Mainly from China's biotech and pharmaceutical fields, ten companies from the Healthcare industry went public on the Hong Kong Stock Exchange (HKEX) during the first half of 2019, in a move to get an advantage of the updated favourable policies for the listing of biotech companies at the Hong Kong bourse.
The listing regulation update was not only for the companies from the healthcare industry but also for several others.
Having less stringent requirements created an overall hype in HKSE during the year 2018. The IPO issuing volume at HKSE has surged threefolds.
More than HKD 286 billion (the equivalent of around USD 36 billion) were raised on the HKSE during the year 2018, making Hong Kong the leader stock exchange worldwide in 2018, based on the IPO capital raised. Hong Kong was followed by the New York Stock Exchange (NYSE), Japan Exchange Group and NASDAQ by around USD 28, 25 and 24 billion respectively.
In 2018, HK saw giant Chinese companies raised billions on their IPO. PingAn Healthcare and Technology, WuXi Apptec and BeiGene were amongst the biggest winners of the IPO rush of 2018 in the Hong Kong Stock Exchange.
In the first half of 2019, ten companies from the healthcare industry went public on the Hong Kong Stock Exchange.
Some of those companies were profitable and prolific firms, some were not.
The biggest one amongst them, Hansoh Pharmaceutical has raised over USD 1 billion, making one of the major fundraisings amongst, the company engages in the research and development, manufacture, marketing, and sale of pharmaceuticals and active pharmaceutical ingredients. In 2018, the pharma giant has an annual revenue of more than CNY 5 billion and an annual profit of more than CNY 1 billion and has steadily been increasing.
Frontage Holdings, is a Contract Research Institute (CRO), providing laboratory and related services in the United States and China. In 2018, it has generated around CNY 570 millions of revenue. Taking advantage of the policy incentives, China's CRO market has reached CNY 68 billion in 2018 and has steadily been growing.
CanSino Biologics is among the ones that have taken advantage of the new policies in HSKE, and its revenues would not satisfy the listing rules of HKSE if the rules have not been revised. The company is focused on developing, manufacturing, and commercializing vaccines in the Chinese market, and its balance of sheet is not as splendid as Frontage Holdings or Hansoh Pharmaceutical. However, there is an optimistic vibe within the industry on the pharmaceutical industry's near future in China, due to the expected revisions in government subsidies.
After China's latest initiative launching the Science and Technology Innovation Board (STIB), aka China's Nasdaq, stock exchanges become more competitive, as well. Light standards at the STAR market would presumably shape the entire atmosphere around Asia.
HKSE's latest revisions may not have yet yield expected results yet, and the competition atmosphere will likely to be fiercer in the near future.