Clogged pipeline: Many Hong Kong IPO hopefuls near application expiration
More than 30 mainland Chinese firms face a deadline for regulatory approval in next two weeks, with one analyst comparing the process to a marathon
“The CSRC’s approval criteria are closely tied to national policy,” he said. “As of the first of this year as an example, industries that are “going global” – those that have significant overseas investments and an urgent need for capital support, such as [firms involved in] large-scale artificial intelligence models, robotics, semiconductors and biotechnology – have found it relatively easier and faster to obtain approval.”
If the 30-plus companies nearing the six-month deadline fail to pass their listing hearings in the next two weeks, they will be forced to update their financial data to restart their applications. SW Hong Kong has seen 12 of its own clients submit Hong Kong IPO filings this year, but only two have successfully secured the coveted CSRC clearance.
However, Lo said that expiration does not equate to failure. “Many companies that have successfully gone public have had their prospectuses lapse,” he said. “As long as the company’s fundamentals have not deteriorated, the process can still move forward after updating the information.”