Chinese Biotechs Flock to Hong Kong IPOs for Next Growth Phase

Listing Reforms and Growth:
Chinese biotechs are increasingly pursuing Hong Kong IPOs, driven by listing reforms and the need for capital to fuel their next stage of growth13.

Wuxi Biologics' Spin-Off:
Wuxi Biologics, China’s largest biologic drugs services company, plans to spin off its international business, Wuxi XDC, in a Hong Kong IPO to raise capital for new manufacturing facilities and expanding production capacity1.

Hong Kong IPO Activity:
Hong Kong IPO activity rebounded in 2024, with 64 IPOs raising over HK$83.4 billion, indicating a positive market sentiment and improved liquidity2.

Biotech Listings:
The Hong Kong Stock Exchange (HKEX) has seen a surge in biotech listings, particularly from P.R.C.-based companies, due to its 18A process and the region's growing innovation hub status35.

Market Trends:
The biotech sector is experiencing a global upturn, with Hong Kong benefiting from its gateway position between the mainland and the global healthcare market3.

Regulatory Support:
The HKEX’s 2018 listing reforms have been instrumental in opening the market to emerging and innovative companies, including biotechs, by providing specific criteria for listing pre-revenue biotech companies35.

Investor Interest:
Cornerstone investors with Chinese state backgrounds are increasingly investing in Hong Kong IPOs, particularly in the technology and biotechnology sectors2.

Future Prospects:
Hong Kong's IPO activity is expected to continue its rebound in 2025, potentially reclaiming a leading position globally, with large mainland enterprises and industry leaders driving the growth2.

Sources:

1. https://www.scmp.com/business/banking-finance/article/3227127/chinese-pharma-tech-giant-wuxi-biologics-plans-spin-international-business-hong-kong-ipo

2. https://www.ey.com/en_cn/newsroom/2024/12/a-share-ipo-activity-underwent-a-slowdown-pace-of-expected-to-improve-in-2025

3. https://goodlifesci.sidley.com/2024/06/03/hong-kongs-biotech-listings-emerge-from-two-year-downturn-with-18as-booming/

5. https://www.skadden.com/-/media/files/publications/2022/06/2021-report-of-hong-kong-listed-biotech-companies/hong-kong-biotech-survey-en.pdf