Source: Network
After the major reform of the listing system in 2018, the Hong Kong Stock Exchange ushered in the opportunity to revise the listing rules again.
It is reported that the Hong Kong Stock Exchange issued a consultation document on the 19th, proposing to expand the existing listing system in Hong Kong to allow special technology companies to list in Hong Kong, and to solicit public opinions on this. The consultation period will end on December 18.
On the same day, Chief Executive of the Hong Kong Special Administrative Region Li Jiachao stated in his "Policy Address" that the competitiveness of Hong Kong's financial services will be comprehensively improved. The Hong Kong Stock Exchange will revise the listing rules next year to finance advanced technology companies that have not yet met the profit and transaction requirements. Provide convenience.
In other words, the biggest highlight of the Hong Kong Stock Exchange's revision of the rules is that the Hong Kong Stock Exchange has modified the main board listing rules to attract non-profit and non-revenue technology companies to list in Hong Kong. So far, the sluggish IPO atmosphere in 2022 has finally ushered in a long-lost excitement.
At the press conference held on the afternoon of October 19, Chen Yiting, director of listing of the Hong Kong Stock Exchange, revealed that if all goes well, the first batch of companies applying for listing under the new rules can apply for financial information in 2022, which means that these companies can be seen as soon as next year. listed.
Competing for five major technology industries
On October 19, Hong Kong's special chief executive, Li Jiachao, delivered his first policy address after taking office. In his policy address, he said that the competitiveness of Hong Kong's financial services will be comprehensively improved. The Hong Kong Stock Exchange will revise the listing rules next year to facilitate financing for advanced technology companies that have not yet met the profit and transaction requirements. In addition, HKEx plans to revive the GEM ( GEM ) market, providing an efficient financing platform for SMEs and start-ups. According to
data, the new regulations of the HKEx will apply to companies in five special technology industries, including new generation information technology, advanced hardware, advanced materials, new energy and energy conservation and environmental protection, new food and agricultural technology.
Specifically, the new generation of information technology includes cloud services, artificial intelligence; advanced hardware includes robotic automation, semiconductors, advanced communication technology, electric and autonomous vehicles, advanced transportation technology, aerospace technology, advanced manufacturing , quantum Technology, Metaverse, etc.; advanced materials include synthetic biology, smart glass, nanomaterials; new energy and energy conservation and environmental protection include new energy production, new energy storage and transmission technology, and green technology; new food and agricultural technologies include new food technology, New agricultural technology. The main recommendations of the
consultation paper also include five areas. First, in terms of the threshold of commercialization income, a commercialized company is defined as the income generated by the special technology business in the latest audited fiscal year of at least 250 million Hong Kong dollars.
Second, in terms of listing market value, the expected minimum market value at the time of listing is HK$8 billion (commercialized company) or HK$15 billion (non-commercialized company).
Thirdly, in terms of research and development, all applicants should be engaged in research and development for at least three fiscal years before listing, and the investment in research and development should account for at least 15% (commercialized companies) or 50% (non-commercialized companies) of the total operating expenses.
Fourth, in terms of third-party investment, the Hong Kong Stock Exchange requires listing applicants to obtain a considerable amount of investment from experienced independent investors.
Fifth, in terms of commercialization paths, uncommercialized companies should disclose in their listing documents their credible paths that can meet the commercialization income threshold.
Lowers the IPO Threshold The Hong Kong Stock Exchange has injected a stimulant
In recent years, the Hong Kong Stock Exchange has made a lot of reform attempts.
In 2018, the Hong Kong Stock Exchange carried out a "big change", allowing biotech companies that are mainly engaged in research and development, have at least one core product beyond the concept stage, and plan to go public to raise funds to commercialize the core product. Listed; allowed to be considered innovative Listing of issuers with weighted voting rights of property companies, enabling individual founders who have contributed significantly to the company’s rapid growth and success to retain control; and providing new preferential secondary listing channels for overseas issuers listed on qualifying exchanges, This enables Hong Kong investors to invest in these companies while retaining the most important safeguards of the Hong Kong regulatory system.
For more than 4 years, many new technology companies have landed on the Hong Kong Stock Exchange through the new listing chapter, which has also brought vitality to the market. It is reported that the listing reform in 2018 resulted in more companies from the healthcare and information technology industries being listed on the Stock Exchange. The information technology industry is currently the largest industry in the stock exchange market, and the healthcare and information technology industries together account for more than one-third of the total market value of the Hong Kong market.
with US SEC With the promulgation of the "Foreign Company Accountability Law", many Chinese companies that have gone overseas to go public have also opted for secondary listing and dual listing. The Hong Kong stock market has naturally become the first choice for Chinese companies. listing location. However, since the beginning of this year, affected by factors such as the Fed's rate hike, the shrinking of the balance sheet, and the epidemic, the Hang Seng Index has fallen sharply. As of October 19, the Hang Seng Index closed at 16,511.28 points, down 2.38%, a drop of nearly 30% during the year, and the weakness of the Hong Kong stock market is evident.
is not only that, with the increasingly fierce competition for listing in the international capital market, the Hong Kong Stock Exchange is also facing challenges from , Singapore Exchange, and other parties.
has continuously attracted Chinese companies through institutional innovation and efficient listing process, and the Singapore market has become popular overnight, and its REITs listing and bond issuance are also favored by Chinese companies.
At the same time, the Hong Kong Stock Exchange is also under the pressure of its own performance decline. On October 19, the Hong Kong Stock Exchange released the third quarterly report announcement. Revenue and other income in the first three quarters were HK$13.255 billion, down 18% year-on-year, and net profit fell 28% year-on-year to HK$7.099 billion.
's third-quarter net profit fell 30% year-on-year to HK$2.263 billion, while revenue and other income during the period fell 19% year-on-year to HK$4.318 billion. Excluding corporate capital investment and charitable fund income, the main business of the Hong Kong Stock Exchange in the third quarter Revenue fell 17% to HK$4.324 billion.
Source: Hong Kong Stock Exchange Announcement
In fact, the chill of Hong Kong stock IPOs is obvious to the market. Statistics show that in the first three quarters of 2022, the amount of equity financing in the primary market of Hong Kong stocks was 192.4 billion Hong Kong dollars, a decrease of 68.18% compared with the 604.6 billion Hong Kong dollars in the same period in 2021; of which, the IPO raised amount was only 73.2 billion Hong Kong dollars, compared with the same period last year. The 288.5 billion yuan was significantly reduced by 74.63%.
industry analysts said that the Hong Kong Stock Exchange will revise the listing rules this time, which will attract more qualified Chinese concept stocks to return to Hong Kong to list, and will also attract a number of special technology companies to list. This move will improve Hong Kong stocks. The competitiveness of IPO resources in the market and the consolidation of 's status as an international financial center are of great significance.
intends to allow retail investors to participate in investment The difference between
and SPAC ( special purpose acquisition company ) is that only professional investors can participate in the system, the introduction of special technology companies to be listed this time intends to allow retail investors to participate, but the Hong Kong Stock Exchange proposes to reduce the amount of publicity The initial proportion of the offering part will be 5%, so that the proportion of over-subscription will be dialed back to retail subscriptions from a maximum of 50% to 20%.
Chen Yiting said that retail investors can participate in investing in special technology companies, and many designs to protect investors will also be introduced, including pricing that is different from general IPOs, restrictions on lock-up periods, and additional disclosure requirements.
Chen Yiting mentioned that special technology companies are usually not profitable, or are in the early stage of commercialization, so it is not easy to reach a consensus on valuation, and the past valuation methods such as price-earnings ratio are not applicable. Therefore, the new rules suggest that IPO pricing or During price discovery, large-scale and experienced investors will have a certain right to speak, because relevant institutional investors have sufficient resources to deeply analyze the reasonable valuation of special technology companies, ensure that the pricing is at a reasonable level, and invest in the subscription of new shares. It is beneficial for those who include retail investors.
's first batch of special technology companies will be listed as soon as next year.
Chen Yiting said at the press conference that the market consultation on the new listing rules of special technology companies will last for two months, and plans to add a new "Chapter 18C" to the listing rules. ". After the consultation period, the market response and suggestions will be carefully and carefully analyzed, and the final version will be finalized as soon as possible, which is believed to be a very important task for the HKEx to implement next year.
Chen Yiting said that she had been in close communication with market participants before issuing the consultation document. She believed that many technology companies would be interested, but she did not have a "crystal ball", so it was difficult to predict the specific number. She said that if all goes well, the first batch of companies applying for listing under the new rules can apply with financial information in 2022, which means they can be listed as soon as next year.
Group Chief Executive Officer of HKEX said, "Connecting capital and opportunities is the core strategy of HKEX, and we are committed to further enhancing Hong Kong's status as the preferred listing location for global innovative companies. The new proposal will increase the types of Hong Kong listed companies, allowing moreMany different types of companies have access to this deep and liquid international market, while also giving investors more options.
"Just as the addition of a biotech chapter to the Listing Rules has shaped Hong Kong's healthcare financing ecosystem, we expect the addition of this new requirement for specialised technology will help drive growth in these five cutting-edge industries in the region and elsewhere. Growth in talent and investment (for example, in green technology)," said Eurovision.
Champion said that although financial data has fallen from the record set in the same period last year, and the spot market performance has continued to be weak, he also sees signs of recovery in the IPO market, brisk trading in the derivatives market, and continued performance of Shanghai-Shenzhen-Hong Kong Stock Connect and Bond Connect. strong. The Hong Kong Stock Exchange is ready for a rebound in the market.
Source: WeChat public account "Caizhi Toutiao" Comprehensive from: Jiemian News, The Paper, Yicai, Blue Whale Finance, etc.
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