Hong Kong exchange head clarifies listing rules as IPO hopes dim for cryptocurrency giant Bitmain
- Mining hardware sales accounted for 94 per cent of Bitmain’s total revenue in the first half of 2018
Companies seeking to go public in Hong Kong should show consistency in their business models, according to Hong Kong Exchanges and Clearing (HKEX) chief executive Charles Li Xiaojia, who was speaking on the sidelines of the World Economic Forum in Davos on Wednesday.
His comments were in response to media questions about the status of initial public offering (IPO) applications from the world’s biggest makers of cryptocurrency mining rigs – Bitmain Technologies, Canaan Creative and Ebang International Holdings.
The three Chinese companies filed to go public in Hong Kong last year, but a US$600 billion wipeout in the total market value of digital assets and a lack of regulatory framework in the industry have cast doubts on their fundraising plans.
Li did not comment specifically on the three IPO applications, but spoke broadly about the Hong Kong stock exchange’s general principles for listings.
The exchange will decide if applicants are “suitable” to go public based on their business models, according to Li.
“If a company made billions of US dollars through Business A, but suddenly said it will do Business B without showing any performance, or said Business B is better, then I don’t think the Business A featured in their application will be sustainable,” he was quoted as saying by Tencent Holdings' news portal.
“Besides, if regulators were hands off [on Business A] in the past but will regulate it in the future, will you be able to continue the business and still make money from it?” he added.