• 61% of HKEX IPO funds raised from New Economy listings in past three years
• Hong Kong has become Asia’s largest and the world’s second largest biotech fundraising hub, with 31 pre-revenue biotech companies listings
• 13 new homecoming listings welcomed, raising a total of HK$285.8 billion

Hong Kong Exchanges and Clearing Limited (HKEX) this week celebrates the third anniversary of its New Listing Regime. In 2018, HKEX launched three new chapters in Hong Kong’s listing rules to allow pre-revenue biotech companies, New Economy companies with weighted voting rights (WVR) structures, and qualified overseas listed companies to raise capital in Hong Kong, fuelling a new growth story in Asia’s leading international capital market.

HKEX Interim Chief Executive Calvin Tai said: “We are very pleased to see that the introduction of the new listing regime has helped to transform our markets. HKEX has become the go-to international capital market for New Economy companies, and is already the world’s second-biggest biotech fundraising hub. HKEX will continue to enhance the competitiveness of its markets, whilst maintaining their quality, resilience and attractiveness as a leading global financial centre.”

Since the new rules were introduced, and as at 31 March 2021, 146 New Economy companies have listed in Hong Kong, raising a total of HK$682.2 billion, and accounting for 61% of IPO funds raised in Hong Kong. Among these listings, 31 pre-revenue biotech companies listed under Chapter 18A, raising a total of HK$82.1 billion. HKEX also welcomed 13 “homecoming” secondary listings under Chapter 19C in the same period, raising a total of HK$285.8 billion.

New Economy listings reshape the Hong Kong market

• New Economy listings continue to gain momentum. Funds raised by New Economy IPOs represented 64% of total IPO fundraising in 2020, compared with 49% in both 2018 and 2019.
• In 2020, 51 of the total 154 IPOs were New Economy companies, raising HK$257.4 billion, accounting for 64% of IPO funds raised in Hong Kong market.
• Momentum continues: In the first quarter of 2021, HKEX welcomed 18 New Economy companies to our markets, raising HK$129.2 billion and accounting for 95% of IPO funds raised in Hong Kong.
• As at 31 March 2021, the total market capitalisation of New Economy companies listed on HKEX since the new listing regime took effect reached HK$14,447.1 billion, accounting for 27% of Hong Kong’s total market capitalisation.
• New Economy issuers have attracted interest from all investor groups: New Economy companies listed since the new Listing Rules took effect contributed 21% of turnover in the cash equities market in 2020, up from just 1% in 2018.

2017 – 2021 Hong Kong IPO Market Composition

Thriving healthcare and biotech sector

Healthcare and biotechnology has become one of the fastest growing sectors in the Hong Kong IPO market, with a robust and well-developed ecosystem of diversified issuers and a broadening product suite.

• As at 31 March 2021, HKEX had welcomed 63 new healthcare and biotech listings over the past three years, raising HK$196.9 billion.
• Chapter 18A opened doors for pre-revenue biotech companies to access international capital and investors: HKEX attracted 31 pre-revenue biotech listings under Chapter 18A, raising a total of HK$82.1 billion, accounting for 7% of IPO funds raised in Hong Kong during the period.
• From 2017 to 2020, the healthcare sector saw compound annual growth rate (CAGR) of 49% in terms of number of IPOs, 135% in IPO funds raised, and 61% CAGR in total market capitalisation.
• Issuers are more diversified in terms of healthcare subsector, including Medical Services (hospital/clinic), CXO (CRO/CDMO/CMO), Pharmaceuticals, Medical Device and Digital Healthcare companies.
• Pipeline remains robust, with 23 additional healthcare and biotech companies having submitted IPO applications as at 12 April 2021, including 12 pre-revenue biotech companies pursuing a Chapter 18A listing.

IPO fund raised by 18A companies

Subsectors of healthcare listings since the launch of 18A

(The percentage represents the fund raised by healthcare listings)

*CRO: contract research organisations; CDMO: contract development and manufacturing organisation; CMO: contract manufacturing organisation

Background information

The New Listing Regime

• Took effect on April 30, 2018
• 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 requirements;
• Chapter 19C – establishing a new concessionary secondary listing route for Greater China and international companies that wish to secondary list in Hong Kong.

For more information on our IPO market, please read our latest newsletters - IPO Express and HKEX in Biotech.