HKEX Marks 2nd Anniversary of New Listing Regime

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HKEX celebrates the second anniversary of its new listing regime this week. On 30 April 2018, HKEX launched three new chapters to its Listing Rules to allow pre-revenue biotech companies and new economy companies with non-standard share structures to raise capital in Hong Kong for the first time.

The listing reform has added vibrancy and diversity to our markets, and has helped cultivate the local ecosystem for biotech investments to make Hong Kong the world’s second largest biotech fundraising hub. In November 2019, we welcomed Alibaba Group Holding, the first secondary listing of an innovative company, to Hong Kong, in one of the world’s biggest public offerings of the year that raised HK$101.2 billion.

Please find below some of the key achievements and statistics marking the second anniversary of this important development in Hong Kong’s financial markets:

84 new economy (including healthcare and biotech) companies have listed in Hong Kong since the new listing rules took effect, raising a total of HK$302.3 billion, and accounting for 50.8 per cent of IPO funds raised in Hong Kong during the period

New Economy listings gain momentum

Funds raised via new economy IPOs rose to approximately 49 per cent of total IPO fundraising in both 2018 and 2019, compared with 34.6 per cent in 2017 and 15.2 per cent in 2016
During 2018, we welcomed a total of 32 new economy companies to our markets, raising HK$142.5 billion, followed by 47 such listings in 2019, raising HK$154.6 billion
New economy companies listed since the new listing regime took effect now account for 17 per cent of Hong Kong’s total market capitalisation
Average daily turnover (ADT) contribution from new economy companies listed since 2017 in the cash equities market rose from 4.1 per cent in 2017 to 15.4 per cent in 2019

Healthcare and Biotech IPOs blossom

There are currently 146 healthcare companies¹ listed on Hong Kong markets, with a combined market capitalisation of HK$1.85 trillion, up 72 per cent from April 2018²
Since the new listing regime took effect, HKEX has welcomed 28 healthcare and biotech listings on the Main Board in Hong Kong, raising HK$82.5 billion
These include 16 pre-revenue biotech companies that have listed under Chapter 18A, raising a total of HK$39.7 billion, accounting for 6.7 per cent of IPO funds raised in Hong Kong during the period
The pipeline is strong: 11 healthcare and biotech companies have submitted IPO applications so far in 2020, including 3 pre-revenue biotech companies pursuing a Chapter 18A listing

Background on new listing regime

The new listing regime has successfully broadened Hong Kong’s issuer base and attracted listings of companies in high-growth emerging and innovative industries. The new Listing Regime encapsulates three new chapters in our Listing Rules:

Chapter 8A – permits listings of innovative companies with weighted voting rights (WVR) structures;
Chapter 18A – permits listings of pre-revenue biotech issuers that do not meet any of the Main Board financial eligibility; and
Chapter 19C – establishes a new concessionary secondary listing route for Greater China and international companies that wish to secondary list in Hong Kong.

Note:

¹Healthcare companies defined by Hang Seng Index Sector Classification, which include 18A biotech companies
²Compared with Healthcare Market Capitalisation from 30 April 2018 to 27 April 2020

Updated 17 Nov 2020