Chinese biopharmaceutical manufacturer HighTide Therapeutics is aiming to raise HK$278 million (US$35.6 million) from an initial public offering in Hong Kong, a fraction of the originally planned US$200 million.

The Shenzhen-based company is offering 24.19 million shares at HK$11.50 each, according to its prospectus. The firm said it would start taking orders from investors from Thursday, with the listing set for December 22.

The IPO’s net proceeds are about HK$194.1 million after deducting underwriting fees and expenses, according to the prospectus. Some 80 per cent will go towards clinical development activities, and research and development.

Cornerstone investor Cangzhou Chuangrong is subscribing to HK$110 million of HighTide’s shares.

UBS and Huatai International are the joint sponsors of the deal.

The city’s IPO tally is set to shrink by more than a fifth this year, with some 65 IPOs set to raise about HK$45.8 billion, according to a report by Deloitte on Monday. Last year, 84 new listings raised HK$99.6 billion.

“Continuous US interest rate hikes and a slower-than-expected Chinese economic recovery sent market valuations down and constrained liquidity,” said Robert Lui at Deloitte China in the report. “As a result, Hong Kong did not have any mega IPOs in 2023.”

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Despite the tepid sentiment currently prevailing on the market, the main objective for some companies is to first obtain a listing status, according to some analysts.

“New funds can be raised on the secondary market, when the market gets better,” said Billy Au, partner at law firm Mayer Brown, referring to the possibility of lower interest rates next year.

Lower interest rates look possible next year after the Federal Reserve did not raise rates for the fourth consecutive time on Wednesday. Chairman Jerome Powell said the Fed will start cutting rates well before it hits the inflation goal.

The Hang Seng Index has fallen 3 per cent so far this month, extending four months of consecutive slides. The index has lost nearly 19 per cent year to date.

Meanwhile, the much anticipated wait for Alibaba Group Holding to spin off its companies has been disappointing. Last month, the Chinese e-commerce giant scrapped plans to list its cloud unit AliCloud, citing uncertainties caused by US curbs on advanced chip exports to China.

Alibaba has also put the listing of its grocery unit Freshippo on the back burner amid weak market sentiment. However, the IPO of its logistics arm Cainiao is still in the works, which aims to raise some US$1 billion. Alibaba owns the Post.

HighTide is a biopharmaceutical company involved in the development of novel multifunctional therapies for metabolic and digestive diseases.

One of the company’s core products, HTD1801, is currently undergoing phase two evaluation by regulators in the US, China and some other countries.

In January, HighTide closed a US$107 million series C funding round led by TCM Healthcare Fund of Guangdong, which is managed by China Development Bank Capital. Other investors included Yuexiu Fund and Yuthai Fund.