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Listing in Hong Kong

As a leading international financial centre, Hong Kong is one of the world’s most popular venues for listings and IPO fund-raising. Hong Kong has been ranked the 1st in the world for 3 times in the past five years in terms of IPO funds raised.

The Hong Kong Exchanges and Clearing Limited (HKEx), the frontline regulator of listed companies in Hong Kong, operates two stock markets, namely the Main Board and the Growth Enterprise Market (GEM). The Main Board is a market for more established companies, while the GEM is a market with lower listing eligibility criteria, serving the needs of small to mid-sized companies.

Listing Requirements

The following table summarises the key requirements for listing on the Main Board and GEM:

Main Board GEM
Key Requirements Key Requirements
- 25% free float minimum (can reduce to 15% if market cap > HK$10bn)
- Minimum 300 shareholders
- 3 years management continuity
- 1 year ownership continuity
- At least 3 independent directors and control representing at least - one-third of the board
- Semi-annual financial reporting
- 25% free float minimum (can reduce to 15% if market cap > HK$10bn)
- Minimum 100 shareholders
- 2 years management continuity
- 1 year ownership continuity
- At least 3 independent directors and control representing at least one-third of the board
- Quarterly financial reporting
Financial Requirements (Satisfy one of the below tests) Financial Requirements
 Profit Test- 3-year aggregate profit ≥ HK$50m
- Market cap ≥ HK$500m
- Positive 2-year aggregate OCF ≥ HK$30m
- Market cap ≥ HK$150m
Market Cap / Revenue Test- Latest year revenue ≥ HK$500m
- Market cap ≥ HK$4bn
Market Cap / Revenue / Cashflow Test- Latest year revenue ≥ HK$500m
- Market cap ≥ HK$2bn
- Positive 3-year aggregate operating cash flow (OCF) ≥ HK$100m

Source: HKEX

In April 2018, the HKEX took a step forward to broaden Hong Kong’s listing regime to companies in emerging and innovative sectors. The new regime (a) permits listings of biotech issuers that do not meet any of the Main Board financial eligibility tests; (b) permits listings of companies with weighted voting right (WVR) structures; and (c) establishes a new concessionary secondary listing route for Greater China and international companies that wish to secondary list in Hong Kong.

Listing Requirements

Generally speaking, starting from the time a listing intermediary is appointed, the process for listing in Hong Kong takes an average of about seven to 15 months, depending on the progress of each step. Enterprises applying for listing in Hong Kong must go through the following steps or procedures:

Chart: Listing Process in Hong Kong
Chart: Listing Process in Hong Kong

For more information on listing in Hong Kong, please visit the following webpages:
Main Board Listing Rules
GEM Listing Rules
Initial Listing Fees
Annual Listing Fees

 

Chart: Listing Process in Hong Kong
 
Content provided by Picture: HKTDC Research
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