QuantumPharm Becomes First Company Listed on HKEX Under Chapter 18C for Specialized Technology Firms

Reporters Zhang Wenxiang and Jin Wanxia of this newspaper

On June 13, XtalPi, a technology company primarily promoting AI-driven drug discovery, was listed on the Main Board of the Hong Kong Stock Exchange (hereinafter referred to as HKEX), becoming the first company to be listed through the Chapter 18C Specialized Technology regime (hereinafter referred to as 18C), and also the first AI + robotics stock on the HKEX.

Reporters noticed that the listing of XtalPi has caused a sensation in the capital market. This time, XtalPi was priced at HK$5.28 per share. The Hong Kong public offering portion received 103.35 times oversubscription, while the international offering portion received 2.13 times oversubscription. As of the closing on June 13, XtalPi closed at HK$5.80 per share, representing a 9.85% increase from the offering price.

In this regard, Wen Shuhao, co-founder and chairman of XtalPi, stated that XtalPi aims to become an outstanding enterprise that values both social and commercial impact, using AI and robotics technology to build the new infrastructure for future industry R&D. After going public, XtalPi will continue to broadly empower the R&D innovation of its global customers.

Public information shows that XtalPi was founded in 2015 as an innovative R&D platform based on quantum physics, empowered by artificial intelligence, and driven by robotics. Its technology is mainly applied in pharmaceuticals and materials science (including agricultural technology, energy, new chemicals, and cosmetics). A pharmaceutical company CEO told *Securities Daily* reporters that XtalPi has become a global leader in AI science. Due to its advanced technology, according to the prospectus, XtalPi has provided services to over 300 biotechnology and pharmaceutical companies and research institutions worldwide, including Pfizer, Johnson & Johnson, Merck Group of Darmstadt, Germany, CT Tianqing, CK Life Sciences, Daewoong Pharmaceutical of South Korea, among others. This includes 16 of the top 20 global biotechnology and pharmaceutical companies.

As of now, XtalPi has not yet achieved profitability. According to the prospectus, XtalPi's R&D investments reached 213 million yuan, 359 million yuan, and 480 million yuan in 2021, 2022, and 2023 respectively; during the same period, XtalPi reported net losses of 2.137 billion yuan, 1.439 billion yuan, and 1.906 billion yuan respectively.

At the end of November 2023, XtalPi applied for a listing on the Hong Kong Stock Exchange under Rule 18C (Reporter's note: At the end of March 2023, the Hong Kong Stock Exchange introduced Rule 18C, allowing unprofitable specialized technology companies to apply for listing).

Reporters noticed that, as of now, only Black Sesame Technologies and XtalPi have submitted listing applications to the Hong Kong Stock Exchange under Chapter 18C. Liu Bowen, Co-Head of Investment Banking at J.P. Morgan China, believes this is mainly due to a challenging market environment, which has made investors more cautious. However, "many investment institutions prefer to invest in companies with profitability rather than those with high growth expectations. The capital market is also gradually showing a trend of value differentiation towards leading enterprises," Liu Bowen stated. Although only two companies have applied since the introduction of the Specialized Technology regime, once the infrastructure bridges are built, traffic will naturally pick up over time.

Looking ahead, XtalPi plans to leverage its AI and automation capabilities and expertise to empower automated robotic laboratories as experimental infrastructure, providing stable and reliable data and results in a more efficient, accurate, and scalable manner, while expanding its business globally.

(Edited by Qiao ChuanChuan)