China's tech firms choose Hong Kong or mainland based on growth ambitions, not competition

For China's hi-tech IPOs, it's Hong Kong vs the mainland, but how much does it matter?

Competition between mainland China and Hong Kong for technology initial public offerings reflects a strategic choice for emerging firms rather than a winner-takes-all contest, according to a senior executive at a national cross-border innovation platform.

Lu Peng, general manager of Beijing-based Zhongguancun International, acknowledged that rivalry exists but said the two markets serve distinct purposes. "There is naturally a degree of competition," Lu said in an interview on Thursday, referring to how tech firms select their primary listing venue.

Different markets, different advantages

"However, the two markets ultimately target different types of enterprises and investor bases," Lu explained.

Technology companies with ambitions for international expansion typically view Hong Kong as their preferred listing destination, he said. In contrast, firms seeking higher valuation multiples often choose to remain onshore, where domestic investors consistently reward growth stocks with richer price-to-earnings ratios.

The dual-track dynamic reflects how companies weigh the benefits of international reach against the prospect of stronger domestic valuations, but this choice ultimately aligns with Beijing's broader policy goals.

Source: South China Morning Post