Clear profit-making effect, with multiple streams of funds rushing in to accumulate core holdings for an investment.

Shanghai Securities News reporter Xu Xiaoxiao

Zhipu has surged more than 10-fold, DeepSeek Intelligent has risen over 6-fold, and MegaDevice’s H shares have gained nearly 4-fold… Hong Kong stock new shares that listed within the year have delivered impressive performance, drawing fierce competition from foreign investment institutions, insurance funds, bank wealth-management subsidiaries, public funds, and industrial capital to build positions through cornerstone investment.

According to data from Choice, as of July 8, among 91 Hong Kong IPO companies year-to-date, 81.32% had introduced cornerstone investors—an increase compared with previous years. There were as many as 502 cornerstone investors participating in Hong Kong IPO subscription; most IPOs introduced 5 or more cornerstone investors.

Dong Yaohui, rotating president of the Shenzhen Institute for Financial Stability and Development, said in an interview with Shanghai Securities News reporter that among cornerstone investors that actively participated in Hong Kong IPOs in the first half of the year, the proportion of long-term capital such as foreign capital and insurance capital is particularly large. These types of funds have huge scale and long duration on the liability side; their eager participation reflects recognition of the long-term allocation value of high-quality assets in Hong Kong stocks, and also provides an important safety cushion for post-listing share-price performance.

Cornerstone investment has a higher overall “win rate”

The cornerstone investor system is an important institutional arrangement for Hong Kong IPOs. Cornerstone investors sign subscription agreements with issuers during the initial market promotion stage before the IPO, commit to subscribing for the agreed number of shares at the final determined IPO price, and accept a lock-up period of 6 to 12 months.

As of July 8, there were 502 institutions year-to-date that participated in Hong Kong IPO subscriptions through cornerstone investment, covering a variety of entities including listed companies, foreign institutions, insurance funds, and bank wealth-management subsidiaries. The top three institutions by number of cornerstone participations were: UBS Global Asset Management (Singapore), Taikang Life Insurance, and HHLR Advisors under Hillhouse. They participated in 17, 15, and 13 new-share deals, respectively. Among them, UBS Global Asset Management (Singapore) subscribed for a total of about 48.468 million shares, with a total subscription amount of about HK$3.023 billion.

From industry preferences: foreign institutions have an extremely wide participation scope and have participated in most IPO projects that introduced the cornerstone investor system. Cutting-edge tracks such as semiconductors, AI computing power, and autonomous driving have become key focus areas for deployment. Listed companies position strategically around their own industrial chains, focusing on areas such as intelligent manufacturing and consumer electronics. Insurance funds continue a prudent style, with consumption and healthcare as the base, while increasing allocation to new energy and high-end manufacturing; for semiconductors, they select leading players. Bank wealth-management subsidiaries rely on the QDII channel and prefer large-cap blue chips, with balanced deployment across sectors including technology manufacturing, consumption, and new energy.

From market performance, “bull” stocks are emerging one after another in sectors such as large AI models, memory chips, optical communications, and PCBs.

Zhipu is undoubtedly one of the most eye-catching new shares year-to-date. As of the close on July 8, since listing, the stock’s cumulative gain has reached 1,470.57%. Its cornerstone investors include leading tech enterprises such as Tencent and Alibaba. DeepSeek Intelligent’s gain since the beginning of the year is 698.2%, MegaDevice’s H-share gain is 379.38%, and TianShu Zhixin and Lancheng Technology also achieved gains of 287.28% and 201.93%, respectively—delivering substantial returns to cornerstone institutions such as UBS, HHLR, and Will Semiconductor.

Long-term capital rushes in

The active participation of long-term funds in cornerstone investment has become one of the most distinctive features of the Hong Kong IPO market year-to-date. “Long money” such as insurance institutions, bank wealth-management subsidiaries, and sovereign wealth funds has appeared densely on the cornerstone list. This not only substantially increased the cornerstone participation rate, but also significantly optimized the shareholder structure of new shares.

Insurance institutions are the leading force behind this round of long-term capital entering the market. Taking Taikang Life Insurance as an example, its presence can be found across more than 10 new-share issues including Anke Innovation, Lingyi Zhizao, Zhipu, and Biru Technology—spanning multiple industries such as consumer electronics, food and beverage, semiconductors, electrical equipment, and software services. This fully demonstrates the typical characteristic of insurers’ ability to allocate quality assets across cycles and across different tracks.

In addition, insurance institutions such as China Ping An, Great Wall Life, Sunshine Life, and New China Life have also made bulk moves year-to-date. Great Wall Life has successively appeared on the cornerstone lists of multiple companies including Shengbang Co., Guanghe Technology, Muyuan Co., and Haowei Group; Sunshine Life participated in cornerstone subscriptions for projects including Shenghong Technology and Qunkun Technology.

Besides insurance institutions, bank wealth-management subsidiaries are another long-term force that cannot be ignored. According to the reporter’s statistics, three wealth-management subsidiaries—ICBC Wealth Management, China Post Wealth Management, and Everbright Wealth Management—collectively participated in more than 20 projects, covering core tracks such as semiconductors, new energy, consumer electronics, and software services.

Hong Kong IPO market expansion is still ongoing

Analysts said that in the first half of the year, newly listed stocks in the Hong Kong market were mainly concentrated in popular tracks such as large AI models, memory chips, and PCBs. Benefiting from the AI computing power super-cycle delivering a super rally, multiple “super bull” stocks were generated, which has become the core source of excess returns for cornerstone investors. However, there are still some underlying targets that cause accounting pressure for cornerstone investors. Based on incomplete reporter statistics, among Hong Kong new shares that have listed year-to-date, about 30% of them currently trade below the issue price, with some individual stocks falling by more than 70%. In terms of the industry distribution of deals that broke below issue prices, biotech and traditional consumer sectors have become the “worst-hit” areas.

Dong Yaohui believes that cornerstone investment is essentially asset allocation based on judgments of a company’s long-term value, not risk-free arbitrage. The differentiation in returns behind it reflects differences among industries in business momentum, the quality of company fundamentals, and the reasonableness of issuance pricing.

Luo Feipeng, a researcher at China Post Bank, also said: Some emerging industries benefit from policy support and a high level of market activity; combined with the inherent scarcity of the underlying assets, they are more likely to receive approval for a premium in the secondary market. Meanwhile, for companies in traditional industries such as consumption and healthcare where fundamental support is insufficient, even if they have cornerstone “endorsement,” if the issue price is too high, they may still face pressure from valuation reversion after listing.

Hong Kong IPO market expansion is still ongoing. In terms of pipeline projects, as of July 8, the Hong Kong Exchanges and Clearing Limited has obtained approval from the Listing Committee for 24 companies pending listing. There are 528 listing applications being processed, and a total of 552 companies are still in line to list in Hong Kong. Future new-share supply is expected to remain ample.