BIOKIN PHARMACEUTICAL(SH:688506) 2 1 Shi Ji Jing Ji Bao Dao·2025-11-13 05:40Core Viewpoint - The Hong Kong stock market is experiencing a surge in biotech IPO applications, with companies eager to capitalize on the favorable listing environment, despite some unexpected delays in the process [1][2]. Group 1: IPO Activity - Six biotech companies, including major players like Mindray Medical and innovative firms like Insilico Medicine and Anxuyuan Technology, have submitted IPO applications to the Hong Kong Stock Exchange within a short span, indicating a strong demand for capital [2][3]. - The Hong Kong Stock Exchange's 18A listing rule, introduced in 2018, allows unprofitable biotech companies to raise funds, which has attracted many innovative firms to the market [2]. Group 2: Company Strategies - Mindray Medical, a leader in the medical device sector, aims to enhance its international strategy through its IPO, with plans to increase its global revenue share and invest in R&D and sales networks [3]. - Smaller biotech firms like Sinovac Biotech and Real Bio are also seeking to expand internationally through their IPOs, with specific plans to fund product development and market expansion [4]. Group 3: Market Environment - The influx of southbound capital into the Hong Kong market has reached a historic high, with net inflows exceeding HKD 5 trillion, providing a solid foundation for biotech IPOs [5][6]. - Recent market dynamics show a shift in investor strategy from aggressive tech investments to defensive high-dividend stocks, impacting the appetite for biotech IPOs [5]. Group 4: Valuation Concerns - The delay in the IPO of Baillie Gifford is notable, as it highlights valuation challenges in the biotech sector, with concerns over high entry barriers and insufficient valuation discounts compared to A-shares [7][8]. - Baillie Gifford's fluctuating performance raises questions about its long-term profitability, as its recent revenue surge is tied to a one-time transaction rather than sustainable growth [9][10]. Group 5: Industry Outlook - The case of Baillie Gifford serves as a warning for other biotech firms, emphasizing the importance of clear market positioning, valuation strategies, and stable performance to succeed in the Hong Kong IPO landscape [10][11]. - The market is becoming more discerning, favoring companies with genuine technological advantages and commercialization potential, signaling a return to rationality in the biotech sector [11].