Hong Kong Exchanges and Clearing Might Lower the Bar for Hard-Tech Listings

Hong Kong Exchanges & Clearing (HKEX) is reported to be discussing a system that will reduce the revenue requirements for hard-tech companies to go public.

The definition of hard-tech companies include new energy, software as a service, platform as a service, smart manufacturing and robotics, semiconductors, quantum computing, autonomous driving and artificial intelligence.

The exchange is said to be planning a new chapter 18C scheme to accommodate companies in sectors ranging from artificial intelligence and chips to autonomous vehicles and smart manufacturing.

It is anticipated that by this month itself, HKEX could be moving for a public consultation after the planning stage. This is in line with an aim to finalize the said plan by end of this year.

The newly proposed revenue requirement for commercial firms would be revised to the range of HK$200 million to HK$300 million compared to the current requirement of HK$500 million in addition to a market value of at least US$1 billion, under the proposal with the HKEX.

Whilst the market value requirement at the time of an IPO (initial public offering) would likely be more than US$2 billion for companies heading for commercialisation.

The city-state could play a larger role in attracting capital to support hard-tech company growth even as it tries to compete with other hubs to lure innovative startups as a result of decoupling of China and United States.

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