Five tech sectors benefit as HKEX poised to relax rules

Hong Kong Exchanges and Clearing (0388) will amend its listing rules next month to allow pre-revenue or pre-profit tech firms to list in the city, Secretary for Financial Services and the Treasury Christopher Hui Ching-yu, said.

Hui said in a local radio program yesterday he hopes the new rules will attract firms in industries such as new energy or new materials.

HKEX completed a consultation in December paving the way for a new listing regime for tech firms. It will allow pre-revenue tech firms with a valuation of at least HK$15 billion and pre-profit ones with a valuation of HK$8 billion to go public in the financial hub.

For unprofitable firms currently to be listed on the main board, they need to have at least HK$4 billion in valuation, with at least HK$500 million in revenue annually.

This will be the biggest reform of its kind since 2018 when HKEX allowed tech firms with weighted voting rights and pre-revenue biotech start-ups to seek listings.

The new rules will apply to five sectors: next-generation information technology such as cloud computing and artificial intelligence, advanced hardware like semiconductors, self-driving vehicles, and metaverse, new materials, new energy, and new food and agriculture technologies.

PricewaterhouseCoopers said earlier this month that the accounting firm expected the reform could help attract artificial intelligence firms to the city amid the recent frenzy related to Open AI's chatbot ChatGPT.

Meanwhile, Hui said the government has been discussing with authorities in the Qianhai economic zone of Shenzhen to support the international private equity funds to access the mainland market.

Hui noted 600 private equity funds have been so far registered in Hong Kong after the government introduced a new registration regime for limited partnership funds to be established here in 2020. The increasing private funds have helped boost the demand for professional financial services, Hui added.

Regarding an upcoming forum that aims to attract family offices, Hui said a number of family offices across the world have been invited to participate in the event, adding the initial response was good.

The forum, which is titled "Wealth for Good in Hong Kong" will be held in late March.

Financial Secretary Paul Chan Mo-po said in his budget address last week that the government will allocate HK$100 million over the next three years to lure more family offices to Hong Kong.