As the share price of zhonggai shares plummeted for days due to the “delisting storm”, the Listing Committee of the Hong Kong Stock Exchange said that it would review whether issuers with different voting rights are suitable to be listed on the Hong Kong stock exchange this year.
In addition to approving new listing applications, an important responsibility of the Listing Committee of the Hong Kong stock exchange is to provide policy opinions on listing matters to the listing section and approve the amendments to the main board rules and gem rules.
In addition to the relevant listing rules for issuers with different rights of the same shares, Bai Liren, chairman of the listing committee, said that the listing committee will also review the current IPO qualification requirements, especially some of which will make it difficult for some issuers / applicants from the professional technology industry to raise funds on the main board because they fail to pass the relevant qualification test, For example, companies that are not profitable but need funds for R & D.
welcome the return of China concept stock
In fact, after the major reform of the Hong Kong stock listing mechanism in 2018, enterprises with the same shares and different ownership structures can already apply for listing in the Hong Kong market, but the listing applicant needs to meet certain requirements, such as the applicant is an emerging or innovative enterprise; Then, after the system reform, it opened the channel for biotechnology companies that have not yet had income or profit to be listed in Hong Kong.
Nowadays, new economy stocks have become a force that can not be ignored in the Hong Kong stock market. According to the data of the Hong Kong stock exchange, by the end of 2021, new economy shares accounted for 21% of the total market value of Hong Kong stocks (22% in 2020), and the average daily turnover was HK $29.116 billion, accounting for 20% of the total turnover of the Hong Kong stock market (HK $17.777 billion in 2020, accounting for 17%).
This year, the HKEx also plans to further adjust the listing rules to meet the return of more Chinese concept shares. In its 2021 annual report, the listing committee said that in terms of prospectus and listing process this year, its key deliberations include reviewing the qualification requirements for initial public offering and whether issuers with different voting rights are suitable for listing on the Hong Kong stock exchange.
In fact, the HKEx has further optimized and simplified the listing system of overseas issuers last year, and the revised listing rules have officially come into force on January 1 this year.
Under the new rules, Greater China issuers without different voting rights structures can apply for secondary listing without proving that they are Chuang Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) companies, and the minimum market value at the time of listing is lower than the current provisions. Exempt Greater China issuers and non Greater China issuers who meet the conditions for secondary listing can choose to make Dual Major listing and retain their existing different voting structure and / or variable interest entity (VIE) structure.
Last year, in the context of geopolitical events, the HKEx also published guidance letters on the change of listing status, providing various guidance for secondary Listed Issuers (including greater China issuers listed on the US market). For example, most of the securities transactions of issuers were transferred from overseas exchanges to Hong Kong Voluntary conversion involves dual major listing on the HKEx and delisting from major listed overseas exchanges.
Earlier this month, when announcing the budget, Chen maobo, the financial secretary of the Hong Kong Special Administrative Region, also said that the risks and uncertainties faced by Chinese enterprises to be listed on the overseas market have increased, and Hong Kong is ready for the return of more Chinese concept shares, including allowing greater China companies that do not have different voting rights structures and are non-invasive Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) to be listed in Hong Kong for the second time, And give issuers with Dual Major listings greater flexibility. He believed that the relevant measures would further attract high-quality zhonggai shares to be listed in Hong Kong, enrich market options, increase market liquidity and enhance the competitiveness of the Hong Kong market.
relax the listing requirements of the main board
Another measure to help the return of China concept shares is to review the qualification requirements for initial public offerings.
The listing committee did not elaborate on the main content and direction of the review in its annual report. However, Bai Liren said that it would review the current IPO qualification requirements, which made it difficult for some issuers / applicants from the professional technology industry to be listed on the main board and raise funds because they failed to pass the relevant qualification test, such as companies that are not profitable but need funds for R & D.
The main board profit regulation is part of the robust qualitative and quantitative assessment used by the HKEx to determine whether the listing applicant is suitable for listing on the main board. Last year, the Hong Kong stock exchange just conducted market consultation on the profit regulations and raised the profit regulations by 60%. The relevant requirements also came into effect on January 1 this year.
Earlier this month, Chen maobo also revealed that the Hong Kong Securities Regulatory Commission and the Hong Kong stock exchange are reviewing the Listing Rules of the main board and providing financing channels for some technology enterprises engaged in advanced technology, with scale, requiring a lot of capital investment in research and development, but not yet profitable and lacking performance support.
In addition, the Listing Committee of the Hong Kong Stock Exchange also said that it was prepared to review the GEM market this year, including its positioning, market perception, and the feasibility of using it as an alternative listing platform for the main board. At the same time, consultation will be conducted on optimizing the IPO price discovery process and market infrastructure.
