London Daily

Focus on the big picture.
Wednesday, Sep 17, 2025

Shanghai and Shenzhen stock markets are shaping up as viable rivals to Hong Kong in the race for the biotech IPO crown

Shanghai and Shenzhen stock markets are shaping up as viable rivals to Hong Kong in the race for the biotech IPO crown

Sixteen pre-profit biotech firms have raised a combined US$4.5 billion in Hong Kong since April 2018, compared with two listings on Nasdaq that raised US$264 million in the same period. Last year, Shanghai’s regulators allowed drug developers that have yet to earn a revenue or profit to raise funds on the Star market, followed recently by a similar green light on the ChiNext market in Shenzhen
Shanghai and Shenzhen are shaping up as viable destinations for biotech researchers to raise capital, after they drafted or enacted new rules that match Hong Kong’s overture to pre-revenue pharmaceutical and health care start-ups, bankers said.

Last year, Shanghai’s financial regulators allowed drug developers that have yet to earn a revenue or profit to raise funds via initial public offerings (IPOs) on the Science and Technology Innovation Market (Star), followed recently by a similar green light on the ChiNext stock market in Shenzhen. The changes on the two bourses match Hong Kong’s April 2018 listing rule reform, which propelled the local stock exchange to become the world’s second-largest market for biotech IPOs after New York.

“Hong Kong is still positioned as the number one IPO destination for leading Chinese biotech companies, especially those seeking overseas listings, thanks to its mature and stable legal system and abundant international capital,” said Tang Jing, who helps Chinese biotech companies raise capital and pick IPO venues as vice-president of the health care and life science investment banking team at China Renaissance. “However, we saw a change in the dynamics last year, which is speeding up this year due to rapid policy moves.”

The changes afoot reflect the competition between the three stock exchanges – Hong Kong, Shanghai and Shenzhen – to claim the crown as the go-to destination for Chinese companies. Hong Kong, with US$4.99 trillion in capitalisation as of May 15, is the biggest stand-alone stock market of the three, based on Bloomberg data, surpassing Shanghai’s US$4.94 trillion and Shenzhen’s US$1.07 trillion.

A raft of regulatory differences divide the three markets, not least China’s capital control that constrain IPOs in Shanghai and Shenzhen to raising capital denominated in renminbi. On top of the currency limitation, China’s financial regulators typically require IPO applicants to show several years of profit, while the process of approving stock sales are often subject to capricious policy shifts that may leave companies in the queue for years.

“Yuan funds raised in mainland markets can’t be readily converted into foreign currencies, making it more difficult for companies to finance overseas projects with the proceeds,” giving Hong Kong an advantage, said Samuel Ng, a partner at the international law firm Paul Hastings, who advises listing candidates.

For companies that want to tap global investors, Hong Kong has become the preferred destination, which explains why 16 pre-profit biotech companies have listed since April 2018, raising a combined US$4.5 billion. By comparison, two pre-profit drug developers listed on Nasdaq over the same period, raising US$264 million, according to Refinitiv.

Shanghai’s overture to pre-revenue start-ups have attracted two listing since mid-2019, with US$574 million raised. They add to 13 profitable pharmaceutical companies and research teams in diagnostics, medical devices and development services on the Star market. Together the 15 firms raised US$2.3 billion in capital.

ChiNext’s proposed rules – under market consultation – would open the door for unprofitable firms to list, provided they have at least 300 million yuan in sales in the latest financial year and attain a market value of at least 5 billion yuan when listed.

“The registration-based system to be adopted by ChiNext will provide another exit option for shareholders of biotech companies in China, beyond Hong Kong, New York and Shanghai,” Tang said.

Under Star’s rules, drug developers without profit or revenue are allowed to list, if they have at least one drug candidate with promising market potential – on which phase-two clinical trials have started – and a market value of over 4 billion yuan upon listing.

In Hong Kong, the biotech listing regime let drug and medical device developers with no revenue or profit to go public if they meet requirements including a market value of at least HK$1.5 billion upon listing and at least one drug candidate having regulators’ consent to start phase two trials.

Bucking the global stock market slump, InnoCare Pharma and Akeso saw their over HK$2 billion IPOs “very significantly oversubscribed” by institutional investors, while retail investors committed funds to buy 299 and 639 times the shares available respectively.

Tang attributed the boom to a perception of the health care sector’s defensiveness, its long term growth potential in China, as well as the limited number of quality biotech firms listed in Hong Kong.

Houston Huang Guobin, JP Morgan’s head of global investment banking for China, said the China biotech IPO deals pipeline is “very strong”, especially in Hong Kong. However, he cautioned retail investors to maintain a disciplined approach.

“There will always be people, having made money on their first biotech IPO, would assume they can repeat that in the second one,” he said. “Careful company analysis should be done every time, as not every company is the same.”

To be sure, IPOs are not zero-sum games, as companies with global ambitions may choose to list in multiple markets, said Christian Hogg, CEO of the novel drugs developer Hutchison China Meditech, or Chi-Med, whose shares are traded in London and New York. Chi-Med, headquartered in Hong Kong and a unit of tycoon Li Ka-shing’s CK Hutchison, operates mainly in mainland China.

“I don’t believe it is all about who’s going to win,” Hogg said, adding that at some point a Hong Kong listing may make sense to Chi-Med. “It is about building a multi-pillar equity capital market ecosystem that can feed the necessary capital into the industry to enable new drugs to be brought to China and beyond.”
Newsletter

Related Articles

0:00
0:00
Close
Hong Kong Industry Group Calls for HK$20 Billion Support Fund to Ease Property Market Stress
Joe Biden’s Post-Presidency Speaking Fees Face Weak Demand amid Corporate Reluctance
Charlie Kirk's murder will break the left's hateful cancel tactics
Kash Patel erupts at ‘buffoon’ Sen. Adam Schiff over Russiagate: ‘You are the biggest fraud’
Homeland Security says Emmy speech ‘fanning the flames of hatred’ after Einbinder’s ‘F— ICE’ remark
Charlie Kirk’s Alleged Assassin Tyler Robinson Faces Death Penalty as Charges Formally Announced
Actor, director, environmentalist Robert Redford dies at 89
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
JD Vance Says There Is “No Unity” with Those Who Celebrate Charlie Kirk’s Killing, and he is right!
Trump sues the 'New York Times' for an astronomical sum of 15 billion dollars
Florida Hospital Welcomes Its Largest-Ever Baby: Annan, Nearly Fourteen Pounds at Birth
U.S. and Britain Poised to Finalize Over $10 Billion in High-Tech, Nuclear and Defense Deals During Trump State Visit
China Finds Nvidia Violated Antitrust Laws in Mellanox Deal, Deepens Trade Tensions with US
US Air Force Begins Modifications on Qatar-Donated Jet Amid Plans to Use It as Air Force One
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
Elon Musk Retakes Lead as World’s Richest After Brief Ellison Surge
U.S. and China Agree on Framework to Shift TikTok to American Ownership
London Daily Podcast: London Massive Pro Democracy Rally, Musk Support, UK Economic Data and Premier League Results Mark Eventful Weekend
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Musk calls for new UK government at huge pro-democracy rally in London, but Britons have been brainwashed to obey instead of fighting for their human rights
Elon Musk responds to post calling for the murder of Erika Kirk, widow of Charlie Kirk: 'Either we fight back or they will kill us'
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
USA: Office Depot Employees Refused to Print Poster in Memory of Charlie Kirk – and Were Fired
Proposed U.S. Bill Would Allow Civil Suits Against Judges Who Release Repeat Violent Offenders
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
French Debt Downgrade Piles Pressure on Macron’s New Prime Minister
US and UK Near Tech, Nuclear and Whisky Deals Ahead of Trump Trip
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
Anesthesiologist Left Operation Mid-Surgery to Have Sex with Nurse
Tens of Thousands of Young Chinese Get Up Every Morning and Go to Work Where They Do Nothing
The New Life of Novak Djokovic
The German Owner of Politico Mathias Döpfner Eyes Further U.S. Media Expansion After Axel Springer Restructuring
Suspect Arrested: Utah Man in Custody for Charlie Kirk’s Fatal Shooting
In a politically motivated trial: Bolsonaro Sentenced to 27 Years for Plotting Coup After 2022 Defeat
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
ChatGPT CEO signals policy to alert authorities over suicidal youth after teen’s death
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
×