Recently, UBS reported that the effects of the new 18C regulation introduced by the Hong Kong Stock Exchange last year are beginning to show. Their executives expect that next year, 150 to 200 companies may choose to list in Hong Kong, with total fundraising potentially reaching HKD 300 billion — if this number is realized, Hong Kong could once again become the world's largest IPO market.

On average, 3 to 4 new companies ring the bell each week. This pace has been relatively uncommon in Hong Kong's market in recent years.

Which companies will come?

From an industry distribution perspective, consumer goods, high technology, and artificial intelligence-related companies will be the main force. This aligns well with the positioning of the 18C regulation — it specifically opens the green light for tech companies that are not yet profitable, with a focus on supporting information technology, advanced manufacturing, new energy, and biotech sectors.

Previously, profitability was a hard threshold for listing these types of companies. Now, after the regulatory adjustment, as long as they meet technological innovation standards and are still in the cash-burning stage, they can enter the market. This is a genuine positive for many growth-stage tech companies.

Why now?

Several factors have come together. The Federal Reserve is still in a rate-cutting cycle, maintaining relatively loose liquidity; although the recovery of the mainland consumer market hasn't been fast, the trend is upward; and Hong Kong's local listing system has just been adjusted to be more friendly to tech companies.

There's also an interesting data point: UBS mentioned that the valuation of mainland China and Greater China listed companies is 30%-40% cheaper than U.S. stocks. This valuation gap might be one of the factors some companies consider when choosing their listing location.

What does this mean for investors?

If this wave of listings truly materializes, the market will see a new batch of tech-related targets. However, from planning to implementation, there are many variables — market conditions, regulatory approvals, and the companies’ own preparedness — that could affect the final outcome.

Moreover, the quality of newly listed companies will vary. Some may indeed have technological barriers and growth potential, while others might just be riding a timing window. Investors need to filter and judge accordingly.

Regulatory changes often bring phased opportunities, but opportunities and risks always come together. Staying attentive is right, but maintaining clarity is also essential.

Which fields of tech companies do you think are most likely to become market focal points next year? Feel free to share your thoughts.