Hong Kong allowing listing applicants more privacy sparks wave of confidential filings
The Hong Kong exchange's rule for US-style confidential filings, which allows certain companies to keep their business plans and financials under wraps in the initial stages of their stock market debut process, was implemented in May.
Chinese companies, including autonomous driving firm Zelos Tech and artificial intelligence (AI) startup MiniMax, have filed confidentially in recent months to get themselves listed in the city, according to separate sources.
Most filings followed the launch of the Technology Enterprises Channel (TECH) in May, allowing certain niche biotech and technology firms, including AI companies, to apply privately.
Confidential filings appeal to sectors such as AI and semiconductors that are deemed sensitive due to heightened macroeconomic and geopolitical risks, advisers say. The mechanism allows firms to navigate the regulatory review process without public disclosure, offering flexibility when IPO timelines are uncertain, according to several senior bankers at global and Chinese investment banks.
Previously, without getting exemptions from the Hong Kong exchange, only firms already listed on another major overseas bourse could lodge draft prospectuses confidentially ahead of launching a share sale in the Asian financial hub.
BT in your inbox
Start and end each day with the latest news stories and analyses delivered straight to your inbox.
Sign Up
Sign Up
The new filing mechanism is set to bolster Hong Kong as a preferred fundraising venue mainly for Chinese companies amid fierce competition with other major listing venues, notably New York, where confidential filings have been allowed for years.
A record number of Chinese companies are seeking a US listing this year, braving volatile Sino-US relations and US calls for strict oversight of Chinese firms, Reuters reported last week.
Still, Hong Kong has been propelled by the influx of Chinese companies to the global top spot by listing volume of initial and second listings so far this year, overtaking its biggest rival, New York Stock Exchange, according to data from LSEG.
The listing momentum is set to continue with more than 190 listing applications – approximately 45 per cent in technology and 20 per cent in healthcare, according to the exchange operator Hong Kong Exchanges and Clearing Ltd (HKEX).
US-listed robotaxi companies Pony AI and WeRide have also submitted confidential filings for their second listings in Hong Kong earlier this year, two sources with knowledge of the matter said.
The sources declined to be named as they were not authorised to speak to the media.
MiniMax, Pony AI and WeRide declined to comment. Zelos did not respond to Reuters' request for comment.
HKEX declined to comment for this story or on the total number of confidential applications.
Other companies not covered under the newly-launched TECH initiative can request a waiver from the Hong Kong exchange to keep their listing applications private, according to capital markets bankers and lawyers.
Fast-fashion retailer Shein, for example, lodged its filing for a Hong Kong IPO confidentially last month, in the most high-profile such case so far, according to two separate sources with direct knowledge of the matter. Shein did not respond to a request for comment.
Confidential filings are advantageous in the innovation-driven economy.
Biotech companies are particularly cautious about releasing information on their projects and research and development plans due to intense competition in the sector, according to Jean Thio, a Clifford Chance capital markets partner.
'These companies have valuable IP that's being developed and they're trying to monetise that,' Thio said.
'If you were to put all that information out at such an early stage, there are worries that you could be leaking confidential trade secrets which your competitors could use against you.'
A typical IPO process in Hong Kong generally takes at least six months from filing preliminary documents to launching the book, bankers and lawyers said. 'The market just shifts overnight with geopolitical or just tariff news. No one wants to be in the headline of an IPO flop after they file,' said a Chinese company executive who held discussions about filing confidentially for a Hong Kong IPO. REUTERS
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
3 hours ago
- Business Times
China Aviation Oil H1 profit rises 18.4% to US$50 million on higher gross profit and associates' share of results
[SINGAPORE] Asia-Pacific's largest physical jet fuel buyer China Aviation Oil (CAO) posted a net profit of US$50 million for the first half of its financial year ended Jun 30. This was an 18.4 per cent year-on-year increase from US$42.3 million. The growth was attributed to increases in gross profit and share of results from associates, the Singapore Exchange-listed group said on Thursday (Aug 14). Earnings per share jumped 18.1 per cent to US$0.0582 from US$0.0493 previously for the company, which is a key supplier of imported jet fuel to China. CAO attributed the rise in business volume to higher trading volumes of crude and fuel oils. The increase in jet fuel supply volume and optimisation gains from trading activities thus led to a jump in revenue and gross profit. Gross profit was US$30.4 million, a 25.7 per cent increase from US$24.2 million recorded in the same period the previous year. Revenue rose 13.6 per cent to US$8.6 billion, from US$7.5 billion in the first half of 2024, underscored by a 'strong uptick' in demand. Total supply and trading volume went up 35.4 per cent to 13.8 million tonnes in H1 FY2025 from 10.2 million tonnes previously. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The share of results from CAO's associates rose 18.6 per cent to US$27.4 million. This was largely down to higher refuelling volumes from the sole supplier of jet fuel at Shanghai Pudong International Airport (leading to a 13.9 per cent increase in contributions to US$25.5 million), and higher contributions from petroleum complex logistics terminal company Oilhub Korea Yeosu. The volume of middle distillates for H1 grew 18.7 per cent to 7.4 million tonnes from 6.2 million tonnes, while the trading volume of other oil products rose to 6.4 million tonnes, from 4 million tonnes in the same period the previous year. This was due to higher trading volumes of fuel and crude oils. CAO also stated that it has zero net-interest-bearing debt. Outlook CAO chief executive Lin Yi said his company is 'cautiously optimistic' about its medium-term outlook. The company pointed out the International Air Transport Association forecast that the total operating profits for the global civil aviation industry are set to grow 6.6 per cent to US$66 billion this year. It added that relaxed visa requirements across countries in the Asia-Pacific mean that the region is expected to account for 52 per cent of the global aviation industry's revenue passenger kilometre increase. China is set to be a 'significant contributor', accounting for more than 40 per cent of the region's aviation traffic, said CAO. 'CAO remains confident about the aviation industry's trajectory amidst a dynamic global landscape,' said Lin, referring to the geopolitical instability, trade tensions and supply-chain disruptions that were seen in the first half of the year. He added: 'Supported by healthy recovery in the global aviation industry, rising demand across our key markets, and new opportunities posed by the low-carbon business, CAO is well-positioned to benefit from these opportunities.' CAO executive chairman Shi Yanliang stated that the company is also 'committed to' its development goals in the sustainable aviation fuel business, alongside business innovation and strengthened risk management. At the mid-day break on Thursday, shares of CAO were flat at S$1.23 compared with its closing price the previous day.
CNA
3 hours ago
- CNA
Musk's X back up after brief outage, Downdetector shows
Elon Musk's X was back up for thousands of users in the U.S. after a short outage on Thursday, according to tracking website Th outage eased to nearly 600 incidents of people reporting issues with the social media platform as of 11:20 a.m. ET, compared to a peak of more than 18,000 user reports, according to Downdetector. Downdetector tracks outages by collating status reports from a number of sources. Since the numbers are based on user-submitted reports, the actual number of affected users may vary.
Business Times
4 hours ago
- Business Times
Yanlord Land back in the black with H1 net profit of 379.2 million yuan
[SINGAPORE] Yanlord Land recorded a net profit of 379.2 million yuan (S$67.8 million) for the first half of 2025, reversing from a net loss of 486 million yuan in the year ago period. This comes amid a shift in the product mix of properties delivered and a reduction in the write-down of completed properties for sale and properties under development. Revenue declined 53.5 per cent to 9.3 billion yuan, from 20 billion yuan recorded the year before. Yanlord said on Thursday (Aug 14) that income from property development decreased by 59.9 per cent to seven billion yuan in H1, primarily due to a decrease in gross floor area delivered to customers during the period. The group reported an earnings per share of S$0.1963 in H1 2025, reversing from a loss of S$0.2516 in H1 2024. No dividend was declared, unchanged from the year ago period. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Zhong Sheng Jian, Yanlord's chairman and chief executive officer, said that according to published statistics, Chinese national property investment, primary property sales value and sales area in China, continued to decline year-on-year in H1, though the pace of decline has moderated. He said that following over three years of market adjustments, the market is showing early signs of stabilisation. 'The group reported a turnaround to profitability in H1. This was mainly driven by the higher gross profit margins of certain development projects delivered during the period,' he added Shares of Yanlord closed flat at S$0.585 on Thursday.
