Hong Kong IPO Resurgence and the Rise of Listings Under Chapter 18C of the Main Board Listing Rules

Author: Stefan Schmierer, Managing Partner | Chuqi Zhao, Legal Intern

Hong Kong has seen a remarkable resurgence in IPO activity in Q1 2026, reasserting itself as the leading global fundraising hub once again. Total funds raised were approximately HK$110.40 billion (US$14.09 billion), a nearly sixfold increase compared to the same period in 2025 and Hong Kong’s strongest IPO quarter in five years. 

For companies who are operating in or looking to expand into Asia, this renewed IPO momentum signals strong institutional confidence in a favourable regulatory environment.

What is an IPO?

An IPO is the process in which a private company can offer shares to the public and become listed on a stock exchange. It offers several strategic advantages for businesses:

• Grants access to a large pool of institutional and retail investors.

• Public listings enhance brand credibility.

• Gives liquidity for founders and initial investors.

• Accessible platform for future fundraising rounds.

Purpose of an IPO

Besides providing business with direct exposure to one of the most globally connected capital markets, an IPO in Hong Kong is especially attractive today because:

• Provides business with direct access to one of the most liquid markets.

• Global investors are seeking increased exposure to Asia, resulting in renewed capital inflows.

• There is strong demand from investors for fast growing companies within AI and other innovative technology sectors.

• The current regulatory environment is especially conducive to businesses listing under Chapter 18C given temporarily lowered financial thresholds. 

Chapter 18C Explained: A New Pathway for Innovation  

The increased adoption of Chapter 18C is a key driver behind the IPO resurgence in Hong Kong, which targets Specialist Technology Companies (STCs) in five eligible “forward looking” industries:

• Next generation information technology.

• Advanced hardware and software.

• Advanced materials.

• New energy and environmental protection.

• New food and agriculture technologies.

It enables high growth companies to list on the Hong Kong Stock Exchange even if they have not yet met traditional profit or revenue requirements, which is especially relevant for business engaging in upfront Research and Development (R&D).

In Q1 2026, Chapter 18C listings have rapidly gained traction:

• Approximately HK$19.5 billion raised (US$2.49 billion), representing nearly one-fifth of total IPO proceeds.

• Raised volume surpassed the combined volume from 2024 and 2025.

• Significant backing from institutional investors and sovereign wealth funds.

This trend largely aligns with the global surge in AI and related technology investments, as many newly listed companies have a stated focus on these areas.

Basic legal mechanics of Chapter 18C listings

1. Two Categories of Applicants  

For companies considering a listing through this pathway, it is essential to understand the underlying legal frameworks. There are two categories of applicants:

Commercial applicants

• At least HK$6 billion in market capitalisation.

• Meet revenue threshold of at least HK$250 million from their core specialist technology business in the most recent financial year.

• R&D expenditure amounting to at least 15% of total operating expenditure both on a yearly basis for at least two of the three financial years prior to listing, and on an aggregate basis over those three years. 

Pre-commercial applicants

• At least HK$10 billion in market capitalisation. 

• Must demonstrate a credible path to commercialisation.

• R&D expenditure amounting to at least 30% where revenue in the most recent financial year is HK$150 million or more, and at least 50% where that revenue is below HK$150 million.

Both types of applicants must have also received meaningful investment from a core group of sophisticated independent investors. 

2. Technology Enterprises Channel (TECH)

Beginning May 2025, the HKEX and SFC have jointly operated TECH. As traditional financial metrics can struggle to capture the value in high growth companies, TECH works to address this by introducing specialised evaluation processes.

There are numerous benefits for companies which utilise TECH, which help to reduce uncertainty for applicants while upholding the high standards for regulatory integrity:

• Provides confidential filing procedures to protect sensitive information.

• Specialist review teams to assess highly technical business models.

• Tailored guidance on eligibility and suitability for listing.

3. Flexibility for Weighted Voting Rights (WVR) structures for shareholders

Through a WVR structure, the company issues two types of shares:

• Ordinary shares carry one vote per share and are sold to regular investors.

• WVR shares are typically held by founding members, and each share carries multiple votes (up to a maximum of 10 in Hong Kong). 

These structures enable founders to retain strategic control of their companies while raising public capital. But, under a traditional Hong Kong listing, companies face a subjective, heavily scrutinized regulatory test to demonstrate that they meet “Innovative Company Requirements” and have external investor validation. 

Listing under Chapter 18C dramatically streamlines this process. Companies which successfully qualify for a Chapter 18C listing are presumed to satisfy both the innovativeness and external investor requirements.

Proposed lowering of market capitalisation requirements

A March 2026 consultation paper has also, among other changes, proposed a significant reduction in the financial thresholds a company must satisfy in addition to the prior tests.

• Test A: Lowered from HK$40 billion market capitalisation to HK$20 billion.

• Test B: Lowered from HK$10 billion market capitalisation and HK$1 billion in revenue to HK$6 billion market capitalisation and HK$600 million in revenue.

These newly proposed lowered thresholds would provide an unprecedented opportunity for early-stage technology companies to go public.

• Allows founders to preserve strategic control during critical growth phases.

• Reduced financial thresholds enables earlier stage companies to access capital markets when R&D funding is crucial. 

• Improves predictability by reducing regulatory friction and streamlining listing procedures.

These changes are currently under review by the HKEX, and a conclusion paper is expected by the end of 2026.

How Ravenscroft & Schmierer Can Help?

Navigating the complex mechanics of a Hong Kong IPO can be challenging, especially if a Chapter 18C pathway is being considered.

At Ravenscroft & Schmierer, our Corporate & Commercial team combines legal expertise with commercial insight to offer clients sophisticated guidance at every stage of the IPO journey. Contact us to discuss how we can support your strategic business objectives.

FAQ: Hong Kong IPO and Chapter 18C Listings

What are the key benefits of a Hong Kong IPO for companies?

A Hong Kong IPO can provide access to one of the world’s most active capital markets, which offers strong institutional investor demand, high liquidity, and enhanced visibility for firms operating in Asia.

What is Chapter 18C in a Hong Kong IPO?

Chapter 18C is a listing regime that allows certain Specialist Technology Companies in designated industries to list on the Hong Kong Stock Exchange without needing to meet the traditional profit or revenue requirements, making it ideal for early-stage businesses.

What companies qualify as a Specialist Technology Company under Chapter 18C?

To qualify, companies must primarily operate within one of the five recognised frontier industries, if they can demonstrate strong growth potential, significant investment in R&D, and backing from sophisticated independent investors.

Can pre-revenue companies list in Hong Kong?

Under Chapter 18C, pre-commercial companies may qualify for listing if they can demonstrate a strong focus on R&D, meet certain market capitalisation thresholds and can demonstrate a credible path to commercialisation.

What is the Technology Enterprises Channel (TECH) and why is it important?

TECH is a jointly operated regulatory initiative by the HKEX and the SFC that streamlines the IPO process by offering confidential filings, specialised review teams, and clearer eligibility guidance.

How do Weighted Voting Rights (WVR) structures benefit founders?

WVR structures allow founders to retain strategic control of their companies even after listing. Under Chapter 18C, the approval process for WVR structures is streamlined, which significantly reduces the regulatory hurdles involved.

Is now a good time to pursue a Hong Kong IPO?

Considering the strong IPO momentum, favourable regulatory conditions, and growing investor demand for innovative technologies, the current market presents a very compelling opportunity for business who wish to pursue a Hong Kong IPO. 

How can Ravenscroft & Schmierer support your Hong Kong IPO?

Ravenscroft & Schmierer provides tailored legal guidance to support your business every step of the journey, from initial eligibility assessments to regulatory engagement and execution. If you have any inquiries, contact us here to explore how we can assist you.

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Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.

For specific advice about your situation, please contact:

Stefan Schmierer

Managing Partner

+852 2388 3899

sschmierer@rs-lawyers.com.hk