Valuation trends

"It should be noted the rally was mostly driven by valuation normalization, with a handful of blue-chip stocks, including Tencent and Alibaba, contributing nearly 70 percent to the gains," says Kevin Liu Gang, managing director and chief offshore China and overseas portfolio strategic analyst at CICC Research.

With the price-to-earnings ratios of the HSI and the Hang Seng Tech Index now back near historical averages, Kenny Ng, securities strategist at Everbright Securities International, says he believes valuation recovery remains within a reasonable range, and there's still room to catch up.

"The outperformance of Hong Kong stocks in 2025 can be seen as excessive liquidity chasing a limited pool of assets," says Liu. "Such logic is here to stay this year."

That scarcity, however, rotated rapidly across sectors over the course of 2025. Internet-related companies led the rally in the first quarter of last year, followed by new consumption plays in the second quarter and innovative drugmakers in the third, before interest swung back to large-cap internet stocks towards year-end, according to Liu.

"Highly sought-after themes, such as AI, may remain a magnet for capital this year, but expectations are already high," he notes, warning against renewed fears of AI bubbles that sent jitters across US markets and a fresh bout of geopolitical uncertainties.

Harris interprets Hong Kong's IPO spree in 2025 as an indicator of broader economic and market trends where the US is "in tentative recovery, and Europe sits in stasis, while Asia is growing and is harnessing industry, innovation and an increasingly global outlook to profit massively and develop global leaders in key fields".

As the striking of the gong continues to resonate across the trading halls of Hong Kong's bourse, and tends to get louder each time, the city's resurgence as the globe's top IPO spot points to itself sitting within a broader rebalancing of global capital, and investors increasingly looking beyond a narrow set of markets towards Asia's growth and industrial upgrading.