SHANGHAI, May 7, 2026 – A rising number of A+H cross-listed IPOs have been included in the Shanghai-Hong Kong Stock Connect (Southbound) on the first trading day, with many issuers choosing to forgo the Green Shoe over-allotment option in favor of early access to Southbound liquidity. This trade-off between price stabilization and liquidity openness has become a new variable shaping IPO pricing and cross-border capital allocation, according to insights shared by Yirui ZHANG , Managing Director of CIC, in an exclusive interview with Securities Times.
Here are the key takeaways from the interview:
Yirui Zhang noted that the trend is likely to continue but may not become a universal standard. Inclusion in the Stock Connect expands the pool of eligible Southbound investors and supports trading liquidity and activity expectations. However, sustainable valuation premiums ultimately depend on the company’s fundamentals, industry prospects, and status as a core market asset. For leading hard tech enterprises with scarcity and clear industrial momentum, Stock Connect inclusion tends to amplify valuation advantages; for traditional sectors or companies with less distinct growth drivers, the improvement is more about trading convenience rather than guaranteed share price outperformance.
Regarding the pros and cons of “ditching Green Shoe for Connect inclusion,” Yirui Zhang explained that the key benefit is earlier access to Southbound capital and improved post-listing liquidity. The trade-off is the absence or reduction of a price-stabilization mechanism in the early listing stage, which may lead to more direct price volatility reflecting market supply and demand. This is not a simple binary choice but a strategic balance among float size, stabilization needs, investor structure, and longer-term trading activity. Such arrangements are more likely to be viewed positively for high-quality A+H leaders with strong fundamentals and market recognition, while the net effect for average projects depends on issuer quality and market conditions.
On whether Southbound capital’s pricing power will keep rising and reshape cross-border allocation logic, Yirui ZHANG stated that Southbound influence is expected to grow but will not single-handedly determine valuation centers for A+H stocks. The Green Shoe mainly affects initial listing stability, while long-term A-H price differentials and pricing power are rooted in corporate fundamentals, sector characteristics, liquidity structure, and investor acceptance both onshore and offshore. For benchmark and scarce assets, increased Southbound participation may further narrow the discount; for most issuers, however, mainland and Hong Kong investors will continue to allocate based on their respective risk appetites, comparable frameworks, and liquidity terms, rather than a full overhaul of pricing logic solely due to Connect eligibility.
These views were published in Securities Times’ report titled “‘No Green Shoe’ Gains Popularity: A+H Firms Prioritize Stock Connect Inclusion on Listing Day.”
About CIC
CIC is a professional consulting firm offering tailored end-to-end support across the full investment and financing lifecycle. The firm boasts a world-leading track record in guiding landmark first-in-sector IPOs across global markets, alongside unrivaled reach and in-depth coverage capabilities across specialized niche market segments.
CIC helps enterprises refine scalable business models and craft compelling capital narratives to enable seamless access to global capital markets, while serving as a trusted due diligence partner to investment institutions. It delivers granular industry insights and direct access to subject matter experts, empowering clients to identify high-value opportunities and mitigate critical risks effectively.
Media Contact
