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Next Capital: Leveraging Opportunities in the Hong Kong IPO Market

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The case introduces IPOs in Hong Kong from the perspectives of both issuers and investors. Hong Kong was a popular choice among many local and nonlocal companies for listing. It ranked as first globally in terms of total proceeds raised for 5 out of 10 years between 2011 and 2020.

The case is set in the fourth quarter of 2020, when the Ant Group entered Hong Kong for its IPO. Students take on the role of Lin Wong, head of the investment team of a new investment fund under Next Capital Investment Limited. Students have the opportunity to learn about IPOs from various perspectives: as pre-IPO investors in a fund’s investment that is ready to go public, as retail investors to subscribe for high-profile IPOs in the market, and as potential cornerstone investors to subscribe for a portion in the global offering of an IPO.



Learning Objective:

The case will allow students to:

  1. Learn about IPO markets and identify the unique features of the IPO market in Hong Kong.
  2. Improve decision-making skills on corporate listings and IPO investments.
  3. Identify the driving forces of the Hong Kong listing rules reform in 2018, and assess its impact on the the economy and capital market of Hong Kong.
  4. Enhance risk management skills related to IPO investments by understanding the risks associated with subscribing to IPOs.
  5. Understand the financial terms associated with IPOs, such as sponsors and underwriters, cornerstone investors, and greenshoe option.
  6. Get familiar with the IPO process, the listing rules, the intermediaries involved, the requirements of corporate board structure and disclosure in Hong Kong.

Year of Publication: 2021
Ref. No.: 21/702C
Discipline: Finance & Investments
Industry: Banks & Diversified Financials
Country: Hong Kong SAR
Company: Next Capital Investment Limited (fictitious)
Languages: English
Pages of Text: 11