BDO aims to merge into challenge to Big Four firms

BDO, the fifth-biggest accounting firm in Hong Kong by revenue, is eyeing merger opportunities to go head-to-head with the Big Four, according to chairman Albert Au Siu-cheung.

Au has grown his firm through many acquisitions to about 1,000 employees from 160 since 1997. But he said future mergers would not follow the same pattern as before.

"In past mergers, we focused mainly on expanding our audit ability," he said.

"Looking ahead, we would like to merge with firms with consultancy or other specialised skill sets so as to diversify … and provide more comprehensive services to the customers. The ultimate goal is for us to challenge … the Big Four firms."

Analysts are not surprised at the shift in strategy, given that the number of initial public offerings (IPOs) has dropped substantially this year, bringing down demand for auditing services. Hong Kong has been the world's largest IPO market in the past three years, but this year it might drop out of the top 10 due to growing uncertainties about the euro-zone debt crisis and an economic slowdown on the mainland.

In the first eight months of this year, new listings raised just under HK$43 billion, down 77 per cent from about HK$190 billion over the same period last year. The amount was also a 10-year low for Hong Kong Exchanges and Clearing.