Hong Kong vs Shanghai STAR Market: Cross-Border Issuer Strategy
The Shanghai STAR Market, launched in 2019, has emerged as a viable alternative to Hong Kong for China-domiciled technology companies.
The Shanghai STAR Market, launched in 2019, has emerged as a viable alternative to Hong Kong for China-domiciled technology companies. The strategic calculus for issuers choosing between the two has several dimensions. Valuation: STAR Market listings typically command higher price-to-earnings multiples than Hong Kong for comparable technology companies, driven by domestic Chinese retail investor demand. Regulatory speed: the STAR Market registration-based IPO system processes applications faster than the HKEX dual-filing process. Currency: STAR Market listings are RMB-denominated, which suits companies with primarily domestic revenue and no foreign currency requirements. However, Hong Kong retains decisive advantages: the ability to raise capital in a freely convertible currency, access to the global institutional investor base, a more developed secondary fundraising framework (rights issues, top-up placements), and inclusion in global indices (MSCI, FTSE). A growing number of issuers are pursuing a dual-listing strategy: primary listing on the STAR Market for domestic valuation and branding, with a secondary or dual-primary listing in Hong Kong to access global capital.