Pre-profit biotech companies are amongst those who will benefit from the expansion.

Biotechnology companies with no track record of profitability and emerging companies with weighted voting rights (WVR) structures may soon be allowed to list under the Main Board as the Hong Kong Exchanges & Clearing Ltd. moves to expand its listing regime in a bid to stay competitive and attract more blockbuster listings, according to a press release.

Under the proposed expansion to the Main Board Listing rules, pre-revenue biotech companies would be required to have a minimum expected market capitalisation of $1.5 billion.

The biotech sector was chosen as initial focus in widening market access as they make up a majority of companies in the pre-revenue stage seeking a Main Board listing and activities like clinical trials tend to be highly regulated under the current regime that sets external milestones on development progress. 

Companies with WVR structures would be required to have a minimum market cap of $10b and, if below $50b market cap, would need to meet a higher revenue test of $1b in the full financial year before listing.

The proposed expansion also covers secondary listing from companies primarily listed in New York Stock Exchange and the premium listing segment of the London Stock Exchange’s Main Market. 

“By the second half of next year, we hope that we will see a significant number of innovative companies beginning to choose Hong Kong, making the Hong Kong market a relevant and even more competitive place,” said HKEX Chief Executive Charles Li.