What Are the Core Thresholds, Applicable Industries and Latest Policy Adjustments of HKEX Chapter 18A and Chapter 18C Listing Rules?

Through the introduction of Chapters 18A and 18C, HKEX (Hong Kong Exchanges and Clearing Limited) has successfully opened capital-market channels for pre-revenue high-tech companies. The core differences between the two chapters lie in industry focus and entry thresholds:

1. Chapter 18A: The "Green Channel" for Biotech Companies

Eligible applicants: Pre-revenue biotechnology companies (focused on novel drugs, biologics, medical devices, etc.).

Market-cap threshold: A market capitalization of at least HK$1.5 billion at listing.

Core product milestone: At least one core product must have passed the concept stage (usually meaning completion of Phase I clinical trials). In practice, however, the core products of successful listcos have typically entered Phase II or later trials.

Operations and funding: Working capital must cover at least 125% of expenses for at least 12 months after listing. In addition, the company must have been run by substantially the same management for at least two financial years.

Investor requirement: At least 6 months before listing, the company must have received investment from at least one Sophisticated Investor that has not exited.

Listing marker: The stock short name carries the suffix "-B".

2. Chapter 18C: The "Ladder Rules" for Specialist Technology Companies

Eligible fields: Next-generation information technology; advanced hardware; advanced materials; new energy and energy conservation & environmental protection; and new food and agricultural technology.

Market-cap thresholds (latest adjustment): This adjustment is a temporary measure, applicable from September 1, 2024 to August 31, 2027.

Commercialized companies: reduced from HK$6 billion to HK$4 billion.

Pre-commercial companies: reduced from HK$10 billion to HK$8 billion.

Commercialization definition: A "commercialized company" is one whose audited revenue for the most recent financial year is no less than HK$250 million; companies below this standard are "pre-commercial companies".

R&D spending: Commercialized companies must spend at least 15% of revenue on R&D; pre-commercial companies must spend at least 30% (if revenue in the past year was between HK$150 million and HK$250 million) or at least 50% (if revenue was below HK$150 million).

Investor requirement: Investment from at least two Pathfinding Sophisticated Independent Investors (PIIs).

Operations and funding: Pre-commercial companies must likewise secure funding covering 125% of expenses for 12 months after listing.

Listing marker: The stock short name carries the suffix "-P".

3. Other Key Policies and Services

"Technology Enterprises Channel" service: Launched by HKEX in May 2025, it provides one-on-one pre-listing professional guidance for companies planning to list under Chapter 18A or 18C, with the option to submit listing applications confidentially.

Weighted voting rights (WVR) facilitation: Companies fully compliant with Chapter 18A or 18C are deemed to automatically satisfy the "innovative industrial company" qualification for adopting a WVR structure, simplifying the application process.

Intellectual property practice: For Chapter 18A companies, although the rules do not mandate it, engaging IP counsel to conduct a full due-diligence review and issue a report has, in practice, become an important routine step.

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