📈 Since 2018, 56 biotech companies have been listed on the Hong Kong stock exchange through the Ch18A pathway, a special listing segment designed to accommodate high-growth, pre-revenue biotech firms. However, a recent article reveals that only 9 of these companies have been able to meet the profit requirement of LR 8.05. This raises questions about the long-term potential and investment risks associated with these companies.
🔬 On one hand, the Ch18A listing provides a platform for biotech companies to raise funds and accelerate their research and development. This can lead to groundbreaking discoveries and potentially lucrative returns for investors. However, the data shows that a staggering 47 out of 56 companies are still unable to meet the main board listing requirements, with only 1 out of 47 turning a profit.
🎲 This high-risk, high-reward investment landscape may not be suitable for retail investors, as the past five years have shown underwhelming performance for many of these biotech firms. The unpredictable nature of the biotechnology sector, coupled with the fact that most of these companies are still in the red, makes it a challenging environment to navigate.
💰 Moreover, it’s worth noting that the Ch18A listing platform is often utilized by pre-IPO investors seeking liquidity. While this could be a boon for early-stage investors, it may not necessarily translate to long-term success for retail investors entering the market.
🔎 In conclusion, investing in biotech companies listed under Ch18A can be a double-edged sword. While the potential for significant returns exists, the majority of these companies have yet to prove their profitability. Retail investors should exercise caution and conduct thorough research before diving into this high-risk sector.
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