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Over 20 firms filed confidentially with Hong Kong bourse,

sources say

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New rules allow private filings for certain biotech, tech

companies

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Confidential filings help avoid early scrutiny, offer

flexibility

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Shein filed for Hong Kong IPO confidentially, sources say

By Julie Zhu, Selena Li and Kane Wu

HONG KONG, Aug 11 (Reuters) - At least two dozen Chinese

companies have confidentially filed for listing in Hong Kong

this year and more are preparing to do so, two industry sources

said, following a new rule permitting private filings at a time

of heightened market volatility.

The Hong Kong exchange's rule for U.S.-style confidential

filings, which allows certain companies to keep their business

plans and financials under wraps in the initial stages of their

stock market debut process, was implemented in May.

Chinese companies, including autonomous driving firm Zelos

Tech and artificial intelligence (AI) startup MiniMax, have

filed confidentially in recent months to get themselves listed

in the city, according to separate sources.

Most filings followed the launch of the Technology

Enterprises Channel (TECH) in May, allowing certain niche

biotech and technology firms, including AI companies, to apply

privately.

Confidential filings appeal to sectors such as AI and

semiconductors that are deemed sensitive due to heightened

macroeconomic and geopolitical risks, advisers say. The

mechanism allows firms to navigate the regulatory review process

without public disclosure, offering flexibility when IPO

timelines are uncertain, according to several senior bankers at

global and Chinese investment banks.

Previously, without getting exemptions from the Hong Kong

exchange, only firms already listed on another major overseas

bourse could lodge draft prospectuses confidentially ahead of

launching a share sale in the Asian financial hub.

The new filing mechanism is set to bolster Hong Kong as a

preferred fundraising venue mainly for Chinese companies amid

fierce competition with other major listing venues, notably New

York, where confidential filings have been allowed for years.

A record number of Chinese companies are seeking a U.S.

listing this year, braving volatile Sino-U.S. relations and U.S.

calls for strict oversight of Chinese firms, Reuters reported

last week.

Still, Hong Kong has been propelled by the influx of Chinese

companies to the global top spot by listing volume of initial

and second listings so far this year, overtaking its biggest

rival, New York Stock Exchange, according to data from LSEG.

The listing momentum is set to continue with more than 190

listing applications - approximately 45% in technology and 20%

in healthcare, according to the exchange operator Hong Kong

Exchanges and Clearing Ltd ( HKXCF ) .

U.S.-listed robotaxi companies Pony AI and WeRide ( WRD )

have also submitted confidential filings for their

second listings in Hong Kong earlier this year, two sources with

knowledge of the matter said.

The sources declined to be named as they were not authorised

to speak to the media.

MiniMax, Pony AI and WeRide ( WRD ) declined to comment. Zelos

did not respond to Reuters' request for comment.

HKEX declined to comment for this story or on the total

number of confidential applications.

REGULATORY REVIEW

Other companies not covered under the newly-launched TECH

initiative can request a waiver from the Hong Kong exchange to

keep their listing applications private, according to capital

markets bankers and lawyers.

Fast-fashion retailer Shein, for example, lodged its

filing for a Hong Kong IPO confidentially last month, in the

most high-profile such case so far, according to two separate

sources with direct knowledge of the matter. Shein did not

respond to a request for comment.

Confidential filings are advantageous in the

innovation-driven economy.

Biotech companies are particularly cautious about releasing

information on their projects and research and development plans

due to intense competition in the sector, according to Jean

Thio, a Clifford Chance capital markets partner.

"These companies have valuable IP that's being developed and

they're trying to monetise that," Thio said.

"If you were to put all that information out at such an

early stage, there are worries that you could be leaking

confidential trade secrets which your competitors could use

against you."

A typical IPO process in Hong Kong generally takes at least

six months from filing preliminary documents to launching the

book, bankers and lawyers said.

"The market just shifts overnight with geopolitical or just

tariff news. No one wants to be in the headline of an IPO flop

after they file," said a Chinese company executive who held

discussions about filing confidentially for a Hong Kong IPO.