AI biotech firm in first listing under Chapter 18C
Mainland artificial intelligence drug research firm QuantumPharm on Tuesday said it plans to raise up to HK$1.13 billion in a Hong Kong initial public offering (IPO), as it becomes the first company to take advantage of a new rule designed to entice technology firms to list in the SAR. The Tencent-backed firm, also known as XtalPi, is offering 187.37 million shares, 95 percent of which will be issued internationally and five percent of which will be issued in the SAR. The price range of the shares will be between HK$5.03 and HK$6.03, with an “entry fee” of HK$6,091. Trading will begin on June 13. The listing is under the Chapter 18C rule introduced by Hong Kong Exchanges and Clearing in March last year, which makes it easier for specialist technology firms to list in the city. Companies with a valuation of at least HK$10 billion are allowed to sell shares in IPOs even if they are yet to generate revenue. For firms that have generated revenue, the valuation threshold is reduced to HK$6 billion if they had at least HK$250 million in sales in the financial year prior to their IPO.  At a press briefing, the firm’s chairman, Wen Shuhao, said the introduction of Chapter 18C shows the city’s capital markets value the technology sector. The company plans to bring in eight cornerstone investors with a combined contribution of nearly HK$338 million to subscribe for the shares, including Peter Lee, the chairman of Henderson Land Development. Ronald Tam, QuantumPharm's chief financial officer, said he believes the Shenzhen-headquartered firm will be able to generate profits in the near term, despite seeing losses over the past three financial years. The Chapter 18C rule applies to applicants in high-tech, advanced hardware and software, new materials, new energy, as well as food and agriculture technologies. The only other firm which has applied to list under the rule so far is Black Sesame International Holding, which produces chips for autonomous driving.