(Yicai) Oct. 21 -- Chinese mainland insurance companies have invested over three times more in Hong Kong initial public offerings since last year, seeking better returns amid low domestic interest rates and limited investment options.

The insurers had invested more than HKD3.4 billion (USD440.3 million) in Hong Kong IPOs in 2025 as of yesterday, versus less than HKD1 billion in 2024, and were the cornerstone investors in at least seven, up from four in the whole of last year, according to data from Choice.

As cornerstone investors, their focus has shifted toward businesses in cutting-edge technologies and emerging consumer sectors, including electric vehicles, semiconductors, and energy storage.

Mainland insurers have become keener on Hong Kong IPOs, driven by the city’s stock market rally and the strong post-listing gains of market newcomers, as well as persistently low domestic interest rates and limited investment opportunities, said Sun Ting, a non-bank financial industry analyst at Soochow Securities.

Hong Kong IPOs offer them a viable route to stable and long-term returns, Sun said.

But investing in IPOs carries risks, as the market prospects for high-tech companies are generally highly uncertain and insurers’ research capabilities may struggle to keep pace with the rapid changes these companies undergo, a source at an insurer told Yicai.

Moreover, cornerstone investors typically face a six-month lock-up period, preventing them from adjusting their positions even if the share price drops below the issue price, resulting in potential losses, the insider pointed out.

Three of the seven Hong Kong-listed firms that received cornerstone investments from mainland insurers this year are now trading below their issue prices, according to Choice data. Among them, the shares of Hesai Group [HKG: 2525] and Aux Electric [HKG: 2580], which both debuted in September, are down nearly 18 percent and a little over 12 percent, respectively.

Editors: Tang Shihua, Futura Costaglione