The following are the basic requirements for listing equity securities on the main board of Hong Kong Stock Exchange.

(I) Financial Requirements:

A Main Board new applicant must have a trading record of not less than three financial years and meet one of the following three financial criteria:

1. Profit Test

  1. Profit Attributable to Shareholders is at least HK$50 million in the last 3 financial years (with profits of at least HK$20 million recorded in the most recent year, and aggregate profits of at least HK$30 million recorded in the 2 years before that.
  2. Market Cap is at least HK$200 million at the time of listing.

2. Market Cap/Revenue Test

  1. Market Cap is at least HK$4 billion at the time of listing.
  2. Revenue is at least HK$500 million for the most recent audited financial year.

3. Market Cap/ Revenue/ Cashflow Test

  1. Market Cap is at least HK$2 billion at the time of listing.
  2. Revenue is at least HK$500 million for the most recent audited financial year.
  3. Positive cashflow from operating activities of at least HK$100 million in aggregate for the three preceding financial years.

Note: The Exchange may accept a shorter trading record period and/or may vary or waive the above profit or other financial standards requirement.

(II) Acceptable Jurisdictions:

Applicants incorporated outside Hong Kong and other recognised jurisdictions seeking a primary listing on Main Board are assessed on a case-by-case basis and have to demonstrate they are subject to appropriate standards of shareholder protection, which are at least equivalent to those required under Hong Kong law. A roadmap that compromises a schedule of shareholder protection matters is set out in the attachment to the Joint Policy Statement dated 7 March 2007 to distil the key requirements for ensuring appropriate standards of shareholder protection from Exchange’s current approach.

(III) Accounting Standards:

  1. A new applicant’s accounts must be prepared in accordance with either Hong Kong Financial Reporting Standards or International Financial Reporting Standards.
  2. Banking companies must also comply with the Financial Disclosure by Locally Incorporated Authorised Institutions issued by the Hong Kong Monetary Authority.
  3. For Main Board new applicants, accounts of an oversea-incorporated issuer prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP) or other accounting standards may be acceptable by the Exchange under certain circumstances.

(IV) Suitability for Listing:

  1. Both the issuer and its business must, in the opinion of the Exchange, be suitable for listing.
  2. An issuer or its group (other than an investment company) whose assets consist wholly or substantially of cash or short-dated securities will not normally be regarded as suitable for listing, except where the issuer or group is solely or mainly engaged in the securities brokerage business.

(V) Operating History and Management:

A Main Board new applicant must have a trading record period of at least 3 financial years with:

  1. Management continuity for at least the 3 preceding financial years; and
  2. Ownership continuity and control for at least the most recent audited financial year.

Exception: Under the Market Cap/Revenue test, the Exchange may accept a shorter trading record period under substantially the same management if the new applicant can demonstrate that:

  1. Its directors and management have sufficient and satisfactory experience of at least three years in the line of business and industry of the new applicant; and
  2. Management continuity for the most recent audited financial year.

(VI) Minimum Market Capitalisation:

The expected market capitalisation of a new applicant at the time of listing must be at least HK$200 million.

(VII) Market Capitalisation of Public Float:

The expected market capitalisation at the time of listing of the securities of a new applicant which are held by the public must be at least HK$50 million.

(VIII) Public Float:

  1. At least 25% of the issuer’s total issued share capital must at all times be held by the public.
  2. Where the issuer has one class of securities or more, the total securities of the issuer held by the public at the time of listing must be at least 25% of the issuer’s total issued share capital. However, the class of securities for which listing is sought must not be less that 15% of the issuer’s total issued share capital, having an expected market capitalisation at the time of listing of not less than HK$50 million.
  3. The Exchange may, at its discretion, accept a lower percentage of between 15% and 25% in the case of issuers with an expected market capitalisation at the time of listing of over HK$10 billion.

(IX) Spread of Shareholders:

For issuers qualified for listing :

  1. The profit test or the market capitalisation/revenue/cashflow test: 300 shareholders
  2. The market capitalisation/revenue test: 1,000 shareholders
  3. Not more than 50% of the securities in public hands at the time of listing can be beneficially owned by the three largest public shareholders.

(X) Offering Mechanism:

  1. A new applicant may not list by way of placing only if there is likely to be significant public demand for its securities.
  2. The Main Board Listing Rules set out certain procedures to be adopted in the allocation of shares in initial public offerings. For further details, please see Practice Note 18 of the Main Board Listing Rules on Initial Public Offer of Securities.

(XI) New Issue Price:

Listing Rules do not impose conditions on the new issue price. However, new shares cannot be issued at a price below their nominal value.