In an effort to elevate Hong Kong’s position as the listing venue of choice for innovative companies from around the world, the Hong Kong Stock Exchange (HKEx) published a consultation paper proposing a new listing regime for companies belonging to one of five Specialist Technology Industriesi, namely: (a) next-generation information technology; (b) advanced hardware; (c) advanced materials; (d) new energy and environmental protection; and (e) new food and agriculture technologies.
The consultation paper was released soon after Hong Kong Chief Executive delivered his 2022 policy address vowing to enhance Hong Kong’s competitiveness in financial services by facilitating large-scale advanced technology enterprises to list on the Main Board of the HKEx and to attract talents.
As stated in the consultation paper, Hong Kong lags behind the US and Mainland China in terms of the number and market capitalisation of companies belonging to the Specialist Technology Industries – the number of Specialist Technology issuers (and their combined market capitalisation) in the US, Mainland China and Hong Kong markets as of 9 September 2022 are 738 (HK$85.4 trillion), 451 (HK$15.3 trillion) and 99 (HK$3 trillion), respectively.
Under the new proposed regime, no minimum profits requirement is imposed for listing of Specialist Technology Companies on the Main Board but other eligibility requirements may differ depending on their degree of commercialisation.
The eligibility requirements for “Commercial Companies” (those with at least HK$250 million in revenue arising from their Specialist Technology business segment for the most recent audited financial year) and for “Pre-Commercial Companies” (those that have not yet met the threshold) are set out below:
Subject to the above, both Commercial Companies and Pre-Commercial Companies must satisfy the following requirements to qualify for listing:
In addition, during or after the initial public offering (IPO), the following applies for both Commercial Companies and Pre-Commercial Companies:
It is expected that new listing regime for Specialist Technology Companies will be implemented early next year. The public comment period ends on 18 December 2022.
i HKEx intends to publish a guidance letter on the acceptable industries and sectors that would fall within that definition, which will be updated from time to time to incorporate newly emerging industries and the latest technology trends into the scope of the Specialist Technology Regime.
ii The prescribed minimum percentage holding by SIIs varies depending on applicant’s expected market capitalisation at listing:
20%
iii The proposed new initial allocation and clawback mechanism specific to Specialist Technology Companies:
5%
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