At this forum,Liu Xiaolan, co-head of the Healthcare Investment Banking Group at CITIC Securities and Managing Director, shared a keynote speech titled 'The Selection of Listing Locations for Healthcare Enterprises'. The speech mainly focused on four parts: the recent situation of major domestic and international capital markets, the IPO market in Hong Kong, an introduction to IPOs in the A-share market, and the choice of listing paths for enterprises domestically and internationally.
Liu Xiaolan, Co-Head of the Healthcare Investment Banking Group and Managing Director of CITIC Securities
01Recent Developments in Main Capital Markets at Home and Abroad
Liu Xiaolan introduced that the healthcare industry is a rapidly developing sector. With continuous technological progress and changes in market demand, more and more healthcare enterprises are seeking to go public. For these companies, choosing an appropriate listing location is very important, as it not only affects the company's financing effectiveness but is also closely related to its future development.
Liu Xiaolan pointed out that the A-share market has experienced a rapid capital expansion phase in the past few years. In 2022, capital market policies maintained relative stability, and the scale of IPOs on the A-share market only decreased slightly, while the decline in the IPO markets in the United States and Hong Kong was very significant. In terms of industry distribution, the recent two-year decline in the proportion of IPOs in the healthcare sector in the US stock market is mainly due to a substantial increase in the proportion of IPOs in the financial sector. In contrast, the A-share and Hong Kong stock markets have seen a significant increase in the scale of IPOs in the healthcare sector thanks to the launch of the Sci-Tech Innovation Board and the new 18A policy.
Liu Xiaolan stated that the A-share market is one of the main choices for healthcare companies to go public. In recent years, with the rapid development of the domestic economy and increased policy support, the status of the healthcare industry in the A-share market has gradually risen. At the same time, due to the A-share market's high familiarity with domestic enterprises, the issuance scale and number of healthcare companies in the A-share market are also relatively stable.
He pointed out that in the past five years, the scale of A-share IPO financing has shown a continuous growth trend. From 2018 to 2022, the financing scale of the A-share IPO market steadily increased. Especially in 2022, the total financing scale reached 586.886 billion yuan, with 428 companies raising funds. Further observation of the financing situation across various sectors reveals that since the implementation of the registration-based system, the IPO financing scale of the Science and Technology Innovation Board (STAR Market) and the ChiNext has seen rapid improvement, becoming an important incremental part of the A-share IPO market. The financing scale of the ChiNext increased from 28.689 billion yuan in 2018 to 179.636 billion yuan in 2022, with a compound annual average growth rate as high as 58.19%. Since the opening of the STAR Market in 2019, its financing scale has rapidly grown from 82.427 billion yuan to 252.044 billion yuan in 2022, with a compound annual average growth rate of 45.15%.
02Design of the listing path for healthcare enterprises
Liu Xiaolan explained that for healthcare enterprises, listing domestically requires meeting certain conditions and standards, including financial status, business sustainability, equity structure, etc. Listing domestically can obtain policy support and a higher valuation, and it is also conducive to enhancing the enterprise's reputation and brand value. However, due to the relatively strict review standards in the domestic market, it is also more difficult for enterprises to list domestically.
In comparison, the requirements for overseas listing are relatively lower, and it also provides access to a wider range of financing channels. For healthcare companies planning to expand into overseas markets, overseas listing is a good option.
Medical and health enterprises need to consider multiple factors when choosing a listing location, including market conditions, financing needs, future development, etc. Enterprises should fully consider their own characteristics and needs based on the current market situation and policy environment, and choose the listing location that best suits their circumstances. Enterprises also need to weigh between domestic and overseas listings, select the listing path that is most conducive to their development, and pay timely attention to market dynamics and policy changes. They should adjust their listing strategies, strengthen communication with investors, enhance their brand value and market influence.
Finally, Liu Xiaolan concluded that different enterprises should choose the most suitable path based on their fit with different listing locations and routes.
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