IPOs on road to recovery as HKEX vets 106 applications
Finance | Nancy Li 26 Jul 2024Nancy Li
Hong Kong Exchanges and Clearing (0388) is currently processing 106 listing applications, said HKEX chief executive Bonnie Chan Yi-ting at a forum in Shenzhen yesterday, with some mainland tech firms showing interest in listing in Hong Kong, suggesting a recovery in the initial public offering market.
Forty new stocks have been listed in HKEX since this year, which is the third most in the world, Chan added.
As many tech companies need to invest heavily in research and development, HKEX decided to introduce Chapter 18C in its listing rules, which enables firms to seek financing in the market early on in their life cycle.
One company has already been listed last month through 18C and many others are preparing IPO applications, Chan said.
The new rule allows specialist technology companies that are unable to satisfy the profit test to apply for IPOs in Hong Kong.
State-owned venture capital company Shenzhen Capital Group has invested in a robotic research company, which in turn is applying for an IPO under Chapter 18C.
China Reform Holdings, a central state-owned enterprise specializing in promoting SOE reforms, said its long-term investment strategy is to invest in small companies that specialize in hard technologies.
Head of innovation and technology of Invest Hong Kong, Andy Wong Wai-cheuk, said that, beyond Chapter 18C, the government has established various funds and provisions to support R&D, the promotion of commercialization and the new industrialization acceleration scheme.
Meanwhile, Zhizi Automotive Technology, a mainland tech firm, plans to establish a research and development centre for hydrogen vehicles and expects to list in the city next year, according to its co-founder.
