Photo taken on July 31, 2021 shows the statues on the square of Hong Kong Exchanges and Clearing Limited (HKEX) in south China's Hong Kong. (Xinhua/Wu Xiaochu)
BEIJING, Oct. 20 (Xinhua) -- The Stock Exchange of Hong Kong (SEHK), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), published on Wednesday a consultation paper seeking public feedback on proposals to expand local existing listing system to permit listings of specialist technology companies, according to news posted on HKEX's website.
SEHK announced that the new rules, whose market feedback is sought over a two-month consultation period starting from Wednesday, would apply to companies in one of five specialist technology industries, namely, next-generation information technology, advanced hardware, advanced materials, new energy and environmental protection, and new food and agriculture technologies.
Nicolas Aguzin, chief executive officer of HKEX said that connecting capital with opportunities sits at the core of HKEX's strategy and these new proposals would expand the range of companies that could access the deep, liquid and international markets in Hong Kong Special Administrative Region (HKSAR) and offer investors even greater choice.
Under the proposed regime, specialist technology companies will be categorized into commercial companies and pre-commercial companies, with more stringent requirements for pre-commercial companies given their risk profile.
According to SEHK, a specialist technology company is a company primarily engaged in the research and development of, and the commercialization and/or sales of, products and/or services that apply science and/or technology within an acceptable sector of a specialist technology industry.
A commercial company means a specialist technology company that is able to meet the proposed commercialization revenue threshold at the time of listing while a pre-commercial company means a specialist technology company which has not yet met the commercialization revenue threshold at the time of listing.
As Securities Times reported, specialist technology companies which desire to go public on Hong Kong market currently primarily face challenges in meeting the profitability, revenue or cash flow requirements for qualifications for main board listing and reaching consensus with other market participants in valuation.
SEHK outlined in the announcement key proposals on qualifications for listing, initial public offering (IPO) requirements and post-IPO requirements written in the consultation paper.
Regarding qualifications for listing, it sets the minimum expected market capitalization at listing at eight billion Hong Kong dollars for commercial companies and 15 billion Hong Kong dollars for pre-commercial companies.
For IPO requirements, SEHK requires in the consultation paper an optimized price discovery process, a minimum free float of at least 600 million Hong Kong dollars upon listing and disclosures including those on pre-IPO investment obtained, commercialization status and prospects, and appropriate warning statements.
HKEX is one of the world's major exchange groups, and operates a range of equity, commodity, fixed income and currency markets. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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