Ganzhou Hemay Pharmaceutical postponed its Hong Kong initial public offering on Wednesday, hours after its retail books closed, citing current market conditions. The Chinese drug developer had offered 55.21 million H shares at HK$15.50 to HK$18.90 each, a deal worth up to about HK$1.04 billion, and had been due to start trading on Monday, Nov. 9, according to its filings on HKEXnews.

Hemay is the first of seven offerings due to list in Hong Kong from Nov. 9 to Nov. 12 to drop out. For investors in Asia, it shows that deals already marketed to the public are struggling to price, even though Hong Kong IPO proceeds this year have passed US$51.6 billion, according to The Standard.

Hemay calls off its listing after the books close

In an announcement late Wednesday afternoon, Hemay said the international underwriting agreement would not be signed, so the Hong Kong underwriting agreement would not become unconditional. Applicants will get their money back in full without interest, with refunds due to go out on Nov. 9, and no share certificates will be issued. The company said it remained committed to listing “in due course.”

The decision came a day before the price was due to be set, by noon on Thursday, Nov. 5, according to the formal notice. About 10% of the shares were initially set aside for Hong Kong retail investors.

Hemay had lined up some institutional support. Mainland fund managers GF Fund Management, E Fund Management, Fullgoal Fund Management and China Universal Asset Management, three of them partly through Hong Kong units, agreed to buy US$29.0 million of shares, or about HK$227.6 million, the prospectus showed. That was 21.81% of the offer at the top of the range. Seven of the 10 largest Hong Kong IPOs this year had cornerstone allocations of nearly 50%, mostly in the first half, the South China Morning Post reported in early October.

Hemay was applying under Chapter 18A, the exchange's regime for biotech companies, as the “B” marker on its listing name shows. Its main product, Mufemilast, is an oral PDE4 inhibitor that won approval in China in September 2025 for moderate to severe plaque psoriasis and is in late-stage trials for Behçet's disease and ulcerative colitis. Hemay recorded no product revenue in the period covered by the prospectus; sales began in July, and it had shipped 2,200 boxes to nine distributors.

Its net loss widened to RMB129.8 million in 2025 from RMB123.4 million in 2024, and it expects a significantly larger loss in 2026 as trials and marketing expand.

Hong Kong IPO withdrawals pile up

Hemay is at least the fifth company since July to halt a Hong Kong listing after its public offer had run. In late October the SCMP counted four: robotics maker Changzhou Microintelligence, Jiangsu Slender West Lake Culture and Tourism, container yard operator EKH and fintech supplier Shenzhen Forms Syntron Information, which together sought up to HK$2.1 billion. Microintelligence had one cornerstone investor, taking about 2% of the offer, and Slender West Lake had none, the newspaper said. Forms Syntron had sought up to HK$943.4 million before pulling its deal in September, according to The Standard.

Weak trading after listing is part of the problem. Of the 31 companies that listed in Hong Kong in the third quarter, 20 were below their offer prices at the end of September, the SCMP reported on Oct. 8. As Capital Times reported this week, 16 of the 20 most recent listings were trading below their offer prices on Nov. 3.

Alvin Cheung, associate director at Prudential Brokerage, told the SCMP that retail subscription inquiries had fallen by about half in two months and that institutions were resisting aggressive pricing. “They are extremely strict on valuation,” he said.

Beijing slows the mainland pipeline

Signals from the mainland have added to the caution. The China Securities Regulatory Commission gave investment banks informal “window guidance” to pause IPOs and suspended large share sales by existing shareholders until markets recover, the Financial Times reported on Tuesday, according to a Reuters story carried by The Standard. Reuters said it could not immediately verify the report. The CSI 300 index fell 8.5% in October, its worst month in more than a decade.

On Wednesday, Reuters reported that memory chipmaker Yangtze Memory Technologies had put its planned 33 billion yuan Shanghai IPO on hold and, citing people familiar with the matter, that the regulator had told banks to slow listings by AI and chip companies. A day earlier, Bloomberg reported that Baidu's chip unit Kunlunxin, which confidentially filed in January for a US$2 billion Hong Kong listing, may not come to market until 2027 because it is still waiting for approval from Chinese regulators. A Baidu spokesman denied the market rumors, The Standard said.

Li Chao, vice chairman of the CSRC, told a financial leaders' summit in Hong Kong on Tuesday that China would provide an institutional environment that supports domestic companies listing in the city. Large issuers are still preparing: Shanghai-listed Semight Instruments has picked banks for a Hong Kong share sale of more than US$1 billion next year, according to Bloomberg, as reported by The Standard.

The rest of Hemay's batch now faces the same market. RelyEZ Energy Storage Technology, whose books closed at the same time as Hemay's, had posted no change to its Nov. 9 debut on HKEXnews by late Wednesday. GPU designer Denglin Technology and Xinde Semiconductor were scheduled to close their retail offers at noon on Thursday, Nov. 5, with trading set for Nov. 10, according to their formal notices. Sichuan Neautus Traditional Chinese Medicine is due to list on Nov. 11, and Amicro Technology and HOSIN Electronics, the last two in the group, on Nov. 12.