Liquidity Revival Sparks Structural Bull Run in Recent Listings
Hong Kong’s stock market has staged a remarkable comeback since September, with improving liquidity and valuations fueling a structural bull run in innovative drugmakers and next-gen consumer stocks. The real action, however, lies in recent listings – 17 IPOs have doubled year-to-date as of June 6, with biotech and discretionary spending plays leading the charge.
The New Consumer Vanguard
Dubbed the “Fab Four” of Hong Kong’s consumption upgrade:
- Lao Feng Xiang Gold (06181.HK): +277% since June 2024 IPO
- Mixue Group (02097.HK): +85% post March 2025 debut
- MGPIN Cosmetics (01318.HK): +90% since late 2023 listing
- POP MART (09992.HK): The veteran among newcomers, still climbing
The Anatomy of a Rally
Market experts attribute the boom to a perfect storm:
- Liquidity Tailwinds
- Average daily turnover surged 38% YoY to HK$156B
- Short-selling ratio dropped to 12%, lowest since 2022
- Structural Shifts
- “Gen-Z consumers are rewriting the playbook,” notes a hedge fund manager. “We’re seeing 20%+ CAGR in experiential spending versus single-digits for staples.”
- Biotech’s Perfect Storm:
- FDA approvals of China-developed ADCs up 300% YoY
- Average licensing deal value crosses $500M milestone
Valuation Crossroads
The rally faces its first major test with interim earnings due next month:
- Overheated Signals
- Lao Feng Xiang trading at 98x P/E
- POP MART at 97x despite slowing same-store sales
- HealthWay’s 456x P/S ratio with declining revenue
“These valuations bake in 40%+ earnings growth – anything short will trigger violent corrections,” warns a sell-side analyst tracking the space.
The Road Ahead
Market participants see three potential scenarios:
- Soft Landing (40% Probability)
- Earnings meet elevated expectations
- Sector rotation into financials cools but doesn’t crash the rally
- Correction (50%)
- June-July sees 20-30% pullback
- Strong fundamentals prevent full retracement
- Melt-Up (10%)
- Mainland capital floods south via Stock Connect
- Short squeeze pushes HSI above 22,000
As trading desks brace for earnings season, one thing is clear: Hong Kong’s market revival has found its champions in these plucky newcomers. Whether they can deliver on their promise will determine if this is the start of a new era – or just another speculative bubble.
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