China Musings: Capturing Alpha in HK IPOs

This report analyzes the HK IPO market, identifying key drivers of post-listing alpha and providing a framework to navigate the record-high lock-up expirations anticipated over the next 12 months.

Key Takeaways

• 1.HK IPOs have seen a resurgence; post-listing performance is driven by large-cap size, 30-50% cornerstone ownership, and high retail interest.
• 2.Lock-up expiration is a significant headwind with $274bn of potential supply, though index and Southbound inclusion act as liquidity buffers.

Table of Contents

• Factors impacting post-IPO performance
• Performance around lockup expiry
• Southbound and index inclusion
• Watchlists for post-IPO outperforms, lock-up share expiry and Southbound inclusion
• Disclosure Appendix

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