STAR Market and Hong Kong Listings: A Comparative Overview

Launched in July 2019 on the Shanghai Stock Exchange, the STAR Market (科创板) represented a real departure from mainland China's traditional approval-based IPO system, moving to a registration-based system closer in spirit to disclosure-based regimes like the US, and explicitly targeting technology and innovation-sector companies, including — critically — allowing certain categories of pre-profit companies meeting specific revenue growth or R&D intensity thresholds to list. Seven years in, the Shanghai Stock Exchange's own reporting puts the cumulative track record at 592 listed companies, more than ¥1.1 trillion raised across IPOs and refinancing combined, and a total market value exceeding ¥9.6 trillion — a genuinely large, mature market segment by any measure.

The year-to-year trend within that cumulative total tells an important second story: 2020 (STAR Market's second year) saw 15 listings between February and April alone raising $3.5 billion and accounted for 47% of all capital raised across the entire mainland A-share market that year — an extraordinary early concentration. By 2023, annual activity had grown to 110 listings raising ¥67 billion, but 2024 saw a sharp pullback to just 38 listings raising ¥41 billion, reflecting the broader slowdown in CSRC listing approval pace discussed in a related fact on exit pathways. A foreign investor underwriting a STAR Market listing timeline in 2026 should weight the 2024 pace, not the 2020 or 2023 peaks, as the more representative recent baseline.

Hong Kong Exchange introduced its own structural reforms to capture pre-revenue innovation companies: Chapter 18A (introduced 2018) permits pre-revenue biotech companies to list, recognizing that clinical-stage biotech businesses can have genuine value years before generating revenue; Chapter 18C (introduced 2023) extended a similar pre-revenue/pre-profit listing pathway to a broader set of "specialist technology" companies across areas like advanced hardware, new energy, and AI. The track record is now substantial: more than 50 pre-revenue biotech companies had listed under Chapter 18A within its first several years, raising over HK$100 billion, and by mid-2025 that count had grown to roughly 73 listed biotechs. Combined, Chapter 18A and Chapter 18C together account for approximately 88 companies listed under HKEX's two innovation-focused chapters since 2018 — and in May 2025, HKEX and Hong Kong's Securities and Futures Commission launched a further streamlined process (the Technology Enterprises Channel, or TECH) specifically to speed up listings under both chapters, a sign regulators view this pathway as a continuing priority rather than a completed reform.

A pattern that has become close to standard practice among larger Chinese tech companies already listed in the US — Alibaba, JD.com, NetEase, Baidu, and others have all pursued secondary listings in Hong Kong — is maintaining a dual listing specifically to hedge against the risk of forced US delisting, giving existing shareholders a liquidity venue that survives even in an adverse US regulatory or geopolitical scenario. The value of this hedge was demonstrated concretely during the 2021–2022 HFCAA delisting scare discussed in a related fact: companies with an existing Hong Kong secondary listing faced meaningfully less investor anxiety over that period than US-only listed peers, even before the underlying dispute was formally resolved in December 2022.

Beyond the STAR Market and Hong Kong's two innovation chapters, the Singapore Exchange (SGX) and, to a lesser extent, the London Stock Exchange have periodically been discussed as supplementary listing venues for Chinese companies, particularly ones with a genuinely Southeast Asian or European commercial footprint that would make a listing story resonate locally. In practice, neither has developed anything close to the depth of specialist listing infrastructure that Hong Kong's 18A/18C framework or Shanghai's STAR Market now offer for pre-profit technology and biotech companies, and SGX and LSE listings by Chinese-founded companies remain comparatively rare and generally reserved for companies with a specific, deliberate reason to list there (a Singapore-headquartered holding structure with genuine Southeast Asian operations, for instance) rather than functioning as a mainstream third alternative to the STAR Market / Hong Kong pairing that dominates real market activity.

The three main venues also differ meaningfully in listing cost structure, which matters for smaller growth-stage companies weighing where to list. STAR Market listings, run through mainland underwriters under CSRC-supervised fee norms, have historically carried underwriting and sponsor fees in a broadly comparable range to other mainland exchanges, with the registration-based system reducing some of the earlier approval-related cost and delay relative to the old approval-based regime. Hong Kong listings under Chapter 18A/18C typically involve higher absolute legal and underwriting costs given the more extensive international-standard disclosure and due-diligence requirements (often involving both Hong Kong and international law firms, plus a Big Four or comparable auditor), reflecting Hong Kong's positioning as a venue aimed at attracting international as well as regional investors. For a smaller or earlier-stage company, this cost differential is a genuine factor in venue selection, not just a regulatory-eligibility question — a company that technically qualifies for either STAR Market or HKEX 18C listing may still find the STAR Market route more cost-efficient if its investor base and growth story are primarily domestic rather than international.