QuantumPharm received about HK$4.3 billion of orders based on 12 major brokers’ margin lending to clients for the retail tranche of its IPO when the books closed at noon on Friday, according to Futu Securities.
Phillip Securities (Hong Kong) topped the list, receiving subscriptions worth HK$2.7 billion from its margin-lending clients and HK$11 million from its cash clients.
Futu Securities ranked second at HK$748 million, followed by Bright Smart Securities at HK$220 million.
“The strong performance of recent IPOs has helped build investors’ confidence in QuantumPharm, as the government and the stock exchange have been very supportive of the 18C listing regime,” said Louis Wong, executive director of Phillip Capital Management (Hong Kong).
QuantumPharm is the first IPO under Chapter 18C, a new regime introduced more than a year ago for pre-revenue specialist technology firms. Chapter 18C allows companies worth at least HK$10 billion to sell IPO shares even before they have made a single dollar of revenue.
Normal listing candidates have to make at least a combined HK$80 million profit in the three years leading to their IPO.
“The strong response to QuantumPharm will encourage more pre-revenue technology companies to list under Chapter 18C,” said Robert Lee Wai-wang, a lawmaker representing the financial services sector. “This will benefit Hong Kong to develop as a fundraising centre for technology companies.”
QuantumPharm, also known as XtalPi, had originally set aside 95 per cent of the 187.37 million new shares for global investors and the rest for retail investors.
However, the 75 times oversubscription of the retail portion will trigger a clawback mechanism under the listing rule. This will increase the shares available for retail investors to 37.48 million, or 20 per cent of the total offering, while the international tranche will be cut to 80 per cent.
QuantumPharm’s international portion was also fully subscribed, according to a source. The IPO has attracted eight cornerstone investors who have subscribed to HK$338 million worth of shares.
One of the cornerstone investors is Successful Lotus, an investment company owned by Hong Kong tycoon Peter Lee Ka-kit, chairman of Henderson Land Development. His firm has invested HK$40 million.
QuantumPharm counts Tencent, HongShan, China Life Insurance, Google and SoftBank Group among its investors.
“AI and other technology companies are expected to drive economic growth,” said Katerine Kou, chairwoman of Hong Kong Securities Association. “Long-term investors are expected to continue to support these technology companies in listing and growing their business.”
The improved market sentiment has led to rumours of Hong Kong tycoon Richard Li Tzar-kai-backed insurer FWD Group Holdings reviving plans for an IPO in Hong Kong. The group said it was keeping a “close eye” on market conditions.
Since May, Beijing has introduced a slew of measures to rescue the floundering property market after the China Securities Regulatory Commission rolled out policies to support the capital markets, including encouraging more large mainland companies to list in Hong Kong.
The Hang Seng Index climbed as much as 31 per cent from a January low up to late last month, while the CSI 300 Index that tracks stocks traded on the Shanghai and Shenzhen stock exchanges has rallied over 10 per cent amid growing optimism at home.