Zelos Tech, MiniMax and others file for listing in Hong Kong after new rules
Many more are preparing to follow their footsteps at a time of heightened market volatility
About two dozen Chinese companies, including autonomous driving firm Zelos Tech and artificial intelligence (AI) startup MiniMax, have confidentially filed for listing in Hong Kong this year. This has happened after a new rule, implemented in May, permitted private filings.
The Hong Kong exchange’s rule for U.S.-style confidential filings (advantageous in the innovation-driven economy) allows certain companies to keep their business plans and financials under wraps in the initial stages of their stock market debut process.
Most filings followed the launch of the Technology Enterprises Channel (TECH), allowing certain niche biotech and technology firms, including AI companies, to apply privately. Confidential filings appeal to sectors such as AI and semiconductors, which are considered sensitive due to heightened macroeconomic and geopolitical risks.
The system permits firms to navigate the regulatory review process without public disclosure, offering flexibility when IPO timelines are uncertain. Earlier, without exemptions from the Hong Kong exchange, only firms listed on another major overseas bourse could lodge draft prospectuses confidentially ahead of launching a share sale in the Asian financial hub.
The new mechanism will bolster Hong Kong as a preferred fundraising venue, especially for Chinese companies, amid fierce competition with major listing venues such as New York, where confidential filings have been allowed for years.
While braving volatile Sino-U.S. relations and U.S. calls for strict oversight of Chinese firms, numerous Chinese companies are seeking a U.S. listing.
So far this year, Hong Kong has seen the influx of Chinese companies to the global top spot by listing of initial and second listings. It has overtaken its biggest rival, the New York Stock Exchange. The momentum is likely to continue with over 190 listing applications (45 percent in technology and 20 percent in healthcare).
Early this year, U.S.-listed robotaxi companies Pony AI and WeRide also submitted confidential filings for their second listings in Hong Kong. Recently, fast-fashion retailer Shein, lodged its filing for a Hong Kong IPO confidentially.
Meanwhile, companies not covered under the newly-launched TECH initiative can request a waiver from the Hong Kong exchange to keep their applications private.
Commenting on the scenario, Jean Thio, a capital markets partner at Clifford Chance, said that biotech companies were cautious about releasing information on their projects and research and development plans due to intense competition in the sector.
He added, “These companies have valuable IP that’s being developed and they’re trying to monetise it. 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.”
In Hong Kong, an IPO process takes at least six months from filing preliminary documents to launching the book.
As a Chinese company executive remarked, “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.”