Wind data, by 2025, leading securities firms such as “Three Central, One Chinese” (三中一华), Guotai Haitong, and others will all see increased investment banking revenue. Additionally, disclosures show that many leading securities firms experienced growth in both the number of Hong Kong IPO projects and project financing scale last year.

Moreover, Chinese investment banks frequently participate in large projects. Among the top ten Hong Kong IPO fundraising projects in 2025, the presence of “Three Central, One Chinese” firms appears repeatedly.

Some senior compliance officers have sensed market changes. “(The) market structure has changed; Chinese institutions have done a lot of work on some flagship projects. Chinese firms are no longer just assisting foreign banks but are gradually reaching parity, even taking the lead in some projects,” said Li Ran, head of investment banking at a leading securities firm.

The reporter also learned that to strengthen Hong Kong operations, large securities firms have assigned investment banking leaders to Hong Kong. “The head of investment banking is in Beijing or Shanghai, and the second-in-command is in Hong Kong. This shows the company is pouring many resources into this (Hong Kong) market,” said an internal source at a securities firm.

Leading Securities Firms’ Investment Banking Revenue Growth

Currently, apart from Guosen Securities, all leading securities firms have disclosed their 2025 annual reports, and all achieved growth in investment banking revenue last year.

Investment banking revenue for securities firms consists of domestic and overseas income, with Hong Kong IPO income classified as overseas business income. Based on available data, by 2025, leading firms such as “Three Central, One Chinese,” Guotai Haitong, and others will see their investment banking revenues grow, with some companies experiencing over 70% increase.

According to annual reports, CITIC Securities’ investment banking revenue last year was RMB 6.06B, up 50.12%, ranking first in the industry. Following are Guotai Haitong, China International Capital Corporation (CICC), and CITIC Construction Investment, with revenues of RMB 4.75B, RMB 4.6B, and RMB 3.13B respectively, with increases of 60.21%, 77.95%, and 25.76%.

Several other securities firms also saw increased investment banking revenues last year, including China Merchants Securities, GF Securities, and China Galaxy Securities.

In terms of net commission income from investment banking, the advantages of top firms are also very clear. In 2025, the top three are CITIC Securities, CICC, and Guotai Haitong, with RMB 6.34B, RMB 5.03B, and RMB 4.66B respectively, all achieving positive year-over-year growth. Meanwhile, CITIC Construction Investment and Huatai Securities each exceeded RMB 3 billion in net commission income from investment banking last year.

From the volume of business in the Hong Kong market, 2025 is a “harvest year” for leading securities firms.

According to annual reports, last year CITIC Securities handled 51 Hong Kong IPO projects and 32 Hong Kong refinancing projects. Its underwriting scale for equity financing in Hong Kong was USD 7.55B, including the second-largest Hong Kong IPO, Zijin Gold International; the third-largest IPO, Sany Heavy Industry; and the largest Hong Kong refinancing, BYD placement.

CICC also handled a large volume of Hong Kong IPO projects last year, acting as lead underwriter for 41 IPOs, including CATL, Seres, Sanhua Intelligent Controls, and Huitian Flavor & Food, with a total underwriting scale of USD 7.9 billion. Compared to 2024, both the number of projects and underwriting scale increased by over 100%.

Chinese-funded Securities Firms Gradually Take the Lead

From the market landscape, Chinese-funded securities firms are gradually dominating the Hong Kong IPO market.

Public data shows that in 2025, the Hong Kong market rebounded strongly, with 119 new listings successfully completed, raising approximately HKD 285.8 billion, with both indicators rising sharply.

In this Hong Kong IPO feast, intermediary institutions work closely to support listed companies, with Chinese-funded securities firms playing a key role, becoming the “pioneers” in Hong Kong IPO underwriting and sponsorship.

In 2025, the top ten Hong Kong IPO projects by fundraising include CATL, Zijin Gold International, Sany Heavy Industry, Seres, and Hengrui Medicine.

Among them, CATL raised HKD 41 billion, making it the largest Hong Kong IPO in 2025. The joint sponsors for this project include CICC Hong Kong, CITIC Construction Investment, Morgan Stanley, Merrill Lynch, and others.

Other large projects also frequently feature Chinese investment banks. For example, Zijin Gold International was jointly sponsored by CITIC Securities and Morgan Stanley. Some large Hong Kong IPOs are exclusively sponsored by Chinese investment banks, such as Sany Heavy Industry, which is supported by CITIC Securities.

For IPO projects with fundraising exceeding HKD 5 billion, Chinese investment banks have secured multiple exclusive sponsorships. For instance, Luxshare Precision and Cambridge Technology’s Hong Kong IPOs are exclusively sponsored by CITIC Securities and Guotai Junan International, respectively.

In terms of underwriting scale, “Chinese-character” securities firms also perform very well. According to CICC disclosures, in 2025, the company acted as lead underwriter for 41 Hong Kong IPO projects, with a total underwriting scale of USD 7.9 billion, ranking first in the market; as global coordinator, it led 52 projects with a scale of USD 5.67B, also ranking first.

In terms of market share, Chinese-funded securities firms are gradually becoming the main force in the Hong Kong IPO market. According to Wind data, based on listing date, in 2025, the top sponsors for Hong Kong IPOs were CICC Hong Kong, CITIC Securities Hong Kong, Huatai Financial, and CITIC Lyon, with 42, 33, 22, and 20 projects respectively, accounting for 15.97%, 12.55%, 8.37%, and 7.6% of the market share. Additionally, CITIC Construction Investment sponsored 7 projects, with a market share of 2.66%.

Preliminary estimates based on the above data show that “Three Central, One Chinese” firms together hold over 40% of the Hong Kong IPO sponsorship market share.

Leading Securities Firms Call for “Strengthening Hong Kong Business”

With the strong recovery of the Hong Kong market, Chinese-funded securities firms are increasingly shifting personnel and resources toward this market.

“2024 and 2025, many securities firms see the prosperity and changes in Hong Kong market, and firmly believe that the overseas market, especially Hong Kong, will become the main arena for investment banking,” said investment banking expert Li Ran.

At recent securities performance meetings, some leading institutions explicitly stated their intention to vigorously develop Hong Kong market business. Regarding expanding into international markets, Zhongxin Securities General Manager Zou Yingguang said the company will continue to strengthen Hong Kong operations, establish a Asia-Pacific hub, expand its global network, and enrich its overseas market offerings.

Meanwhile, CICC, CITIC Construction Investment, and others have also outlined their strategies for developing Hong Kong business in their annual reports.

CITIC Construction Investment states that in terms of international business, CITIC Construction International will continue expanding its Hong Kong market activities, aiming for diversified development in areas such as Chinese concept stock listings, Hong Kong privatizations, and cross-border acquisitions; CICC says it will actively seize market opportunities like A-share companies listing in Hong Kong, leveraging its cross-border platform and investor coverage to strengthen influence and competitiveness in major and leading projects.

However, according to compliance officers, if Chinese-funded securities firms want to deepen their roots in Hong Kong, they still need to address issues such as personnel deployment and business qualifications. Mainland compliance officers need to go through licensing procedures to practice in Hong Kong.

“A mainland sponsor wanting to get licensed in Hong Kong faces about two years of inability to sign off, which is a long time—two to three years. That’s enough for a bull market cycle to pass. From this perspective, Chinese firms are very willing to send mainland staff to Hong Kong for investment banking, but there are still some issues to resolve in practice,” said an investment banker.

“Given that international giants have been operating in Hong Kong for many years, it’s not easy for Chinese securities firms to win business and get clients to place orders,” he added further.

(The name Li Ran in this article is a pseudonym.)

(This article is from Yicai)