Report: More Chinese Fintech Firms Are Eyeing Hong Kong IPOs

After Zhong An’s blockbuster IPO, more Chinese fintech firms are reportedly setting their sights on Hong Kong.

According to the South China Morning Post, JP Morgan’s head of global investment banking in China, Houston Huang, expects a surge in potential IPOs in Hong Kong from mainland fintech firms:

“A good fintech IPO will have a ‘push effect’ on other Chinese fintech players, prompting them to consider linking with the capital market to raise fund,” he said.

“The next Zhong An could show up in online payment, P2P lending, [financial] product distribution, or online insurance.”

To say that Zhong An Insurance’s Hong Kong offering was “good” is a bit of an understatement. Aside from being priced solidly on the top of the range, the listing was oversubscribed nearly 400 times and saw Zhong An shares pop 18% practically out of the gate.

One good IPO isn’t the only thing attracting fintech firms to Hong Kong though; unlike China, whose regulations require three years of profitability prior to applying for an offering, Hong Kong’s rules are less stringent while still offering companies easy access to mainland capital. It’s also comparatively cheaper to list there than in the U.S., which gives the former colony a slight edge against New York.

Here’s what Victor Au, Delta Asia Securities’ chief operating officer, had to add:

“Hong Kong is an open market with free flows of capital and active trading,” he said. “These are important things for companies to consider.”

“The Zhong An IPO will set a good example for fintech firms from China and elsewhere to choose Hong Kong [as a listing destination], and also prompt the city to reposition itself and boost its own fintech start-ups.”

Photo: Nik Cyclist