last two years，Hong Kong stock marketOutstanding performance。2017Hong Kong stocks rose 36% throughout the year，Leading the world，And broke through the 2007 "big era" high on January 17，Hit a new all-time high。In addition to secondary market performance，The fundraising capabilities of Hong Kong’s capital market also deserve attention。
Hong Kong IPO MarketFundraising capabilities continue to improve
Market data from the Hong Kong Stock Exchange in 2017 shows，Hong Kong's new stock market shows strong financing appeal，Mainly reflected in the following three aspects：
- 2017Year，Hong Kong Stock Exchange’s new share issuance raised US$16.427 billion，Ranked third among global exchanges。
- 2017Year，The number of newly listed companies on the Hong Kong Stock Exchange is 174，An increase of 1% compared with 2016。
- Hong Kong stock listings generally charge an underwriting fee of 2.5%-3% of the financing amount，Calculate this，The underwriting fees shared by various investment banks in the Hong Kong IPO market are approximately US$411 million to US$493 million.。
The top five Hong Kong IPOs are all Chinese-funded companies
2017A distinctive feature of the Hong Kong IPO market in 2018，The top five companies in terms of IPO funds raised are all Chinese-funded enterprises，And the scale of fundraising is generally large。
2017Year，The top five companies raising funds from initial public offerings on the Hong Kong Stock Exchange are Guotai Junan、Zhongan Insurance、China Literature Group、Zhongyuan Bank and Guangzhou Rural Commercial Bank，The amount of funds raised was HK$16.5 billion respectively.、118billion Hong Kong dollars、87billion Hong Kong dollars、93HKD 7.8 billion and HKD 7.8 billion，A total of approximately HK$59.08 billion。
in，Yuewen Group froze funds amounting to HK$520 billion during the subscription stage，Set a record for the highest number of frozen funds for IPOs on the Hong Kong Stock Exchange in 2017，And became the second largest new stock with the highest frozen capital scale in the history of Hong Kong stocks.。
Comparison of the fundraising scale of the top five IPOs of A-shares and Hong Kong stocks
2017Year，The top five IPO funds raised in the A-share market are China Galaxy Securities、Caitong Securities、Huaneng Hydropower、Zheshang Securities and Zhongyuan Securities，The amount of funds raised was RMB 4.086 billion respectively.、40.85billion yuan、39.06billion yuan、28.17100 million yuan and 2.8 billion yuan，A total of 17.694 billion yuan。
If calculated based on the exchange rate of 1 Hong Kong dollar to 0.85 yuan，2017The total funds raised by the five companies with the highest funds raised in the Hong Kong market in 2018，This is 2.84 times the total amount raised by the top five mainland companies.。It can be seen that，Hong Kong’s capital market still has strong capacity to undertake large-scale financing projects。
Chinese securities firmsIncreased share of Hong Kong IPO sponsorship
in recent years，The craze for mainland companies to list in Hong Kong continues to heat up，It has also led to the continuous increase in the market share of Chinese securities firms in Hong Kong.。
Judging from the top five companies with the largest amount of funds raised in 2017，A total of 19 institutions are responsible for joint sponsorship，10 of them are Chinese-funded institutions。The four joint sponsors of Guangzhou Rural Commercial Bank are all Chinese-funded institutions.。
Chinese-funded institutions participating in relevant projects include：
- Guotai Junan International、SPDB International participated in the sponsorship of Guotai Junan Securities’ listing in Hong Kong；
- CMB International participates in the sponsorship of ZhongAn Online Property Insurance’s listing in Hong Kong；
- CITIC Securities International、CCB International、CMB International participates in sponsoring the listing of Zhongyuan Bank；
- Guangzhou Rural Commercial Bank’s four joint sponsors are all Chinese-funded，CICC Hong Kong Securities、China Merchants Securities International、CCB International、ABC International。
Hong Kong IPO underwriting fees and investment banking division of labor mechanism
2017Year，Hong Kong IPO market underwriting revenue reaches approximately US$411 million。The rules for underwriting and sponsoring companies in Hong Kong to participate in listing projects are slightly different from those in the Mainland.，A single listing project is usually undertaken by investment banks at different levels.，Clear division of labor among various organizations。
- In addition to undertaking some of the work of other levels of investment banks, the joint sponsor，Still need to coordinate with law firms、Securities Regulatory Commissionand other institutions，And be responsible for the preparation of documents before the hearing、Preliminary due diligence and other core tasks。
- The joint global coordinator is mainly responsible for sales and market promotion，Can see all customer order status around the world，And can allocate shares according to the summary order。
- The Joint Global Coordinator will typically be based on internal compliance requirements，Require joint sponsors to provide relevant due diligence reports。
- The joint bookkeeper is mainly responsible for the role of order collection，It is usually not possible to see all orders，Nor does it have distribution and pricing rights。
- The joint lead manager is mainly responsible for writing research reports after the company is listed.。
Generally speaking，Hong Kong stock listings charge underwriting fees of 2.5%-3% of the financing amount。in，Joint sponsor、The joint global coordinator usually gets 70%-80%，The remaining 20%-30% is shared by the joint bookrunners and joint lead managers。
Hong Kong Stock Exchange data shows，2017HKEX initial public offering raised US$16.427 billion in 2018，Ranked third among global exchanges。this means，Only the underwriting process of new stock listings，The scale of investment banking revenue in the Hong Kong market is approximately US$411 million to US$493 million.。
The listing fees for Hong Kong stocks are not higher than those for A-shares
From the perspective of issuance costs，Hong Kong listing fees are not necessarily higher than those for A-shares。Market statistics show，2017The proportion of issuance expenses of the top 10 companies in terms of total A-share funds raised in the year generally accounts for more than 3% of total funds raised.，Some companies even exceed 5%。
In comparison，2017The listing expenses of the top 10 companies in Hong Kong in terms of total funds raised generally accounted for about 3% of the total funds raised.。Cathay Junan ranked among the top three companies in terms of funds raised that year、Zhongan Insurance、China Literature Group as an example，Listing fees were RMB 384 million、3.95100 million yuan and 215 million yuan。
If the amount of funds raised is still converted at the exchange rate of 1 Hong Kong dollar to 0.85 yuan,，The listing expenses of the above three companies accounted for 2.27% of the total funds raised respectively.、3.17%and 3%。
Core considerations for companies choosing a listing location
For businesses，The cost of listing A-shares or Hong Kong shares is not the main deciding factor in choosing a listing location。The core factors that really affect the choice of listing place，Usually includes valuation levels、Approval speed and company positioning。
Valuation，The overall valuation of A-shares is generally higher than that of Hong Kong stocks，Strongly attractive to companies planning to be listed。Approval efficiency，As A-share IPO review speeds up，The difference in queuing time between the two places is no longer significant。
butHong Kong Listing Rulesrelatively more flexible，Some failed to meet A-share listing requirements、However, companies that meet the conditions for listing in Hong Kong，Will turn to Hong Kong capital market。
also，If the company itself positions itself internationally，And there is a need to expand business in overseas markets，Priority will also be given to listing in Hong Kong。The investor structure in the Hong Kong market is more diverse，Different from the relatively retail market in mainland China，Hong Kong investors are mainly professional institutional investors。
Foreign investment philosophy focuses more on value investment，Focus on business fundamentals。at the same time，As the Hong Kong market gathers global institutional investors，Companies also have more channels for refinancing after going public.。
The advantages of Chinese securities firms are evident, but their global service capabilities still need to be improved
In the past, mainland companies listed in Hong Kong were mainly large state-owned enterprises.，Foreign investment banks’ customer resources、Obvious advantages in international market knowledge and local network。in recent years，Mainland companies listed in Hong Kong are becoming more diverse in scale，Many companies have already cooperated with Chinese securities firms for many years.，Chinese securities firms are more familiar with its needs and business characteristics。
For companies looking to attract mainland investors，The advantages of Chinese securities companies in the Hong Kong market begin to be further reflected。
2017Year，There are 55 mainland companies listed on the Hong Kong Stock Exchange.，Accounting for 32% of the number of listed companies that year。As of December 29, 2017，The total number of mainland companies is 1,051，Total market capitalization reaches HK$22.52 trillion。Mainland companies go public in Hong Kong，Allowing Chinese investment banks to gain greater business space in the Hong Kong capital market。
but，Competition in the Hong Kong market remains fierce。In comparison，Number of institutions of foreign investment banks、Staff size、Still have advantages in local resources and global sales network。Hong Kong as an international financial center，Facing the United States、European and other global funds，Chinese securities firms are still relatively limited in terms of global channels and branch distribution.，Major foreign banks usually have mature global sales teams and roadshow networks.。
Although some Chinese securities firms have begun to set up offices overseas in recent years,，But in the number of institutions、Staff size and local resources，Major foreign banks still have stronger competitiveness。For large IPO projects，Chinese securities firms still need to continue to improve their ability to independently complete large orders and provide global services.，Some larger-scale projects are usually completed in cooperation with major foreign banks.。
About Hong Kong Xintong
Hong Kong Xintong focuses onHong Kong Securities and Futures Commission license、Hong Kong Insurance Broker License、Hong Kong MSO Licenseandmoneylenders licenseApply for service，Assist customers to applyUS MSB license、NFA、RIA、Canadian MSB license、Mainstream overseas financial licenses such as Australia and Mexico，Support enterprises to achieve compliance expansion of cross-border financial business。Also availableCayman Islands Offshore Company Registration、Offshore fund establishment and global compliance operations and other services，Help enterprises expand their presence in international markets。Provide one-stop compliance solutions for enterprises。To learn more，Please contactHong Kong Information Communications Consultant。
