Goldman Sachs Wang Yajun: Hong Kong's annual IPO capital raising is expected to hit 60 billion US dollars and reach a record high

The Zhitong Finance App learned that Hong Kong's IPO market was booming in the first half of this year. Wang Yajun, head of the stock capital market at Goldman Sachs Asia (excluding Japan), said at a media conference that he has full confidence in the Hong Kong stock IPO market. With strong project reserves and multiple favorable support, the Hong Kong stock IPO fund-raising scale is expected to continue to be hot in the second half of the year, or even surpass the first half of the year. It is expected to hit 60 billion US dollars (about HK$468 billion) throughout the year.

Wang Yajun believes that the Hong Kong market has fully entered a new stage of development led by AI. “The most active themes and stocks, the best performing and most funded stocks, are all related to AI.” In response to the AI bubble that is being hotly discussed in the market, he said that the core of judging the industry's prospects is underlying demand, and there is no practical point in simply debating whether there is a bubble at present.

Referring to recent marginal changes on the supply and demand side, such as rental computing power and storage expansion, Wang Yajun believes that there is no need for the market to overinterpret individual corporate behavior. From the demand side, the current scale of AI usage for individuals and enterprises continues to expand, and capital expenditure requirements for the entire industry chain, such as computing power, chips, and storage, have been rising for a long time.

This round of the AI explosion in Hong Kong stocks is a structural bullish trend. The listing of A+H shares has become the core pillar of Hong Kong stock fund-raising this year

Comparing the AI sector in different markets, he mentioned that China and the US have the most complete AI industry chain, covering the entire industry chain of large models, computing power, chips, etc., and the categories are richer. The Hong Kong market has more comprehensive coverage in the AI field, and more Chinese AI companies will enter Hong Kong stocks in the future. The current AI explosion in Hong Kong stocks is a structural bullish market driven by changes in the AI industry; it is not driven by the economic cycle.

Referring to the specific investment pricing logic, Wang Yajun pointed out that the big model circuit has obvious “winner-take-all” characteristics, leading companies in the industry compete fiercely, and the stock prices fluctuate greatly in response to listed companies' stock prices. Currently, it is difficult to accurately measure the long-term profits of model companies in the market. It mainly relies on revenue growth as the core basis for valuation and pricing. “Investors will invest in every leading model company until the industry decides on a giant.”

Judging from the primary market structure, A+H stock listing has become the core pillar of Hong Kong stock fund-raising this year. Wang Yajun pointed out that this is mainly due to the fact that semiconductor and hardware technology giants that A-shares have cultivated over many years have landed in Hong Kong stocks, and the volume of capital raised for a single project is huge, boosting the overall financing scale; while some startups that first IPOs in Hong Kong are small, they have outstanding room for growth.

The reason behind the blowout in IPOs is inseparable from the policy support of Hong Kong's regulatory authorities. The Hong Kong Stock Exchange continues to optimize supporting listing rules for technology companies, and recently issued consultation documents such as lowering the threshold for different shares and expanding the scope of secondary listings. In response, Wang Yajun said that the purpose of the reform is to improve the efficiency of market operation and improve the overall quality of the market, not to reduce the supply of IPOs. Optimized rules will attract long-term global capital to enter the market, and in turn, drive more science and innovation companies to go public in Hong Kong.

The lifting of the ban will not change the upward structural trend of the market

The Hong Kong stock market will usher in a number of centralized lifting arrangements in the second half of the year. Wang Yajun believes that in terms of both financing amount and share of total market capitalization, such lifting of the ban will not change the upward structural trend of the market. Because the Hong Kong market has large capacity and international characteristics, there is no need to lower expectations for the popularity of the IPO market for half a year as a result.

Regarding the diversion of large financing from overseas giants that the market is concerned about, Wang Yajun admits that large-scale financing by the world's leading technology companies may squeeze capital in the short term, but the market can be digested in the short term.

Major indices currently do not represent the state of the Hong Kong market

It is worth noting that although the AI sector is hot, the Hong Kong stock market is already showing a “double sky of ice and fire.” The Hang Seng Index fell 10.7% in the first half of the year, outperforming major Asian stock markets; the Hang Seng Technology Index fell 18.9% in half a day. Wang Yajun said that the main indices currently do not represent the current state of the Hong Kong market.

He explained that the two major index constituent stocks have a long renewal cycle, and it is not yet possible to reflect the current situation where the Hong Kong market has entered the AI era. As a result, there is a divergence between the weakening of the index and the general rise of IPOs and individual AI stocks. He also added that there is no sign of weakening in the current subscription popularity of new stocks on the AI circuit.