Author:China Fund News

Recently, Wang Yajun, head of Goldman Sachs' equity capital markets in Asia (excluding Japan), stated at a media event that the Hong Kong market has entered the AI era. However, the main stock indices do not reflect this, which explains the discrepancy between the IPO issuance and index performance. This year, the total equity financing in the Hong Kong market is expected to reach a new high, but so far the index performance has been lackluster. Wang Yajun believes that supported by the growth in terminal demand, AI companies’ capital expenditures will continue.

Total equity financing in the Hong Kong market is expected to reach a new high

Since the beginning of this year, the equity financing market has been hot, and investment bankers are exceptionally busy. Wang Yajun said that this year has been busier than last year, with fewer trips home. He is optimistic that both the total equity financing in the Hong Kong market and the IPO financing will reach new highs this year.

Data from Dealogic shows that as of July 7 this year, the total equity capital market financing by Chinese issuers in Hong Kong amounts to $67 billion, with a projected total for 2025 of $90.6 billion; the total IPO financing by Chinese issuers in Hong Kong stands at $30.3 billion, with a projected total for 2025 of $36.6 billion. Dealogic's rankings indicate that, according to the book-running perspective, the total equity capital market (ECM: including IPOs and refinancing) financing of Chinese issuers led by Goldman Sachs ranks first among domestic and foreign brokerages (investment banks).

When discussing this year’s participating investors in IPO projects, Wang Yajun stated that this year’s participants in Hong Kong IPOs cover a wider range than last year, with more global long-term funds and higher quality. The cornerstone investors have shown a similar trend: a wider participation base, a larger number, representation from more regions, and more high-quality investors. Some popular projects in the Hong Kong market this year may be hard for institutional investors to obtain ideal shares without cornerstone investment. Therefore, institutions that previously participated less in cornerstone investments have now joined in.

The Hong Kong market has entered the AI era

As of July 13 this year, the Hang Seng Index has fallen by 5.53%. During the same period, the Hang Seng Technology index has dropped by 15.22%. The contrast between the hot IPO issuance and a lackluster secondary market performance is striking. Wang Yajun believes that behind this lies the misalignment between the index and the Hong Kong stock market: the main indices can no longer represent the face of the Hong Kong market. In other words, the Hong Kong market has entered the AI era, while the indices have not kept pace.

“This year, the hottest topic in Hong Kong is AI, the most actively traded stocks are AI stocks, the best performers are AI stocks, and the largest financing amounts are also from AI-related stocks. However, the composition and adjustment of index constituents will take a long time. Therefore, there is a stark contrast in the Hong Kong market: on one hand, Hong Kong's IPO financing figures hit a historical record for the same period, and the annual IPO financing amount is expected to exceed that of 2021; on the other hand, the index performance is average,” said Wang Yajun.

“AI is a high-risk industry, and price volatility is normal. If there is no tolerance for volatility, it’s hard to cultivate excellent companies. A market must tolerate companies ‘from 0 to 1’ and also tolerate companies ‘from 1 to 0’ to nurture good enterprises,” Wang Yajun further stated.

“Now, many companies are competing to establish large models, and the competition is fierce. However, ultimately, the winner-takes-all scenario will prevail in the large model field. For users, the switching cost from model A to model B is low. Considering the industry development patterns and user characteristics in utilizing large models, it is difficult for large model investors to place their bets on a single model company. Investors are likely to hedge their bets on several leading model companies until a clear winner emerges,” Wang Yajun explained.

Capital expenditures in the AI field may continue

When asked if there is a bubble in the AI field, Wang Yajun stated that the use of AI is becoming increasingly prevalent, and the underlying capital expenditures supporting AI, such as computing power, chips, storage, and materials, will continue to grow. AI demand is on the rise, and customer needs will determine the direction of capital expenditure. Therefore, the overall capital expenditures of AI enterprises will continue to increase.

Wang Yajun noted that China has a very complete industrial chain, and some of these enterprises will eventually land on the Hong Kong capital market. In the second half of the year, more AI companies will be seen IPOing in Hong Kong or listing on the Sci-Tech Innovation Board.

In early 2026, the Hong Kong Securities and Futures Commission issued a circular stating that there were serious deficiencies in the preparation of certain listing documents and responses to regulatory opinions, and that several key regulatory processes and procedures were not handled during the sale stage. The Hong Kong Securities and Futures Commission has mandated that the number of active projects being promoted by the same signing sponsor simultaneously should not exceed six. Wang Yajun believes that the measures taken by the Hong Kong Securities and Futures Commission aim to improve the quality of Hong Kong IPOs and enhance the quality of the entire Hong Kong market.