Summary of Key Points
Recently, AI giant companies from the Hong Kong stock market, such as Zhipu and MiniMax, have initiated the process of returning to the A-share market, attracting significant attention from the market. This phenomenon reflects a mutual optimization of listing regulations between the two regions: the implementation of the fifth set of standards for the A-share Science and Technology Innovation Board (STAR Market) and the fourth set of standards for the GEM (Growth Enterprise Market), which now allow unprofitable cutting-edge technology companies to list. At the same time, the Hong Kong stock market is also reforming to attract A-share companies to list there. A trend of "two-way movement" has emerged—some A-share companies are moving to Hong Kong (A-to-H) to expand overseas and raise funds for expansion, while some Hong Kong companies are returning to the A-share market (H-to-A) to alleviate financial pressure and obtain higher valuations. However, the return to the A-share market from Hong Kong faces challenges related to regulatory differences between the two regions.
Detailed Analysis
1. AI Giant Companies Returning to the A-share Market: Needing Funds and Seeking Higher Valuations
Zhipu and MiniMax are typical AI companies that rely on heavy investment for growth. In 2025, Zhipu generated revenue of 724 million yuan but incurred a loss of 4.7 billion yuan, while MiniMax had revenue of less than 80 million US dollars and a loss of 1.87 billion US dollars. The main motivations for their return to the A-share market are twofold:
- Financial Need: The development of AI models requires continuous funding (for purchasing computing power and hiring talent), which cannot be fully covered by financing in the Hong Kong stock market alone. Returning to the A-share market would provide them with additional funding options, such as Zhipu's plan to raise 15 billion yuan.
- A-share Investors' Interest: A-share investors are enthusiastic about hot technology sectors and are willing to offer higher valuations to unprofitable companies with growth potential. These companies may be undervalued in the Hong Kong stock market due to their losses but can enjoy a premium for technology stocks in the A-share market.
In simple terms, "the A-share market has more funds available and is willing to invest in us, so returning there will allow us to raise more money for further development."
2. A-share Market Policies Open the Door: New Paths for Unprofitable Companies to List
Previously, a profit requirement was a basic condition for listing on the A-share market. However, reforms to the STAR Market and GEM have eliminated this restriction:
- The Fifth Set of Standards for the STAR Market: Re-launched in June 2025, these standards allow unprofitable companies in fields such as artificial intelligence and commercial aerospace to list as long as they meet conditions like a market value of ≥20 billion yuan and a research and development (R&D) investment ratio of ≥10%. Zhipu and MiniMax are able to return to the A-share market thanks to these policies.
- The Fourth Set of Standards for the GEM: Introduced in April this year, these standards do not require profitability and consider a combination of indicators such as compound annual revenue growth, R&D investment, and market value. For example, the criteria include "compound annual revenue growth of ≥30% in the last three years + R&D investment ratio of ≥15% + market value of ≥5 billion yuan."
- Greater Bay Area Policy Support: Companies listed in Hong Kong are allowed to return to the Shenzhen Stock Exchange, further lowering the barriers for H-to-A listings.
These policies have opened the door for unprofitable technology companies to list on the A-share market and provide them with the opportunity to raise funds.
3. Regulatory Challenges for Returning to the A-share Market from Hong Kong
Returning to the A-share market from Hong Kong is not as straightforward as it may seem, mainly due to differences in regulatory requirements between the two regions. The A-share market has stricter requirements for compliance:
- Revenue Recognition: AI companies have complex business models (e.g., software licensing, API calls, custom development), and the A-share market requires verification of revenue directly with end customers and suppliers. This can be difficult if the customers are overseas or uncooperative.
- R&D Expense Accounting: The A-share market has detailed rules for the recognition and capitalization of R&D expenses (e.g., which expenses can be considered R&D and when they can be capitalized), while the Hong Kong stock market is relatively more flexible.
- Related Party Transactions: The A-share market strictly examines whether related party transactions are fair and has a broader definition of related parties, with more detailed audits.
To illustrate, listing in the Hong Kong stock market is like taking a "relaxed exam," while the A-share market is like taking an "intensive additional test." Companies returning to the A-share market must adapt to these stricter regulations.
4. High Interest from A-share Companies to List in Hong Kong (A-to-H)
There is also significant interest from A-share companies to list in Hong Kong (38 A-share companies have planned to do so this year), with various motivations:
- Expanding Overseas Business: Tech companies want to enter overseas markets, and listing in Hong Kong can attract international capital and help them establish overseas equity incentive systems to retain talent.
- Raising Funds for Expansion: Some companies have booming orders and need to expand production. Listing in Hong Kong allows them to raise funds quickly through mechanisms like "flash offerings."
- Advantages of the Hong Kong Stock Market: The Hong Kong stock market has transparent processes and stable review times. Recent reforms (e.g., dedicated channels for tech companies and confidential filing options) have also improved the efficiency of listings.
- H-share Premiums: Some high-tech companies' H-share prices are higher than their A-share prices. For example, CATL's H-share price is 54% higher than its A-share price, indicating international recognition of China's high-tech capabilities. Companies can sell their shares at a higher price in Hong Kong.
In summary, A-share companies are moving to Hong Kong to expand overseas and raise additional funds, taking advantage of the market's internationalization and regulatory benefits.
5. Future Trend: Two-way Movement Becoming the Norm
As the differences between the listing regulations of the two regions narrow (for example, the review speeds of the A-share STAR Market and GEM are approaching those of the Hong Kong stock market), "A+H" listings will become more common for companies:
- For Unprofitable Tech Companies: They may first list in Hong Kong due to lower entry barriers and then return to the A-share market when A-share policies allow it, seeking higher valuations.
- For Mature Companies: They may list on the A-share market first and then move to Hong Kong to expand overseas or return to the A-share market to secure additional funds.
In the long term, the price difference between A-share and H-share markets will gradually shrink. However, in the short term, differences in investment preferences will still exist. This two-way movement will ultimately enable companies to leverage the advantages of both markets for faster development.
Conclusion
Whether it's returning from Hong Kong to the A-share market or moving from the A-share market to Hong Kong, companies are essentially taking advantage of the regulatory benefits of the capital markets in both regions to address their financial, market, and talent needs. For individual investors, this means more investment opportunities in technology sectors, but they should also be aware of the risks associated with unprofitable companies. For companies, the choice of listing market depends on their specific needs (e.g., funding requirements, overseas expansion) and regulatory compatibility.
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