Significant effects of the Hong Kong Stock Exchange's biotechnology listing reform: 86 companies have already been listed through Chapter 18A with a total market capitalization exceeding $185 billion.

The Hong Kong Stock Exchange released an article titled "The Rise of Hong Kong's Biotech Diverse Asset Ecosystem" on May 12th. It mentioned that in 2018, the Hong Kong market launched a listing reform for biotech companies. In April 2018, Chapter 18A was added to the Listing Rules, providing a listing channel for biotech innovation enterprises focused on research and development and without revenue to access the Hong Kong public capital market. Since the new rules came into effect, 86 biotech companies have been listed through this system, raising a total of over 17.8 billion US dollars. As of April 16, 2026, the combined market value of these companies exceeded 185 billion US dollars. The Hong Kong Stock Exchange stated that Chapter 18A and subsequent Chapter 18C (Specialized Technology Listing Chapter) provide more flexible listing paths for biotech companies at different stages of development, promoting biotech to become a major sector in the Hong Kong market. To date, this sector has generated multiple indexes, ETFs, and derivative products, boosting secondary market liquidity and attracting a broader range of investors. More diversified issuers When a sector has a broad enough coverage to support different investment and risk management needs, market participation tends to increase. As of April 2026, there are over 276 biotech and healthcare related companies listed on HKEX, with a total market value exceeding 5 trillion Hong Kong dollars. The issuers are no longer limited to early-stage therapeutic research and development companies but also include late-stage drug development companies, platform technology companies, AI research companies, and biopharmaceutical manufacturers. The maturity of the sector is also reflected in the index level. Companies that listed under Chapter 18A without revenue in the past have made significant progress. Currently, only 5% of the companies in the Hang Seng Biotech Index are without revenue, while 95% have achieved commercialization, showing the gradual evolution of this sector and its ability to support the development of benchmark indices, ETFs, and derivative products more effectively. Chinese biotech companies going global As the Chinese biotech ecosystem undergoes structural changes and companies' research directions and business models become more diverse, more types of biotech companies are stepping onto the path to listing. At the same time, with the enhancement of the technological capabilities of Chinese biotech companies, more and more companies are accelerating international market expansion through external licensing and cross-border cooperation. According to NextPharma data, the total value of outbound licensing transactions for Chinese innovative drugs reached 136 billion US dollars in 2025. According to a Nature Biotechnology analysis, six out of the top ten research and development licensing agreements involved Chinese companies, including the largest deal within the year. In addition, from early 2026 to February 15, there were a total of 39 outbound licensing transactions involving Chinese companies, with a total transaction value exceeding 49 billion US dollars, accounting for over 30% of the total outbound licensing transactions in 2025. Playing an important role in the global biotech research and development industry chain The issuer group in the Hong Kong biotech ecosystem covers a wide range of industries and is becoming more diversified and cutting-edge, encompassing not only core therapeutic areas but also various segments of the biotech industry chain. Currently, there is a group of infrastructure and platform service providers, including biopharmaceutical contract manufacturing, viral vector and plasmid production, preclinical research, and cell and gene therapy manufacturing. Some of these companies play a critical role in the global biotech industry chain, with their revenue mainly coming from service provision rather than depending on the results of a single clinical trial project. As Chinese biotech companies accelerate asset licensing cooperation with international pharmaceutical companies, the demand for international standards in research and development and production facilities continues to rise. Several of the listed issuers in Hong Kong operate in relevant fields of infrastructure and service provision, which helps respond to this demand. Intersection of digital technology and biotech Some platform service providers offer digital platform services rather than physical facilities. In recent years, many AI-driven platform companies have been listed, further enriching the Hong Kong biotech ecosystem and introducing business models with different revenue expectations and risk characteristics, supporting index compilation and promoting product diversification. Disclosure of biotech listings The information disclosure in the Hong Kong market is more comprehensive and transparent, and an increasing number of international pharmaceutical companies refer to publicly available market information when selecting partners to evaluate the disclosed product pipeline and research data. Opportunities brought by biotech ETFs Biotech ETFs provide investors with a more convenient way to participate widely in the biotech sector while diversifying individual stock investment risks. With investors' significantly increased interest in biotech ETFs, the asset under management of biotech ETFs listed on the Hong Kong market surged from 1.5 billion Hong Kong dollars in March 2021 to 12 billion Hong Kong dollars by the end of March 2026. Over the past five years, the trading volume of these ETFs has also increased from 143 million Hong Kong dollars to 1.97 billion Hong Kong dollars. This growth not only reflects the increase in product supply but also benefits from favorable market conditions. Biotech ETFs not only help broaden investment channels and support diversified allocations but also have strategic significance in driving market development. They help consolidate the funds related to benchmark indices in the market, enhance the overall liquidity of the relevant sectors, and lay the foundation for further product innovation in the future. Further enrichment of product types through futures Futures contracts are an important part of the Hong Kong product ecosystem. The launch of the Hang Seng Biotech Index Futures on November 28, 2025, marked further development in the Hong Kong biotech listing sector, extending the ecosystem from the spot market to a broader range of derivative products, providing more risk management and price reference tools for the market. HKEX data shows that on March 27, 2026, trading volume for Hang Seng Biotech Index Futures hit a new high of 1239 contracts, reflecting a continuous increase in market participants' demand for biotech sector investment and risk management tools. The ideal place for investing in biotech In the R&D pipeline of many listed companies in Hong Kong lies the technology that could determine the direction of medical development in the next decade. Through the Hong Kong market, these innovations are open, comparable, and tradable. Starting from the initial biotech company listing mechanism, we have gradually built a diverse asset biotech market that can facilitate capital raising, secondary trading, and risk management. As the biotech industry goes global and accelerates its development, HKEX has become the ideal place for investing in innovation.