Chapter 8 vs Chapter 18A: Choosing the Right Listing Track

The Hong Kong Listing Rules provide multiple tracks to a public listing, and the choice between Chapter 8 (the standard route for companies meeting profitability requirements) and Chapter 18A (the route for pre-revenue biotech companies) is the most consequential threshold decision an issuer will make. Chapter 8 requires the issuer to meet one of three financial tests: the profit test (HK$50 million profit in the most recent year, with at least HK$80 million over the preceding two years), the market cap/revenue test (market capitalisation of at least HK$4 billion with revenue of at least HK$500 million), or the market cap/revenue/cash flow test (market cap of at least HK$2 billion, revenue of at least HK$500 million, and positive cash flow of at least HK$100 million). Chapter 18A was introduced in 2018 as a direct response to Hong Kong’s competitive position versus Nasdaq for biotech listings. It allows pre-revenue biotech companies to list provided they have a market capitalisation of at least HK$1.5 billion at the time of listing. The trade-off is that Chapter 18A issuers face enhanced post-listing obligations, including a requirement to add the marker ‘B’ to their stock code to indicate pre-revenue status, and a 12-month forward funding requirement demonstrating sufficient working capital.