Confidential filing may draw more dual listings, biotech IPOs

Tech listings may come from China, Singapore, Malaysia, and the Middle East.

A measure allowing confidential filing is expected to bring a wave of overseas-listed companies and early-stage biotech and tech firms to Hong Kong, boosting the local listing momentum with more than $76b already raised as of 25 May.

The figure is more than seven times higher than a year ago and nearing 90% of last year’s total, Financial Secretary Paul Chan Mo-po said in a blog post.

Confidential filing rules that started on 6 May could help protect proprietary data for growing specialist tech and biotech firms and price-sensitive details for mature companies seeking dual listings, PwC Hong Kong Capital Markets Leader Eddie Wong said.

“This dual protection is particularly valuable for R&D-intensive firms where premature disclosure of technical or clinical trial data could compromise competitive advantage or market valuation,” he told Hong Kong Business via email.

Hong Kong had 17 IPOs worth $18.7b in the first quarter — almost four times more than a year earlier and before the confidential filing took effect — according to data from the Hong Kong Exchanges and Clearing Ltd.

On May 20, Chinese electric vehicle battery maker Contemporary Amperex Technology Co. Ltd. debuted in Hong Kong, raising $36.1b (US$4.6b) in the world's biggest IPO this year.

Chris Ma, a partner at Simmons & Simmons, said confidential filing is "likely the most compelling feature” of Hong Kong’s Technology Enterprises Channel (TECH), which seeks to streamline the listing process for specialist technology and biotechnology companies on the main board of the Hong Kong Stock Exchange.

“It directly addresses concerns about premature disclosure of sensitive operational strategies and proprietary technologies, which is particularly crucial for early-stage companies,” he said in a separate email.

“Avoiding premature disclosure could minimise unnecessary public attention during the listing process, which also helps companies maintain competitive advantages while building stronger pre-initial public offering (IPO) investor relationships,” he added.

Adrian Lo, head of Ipsos Strategy3, expects most tech and biotech listings to come from Mainland China, the Greater Bay Area, Southeast Asia especially Singapore and Malaysia, and the Middle East. He also sees listings from Chinese companies based overseas.

He said mainland companies like Contemporary Amperex Technology Co. Ltd., which is planning a $39.2b (US$5b) Hong Kong IPO, are driven by US delisting threats and investment restrictions, and are likely to take advantage of Hong Kong’s streamlined process, confidential filing, and weighted voting rights.

‘Greater share’

“ASEAN and Middle Eastern tech and healthcare firms are targeted for their interest in Asian capital markets and overseas Chinese companies face regulatory pressures abroad, [but] evidence for these markets is less definitive,” Lo told Hong Kong Business via email.

He expects Hong Kong to “capture a greater share of global specialty listings” with the enterprise channel.

Diamantina Leong, a capital market service partner at PwC Hong Kong, said it would “catalyse listings across several high-growth industries,” including biotechnology, pharmaceuticals, artificial intelligence, information technology, and telecommunications.

“Across all these industries, the channel’s pre-IPO consultation service reduces regulatory uncertainty, a critical factor for R&D-driven businesses with complex valuation propositions,” she told Hong Kong Business via email.

She said the channel’s structured framework provides clear guidance on approval timelines and regulatory expectations, allowing listing applicants to optimise their capital and operational expenditure throughout the listing process.

“This is particularly valuable given Hong Kong's six-month financial statement validity rule, which imposes a strict window for IPO completion before requiring updated financial information disclosures,” Leong added.

Hong Kong’s updated listing process requires regulators to complete reviews within 40 business days. Companies have 60 business days to respond, in line with the six-month financial disclosure rule.

Attracting tech and healthcare firms is crucial, Ma said, as they increasingly lead IPO activity in major markets.

“Attracting high-tech and biotech listings serves to further strengthen Hong Kong's position as a leading listing hub for innovative companies, while adding diversity beyond traditional sectors like finance and real estate,” he added.

In the US, the healthcare and tech sectors accounted for half of all deals in the first quarter, according to Ernst & Young Global Ltd.

Wong said new economy listings, including high-tech and biotech, accounted for 53% of Hong Kong’s IPO activity last year. “[This] reflects the market's strategic focus on next-generation industries.”