Growth Dragons Weekly: Hong Kong Is Back—HKEX Record Profits, Property Stocks Flying, and China AI Continues to Impress
What happened in China this week:
HKEX Smashes Records in 2025—Shareholders Get 35% Dividend Raise
HK Property Stocks Are Flying—Sun Hung Kai Leads With 51% YTD Gain
Only China Can Rival US AI and Tech Leadership—Huawei, ByteDance, and China LLMs Show the Gap Is Closing
Meet Sugon—China’s AI Infrastructure Builder Reports 14% Revenue Growth
Baidu’s AI Revenue Is Surging, But At What Cost? Investors Aren’t Convinced
#1 HKEX Smashes Records in 2025—Shareholders Get 35% Dividend Raise
Hong Kong Exchanges and Clearing Limited (HKEX) just delivered a record-breaking 2025. And not just by a small margin—we’re talking a 36% jump in net profit to HK$17.75 billion, its second straight year of record earnings.
The Numbers Are Hard to Ignore
Let’s start with the obvious—trading activity went through the roof.
Cash market average daily turnover surged 90% year-on-year to HK$249.8 billion. To put that in perspective, 15 of the 20 highest trading days in HKEX’s entire history happened in 2025. That’s not a recovery—that’s a boom.
The top line tells the same story. Trading fees jumped 80% to HK$6.17 billion. Clearing fees rose 58% to HK$5.71 billion.
Earnings per share came in at HK$14.05, and the exchange maintained its 90% payout ratio—total dividends of HK$12.52 per share, up from HK$9.26 in 2024. That’s a 35% pay raise for investors.
But despite the higher dividends, the yield sits at just 2.21%. That’s because the stock has run up so much—great for existing holders, not so great if you’re looking to enter now.
IPO Market: Back on Top
Hong Kong took back its throne and ranked #1 globally for IPO fundraising in 2025.
A total of HK$286.9 billion was raised from 119 listings. That’s a 226% jump year-on-year. Two of the world’s five largest IPOs happened in Hong Kong. And new economy sectors—think biotech and specialist tech—accounted for 66% of funds raised, with 21 listings under Chapter 18.
Issuers came from Kazakhstan, Singapore, Thailand, and the UAE. That’s a far cry from the “Hong Kong is dead” narrative that was floating around just a couple of years ago.
Expanding Beyond Equities
CEO Bonnie Chan has signalled that the next phase of growth will go beyond equities—into fixed income, commodities, and multi-asset platforms.
HKEX has historically been very equity-heavy, and diversifying the revenue base makes sense as global investors seek more ways to access Asia.
To that end, HKEX opened an office in Riyadh, partnered with the Abu Dhabi Securities Exchange, and launched a commodities pricing unit in Dubai. They’ve also added the Stock Exchange of Thailand to their recognised stock exchange network, strengthening ties across Southeast Asia and the Middle East.
In other words, they’re not just waiting for China listings anymore. They’re actively building pipelines across emerging markets.
T+1 Settlement Is Coming
HKEX is consulting the market on moving from T+2 to T+1 settlement.
The US and Canada already made the switch in 2024. Mainland China has been on T+1 for ages. Hong Kong following suit would improve capital efficiency, reduce counterparty risk, and keep it competitive with the big boys.
It’s one of those behind-the-scenes changes that doesn’t grab headlines but makes a real difference to how efficiently the market operates.
The Big Picture
HKEX enters 2026 with strong turnover trends, a healthy IPO pipeline, and clear strategic direction. The record earnings give it the financial firepower to invest in growth initiatives.
But let’s not get carried away. A lot of 2025’s performance was driven by the China tech rebound, and that can reverse quickly if sentiment sours again. The real test is whether HKEX’s diversification efforts—into fixed income, commodities, Middle East partnerships—can deliver meaningful revenue beyond just equity trading.
For now, the momentum is undeniably there. Whether it lasts depends on execution.
#2 HK Property Stocks Are Flying—Sun Hung Kai Leads With 51% YTD Gain
It’s not just the stock market that’s doing well in Hong Kong—the property market is showing signs of life too.
According to the Rating and Valuation Department, second-hand home prices rose 0.53% month-on-month in January, marking ten straight months of stability. The lived-in home price index climbed to 301.4—its highest since mid-2024—rebounding nearly 6% from the March trough. On a full-year basis, prices rose 3.66% in 2025, ending a painful three-year correction.
Rents have been even stronger. The rental index hit a fresh peak of 201.1 in January, rising for 14 consecutive months. Tight supply, resilient expatriate demand, and improving sentiment have pushed yields higher. Analysts expect residential transaction volumes to jump over 20% in 2026, potentially returning toward the 80,000-deal annual levels we saw during 2018–2021.
What’s Driving the Recovery?
Three forces are at play.
First, anticipated US rate cuts are easing mortgage burdens and improving affordability. Second, mainland Chinese capital has returned selectively—especially into mass and mid-tier segments. Third, rising rents are improving holding economics, narrowing the gap between financing costs and rental yields.
So the macro setup looks decent. But beneath the cyclical rebound, there are structural headwinds that aren’t going away.
Grade-A office vacancies in Central and West Kowloon remain elevated thanks to new supply and corporate downsizing. Demographic shifts and “northbound consumption” toward Shenzhen are pressuring retail rents. And the government’s land-premium model is squeezing developers’ margins—particularly under large-scale initiatives like the Northern Metropolis.
In short, prices are stabilising, but profitability is being structurally reset.
HK Property Developer Stocks Rally
And rally they have. Year-to-date, Sun Hung Kai Properties (SHKP) leads the pack by a wide margin, surging 51%. CK Asset and MTR are neck and neck at around 23%, while Henderson is up 22% and Hysan trails at 16%.
