Shanghai tech board unlikely to challenge Hong Kong’s status as preferred IPO hub for Chinese biotech firms
- Investment bankers say US-China trade war may dampen valuations of biotech firm IPOs in Hong Kong, but overall numbers likely to remain intact
- While Chinese biotech companies are likely to opt for Hong Kong, advanced medical equipment makers may prefer new Shanghai board
Volatile stock markets as a result of the unresolved US-China trade war will affect the valuations of Chinese biotech IPOs, but Hong Kong’s status as an IPO hub will remain undiminished and compete strongly with the upcoming tech board in Shanghai, say investment bankers.
“The funds available here and in China are incredibly deep, I anticipate that this market should hold as it goes through the ups and downs,” said Philip Ross, JPMorgan’s vice-chairman of investment banking with a focus on health care. “It may temper valuations but I don’t think it will prevent companies from going public.”
He expects at least 10 Chinese biotech firms to go public in Hong Kong or Shanghai’s new Science and Technology Innovation board in the coming 12 to 18 months.
Listing reform by bourse operator Hong Kong Exchanges & Clearing (HKEX) has allowed biotech start-ups without profit or even revenue to go public in the city since late April last year.
Rule changes in Shanghai will also see the first batch of initial public offerings of pre-profit companies in semiconductors, biotech, artificial intelligence and advanced manufacturing sectors, on the new Science and Technology Innovation board this month.