4 ASIAN LEGAL BUSINESS CHINA • 亚洲法律杂志-中国版 JUNE 2023 BIG STORY Hit by a prolonged IPO slump induced by three years of strict pandemic curbs, Hong Kong has been struggling to get its magic back as a listing powerhouse. However, Nicolas Aguzin, the CEO of Hong Kong Exchanges and Clearings, remains unfazed, touting several new connections and schemes to bolster Hong Kong’s capability to attract capital. One of those schemes is the Specialist Technology Company listing regime, which provides a new listing pathway for the rapidly growing tech sector. The new listing rules in Chapter 18C of the Main Board Listing Rules cover five “specialist technology industries.” Companies under these categories will be eligible to apply for listing on the Hong Kong Stock Exchange even if falling short of existing financial track record requirements. “The new regime significantly relaxes the amount of revenue a company must have to be eligible to list in Hong Kong. Specialist technology companies at the pre-commercial stage, who have not yet recorded any revenue, are now permitted to list,” explains Kai Sun, a corporate partner at Skadden, Arps, Slate, Meagher & Flom. “In addition, specialist technology companies at the commercial stage, who have recorded revenue, of at least HK$250 million [$32 million] for the most recent financial year, will also be permitted to list and will be subject to more relaxed rules compared with pre-commercial specialist technology companies,” Sun adds. Bosco Yiu, a corporate partner at Paul, Weiss, Rifkind, Wharton & Garrison, deems the absence of minimum profit requirement as the most significant provision. In addition, “the minimum revenue requirement is half of that, which is under the ordinary regime for ‘commercial companies,’ and no minimum profit nor revenue requirement for ‘pre-commercial companies,” notes Yiu. Furthermore, measures including the introduction of requirements regarding free or public float are also seen as something novel, according to Donnelly Chan, a corporate partner at Linklaters. “Free float” refers to the shares of a company that can be publicly traded in secondary market, as opposed to restricted shares and closely held shares. The new listing regime requires a portion of the stock’s shares with certain market capitalisation value not to be subject to any disposal restrictions at the time of listing. “We acknowledge the SEHK’s rationale of introducing this requirement, which is to ensure liquidity in the shares of specialist tech companies postlisting to aid price discovery for these companies where there are inherent difficulties to form a valuation, and also to ease market manipulation and price volatility concerns,” explains Chan. Lawyers believe the launch of the new listing regime aims to sharpen the comparative advantage of a traditionally popular listing venue intensely squeezed by the tech-savvy Shanghai STAR Market. John Moore, a capital markets partner at Slaughter and May, points out that some listing qualifications under the specialist tech regime are indeed more stringent than those of the STAR market, including higher market capitalisation thresholds and requirements on sophisticated independent investments. While being stamped with plentiful votes of confidence, the 18C regime is not without areas where improvement is hoped for. Yiu of Paul, Weiss is wary that a rule regarding price-setting independent investors may undercut the regime’s application. “As the regime starts rolling, the SEHK should consider the market responses to the requirement that at least 50 percent of the total number of IPO shares be allocated to independent price setting investors, as similar requirement under the SPAC listing regime may have contributed to its relatively slow development,” he says. Moore believes more discretion is needed when advising pre-commercial companies, “to demonstrate, with evidence, a credible path to commercialising their specialist tech products and achieving the relevant commercialisation revenue threshold.” Chan of Linklaters underscores the thorough understanding of the relevant technologies developed by the potential IPO applicant as instrumental in the listing process. Also, “law firms with capabilities in advising pre-IPO investments would also be well placed to serve potential applicants who will need to secure pathfinder sophisticated independent investors,” he adds. 作为亚洲的IPO中心,香港正试 图重建自身吸引力。港交所CEO欧冠 升对此信心十足,不断对外推广着港 交所新的互联互通及上市计划,希望 持续推动香港吸引资本的能力。此类 上市计划之一便是“特专科技公司上 市新规”。 欧冠升表示,未来香港将成为“ 亚洲首屈一指的生物科技领域融资市 场”,港交所《上市规则》第18C章所针 对的,则是五种新的“特专科技公司” ,这些企业即便尚未满足既有的公司 营收规定,也可以在港交所申请上市。 “对于来自特专行业的公司,新 规极大程度放松了赴香港上市的营收 要求。甚至未商业化的特专公司,就 是那些完全没有营收的公司,都可以 借此申请上市——在此之前,只有未 BY SARAH WONG 作者:黄婉君 HONG KONG’S CAPITAL MARKETS TRY TO LURE TECH FIRMS 香港资本市场意图吸引科技公司