Exclusive | Hong Kong plans to relax valuation and track record rules for ‘specialist Big Tech’ to spur stock offers, sources say
- The minimum valuation for pre-revenue tech companies could be set between HK$10 billion and HK$12 billion, versus HK$15 billion in reform proposal
- The Chamber of Hong Kong Listed Companies supports lower thresholds to grease more tech IPOs, given the decline in tech valuations in the past year
Hong Kong’s stock market operator is expected to lower the proposed listing threshold for “specialist” technology companies as it dials up its overtures to allow eligible start-ups to raise funds in Asia’s third-largest capital market, according to two people familiar with the plan.
“The proposed listing chapter for specialist technology companies is part of HKEX’s ongoing work to further elevate the attractiveness and competitiveness of Hong Kong as an IPO destination,” an HKEX spokesman said, adding that the exchange is still working on the consultation conclusion. “We will publish the consultation conclusions and the final proposal in due course”.
Among other conditions, the stock exchange operator may require the IPO candidates to have at least one sophisticated investor in the previous 12 months as their core shareholder, instead of two professional parties, they added.
The lower thresholds were preferred as many market participants deemed the existing proposals too demanding for most technology companies, the sources said. Market situations have also changed over the past year as start-up valuations suffered during the pandemic.