Hong Kong makes new rules for specialist tech firm listings, cuts rev threshold

(Reuters) – The Hong Kong Stock Exchange (HKEX) said on Friday it had framed new listing rules for specialist technology companies, adopting a lower revenue threshold for these firms set out in earlier proposals.

The bourse operator, a unit of Hong Kong Exchanges and Clearing Ltd, said it would welcome applications operating in frontier industries, including new energy, robotics, semiconductors, quantum computing, autonomous driving, artificial intelligence and new food and agriculture technologies.

“The new economy sector is rapidly changing the way in which we live and work, and this new route to market will support some of the most innovative and progressive companies of the future,” HKEX CEO Nicolas Aguzin said.

The final rules, which are designed to make it easier for hard-tech companies to sell shares in the city and effective from March 31, allow lower thresholds set out in an earlier proposal.

A commercialised company should have no less than HK$6 billion ($764.38 million) in market capitalisation, according to the rules, lower than HK$8 billion stipulated in a consultation last October.

Such a firm should have revenue of at least HK$250 million for its most recent audited financial year, a sharp decrease from the current requirement of HK$500 million.

A pre-commercial company’s market value should not be less than HK$10 billion, against previously proposed HK$15 billion.

These rules are designed to retain the attractiveness of Hong Kong’s capital markets amid continued geopolitical tensions.

The new regime is friendlier and more attractive to U.S.-listed Chinese firms and seeking to float shares elsewhere amid political uncertainties, which helps them “mitigate potential risks associated with scrutiny from a single stock exchange”, China Renaissance Securities (Hong Kong) Chief Strategist Melody Lai said in a note.

HKEX raised $7.8 billion from IPOs last year, falling to the sixth largest listing venue globally from the third place in 2021.

($1 = 7.8495 Hong Kong dollars)