SEHK’s new listing framework for Specialist Technology Companies

The Stock Exchange of Hong Kong Limited (the SEHK) launched a public consultation on the new listing regime for Specialist Technology Companies (STCs) in October 2022. Under the consultation, SEHK seeks to allow listing of STCs, which cannot meet the profit, revenue and cashflow requirements under the traditional listing path. They are usually still in the stage of research and development (R&D), yet to commercialise their products or services, or are otherwise unable to meet the tests under the traditional listing regime due to the nature of their businesses. It is believed that STCs would be an attractive option for investors in Hong Kong due to their high growth potential¹.

The consultation conclusion was published by SEHK on 24 March 2023. While majority of the consultation proposals have been adopted, some key changes have been made to take into account market responses. These include market capitalisation, R&D expenditure ratios, a benchmark on meaningful investments from Pathfinder Sophisticated Independent Investors and the required allocation of shares to independent price setting investors.

The new listing regime for STCs will be regulated under a new Chapter 18C (Ch 18C) of SEHK’s Main Board Listing Rules (MBLR) and its Guidance Letter on Specialist Technology Companies² (Guidance Letter or GL), which took effect on 31 March 2023. STCs and their sponsors can now submit formal pre-IPO enquires as well as filing listing applications under this new listing framework³. 

This article gives you an analysis of the listing and post-listing requirements under this new regulatory framework adopted by SEHK for STCs.