QuantumPharm IPO oversubscribed ‘by 10 times’ as retail investors pile in to Hong Kong’s first pre-revenue tech regime listing

QuantumPharm’s is the first IPO under Chapter 18C, which allows firms worth at least HK$10 billion to sell shares even if they have yet to earn a single dollar

Several brokerages said they received a strong response, with some expecting the retail tranches to be oversubscribed by about 10 times on day one

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It is the first IPO under Chapter 18C, which allows firms worth at least HK$10 billion to sell shares even if they have yet to earn a single dollar. Photo: Jonathan Wong

Published: 5:59pm, 4 Jun 2024Updated: 6:02pm, 4 Jun 2024

Retail investors have rushed to subscribe to Tencent-backed artificial intelligence (AI) drug researcher QuantumPharm on the first day of its HK$1.13 billion (US$144.5 million) initial public offering, encouraged to bet on the technology start-up by recent market rallies and listing reforms.

Several large local brokerages told the Post they have received a strong response from investors, with some expecting the retail tranches to be oversubscribed by about 10 times on day one. Futu Securities estimated total first-day margin lending reached HK$520 million, including HK$321 million worth of subscriptions it received.

Phillip Securities (Hong Kong), a brokerage active in the IPO market, received HK$100 million from its margin-lending clients on Tuesday, while TradeGo Markets pulled in HK$84.6 million.

Bright Smart Securities, the biggest local broker to offer margin financing for IPOs, also received a good response but did not disclose the number.

It is the first IPO under Chapter 18C, a new regime for pre-revenue specialist technology firms introduced more than a year ago. Chapter 18C allows companies worth at least HK$10 billion to sell IPO shares even if they have yet to earn a single dollar in sales.

QuantumPharm, also known as XtalPi, is based in Shenzhen city, Guangdong province. Photo: SCMP Handout

“The performance of recent IPOs may help drum up interest in the new offerings,” said Louis Wong, executive director of Phillip Capital Management (Hong Kong). “The subscription will be higher at the end of the week as today is only the first day of the IPO.