Hong Kong biotech: attempting take-off

Author: Karry Lai | Published: 26 Feb 2019

Hong Kong regulators are keen to attract IPO-ready biotech companies, but investor protection measures need to improve

Since Hong Kong launched its new listings regimes for companies with weighted voting rights and pre-revenue biotech firms in 2018, a number of Chinese companies have made it their venue of choice for an initial public offering (IPO). But stock prices have not performed well.

Observers believe that Hong Kong has room to improve when it comes to the valuation of new economy companies, which is damaging performance in the secondary market. Valuations have been too high, according to some market participants.

While it's important for Hong Kong to remain an attractive environment for companies to list in the jurisdiction, market participants fear that comes at the price of waning regulatory standards.

For instance, the jurisdiction has a high proportion of retail investors – higher than that in the US – yet no...