Hk Listing Requirement
The HK Exchange discusses the listing requirements of an IPO for two types of issuers, Growth Enterprise Market (GEM) and the Main board, this report will focus on the requirement for main board only:
The Profits/Revenue/Cash Flow requirement of a main board company: For a company to be listed in HK exchange, the company should have at least three years trading financial records as well as meet one of the following three financial criteria: 1. Profit test: the profit attributed to shareholders reached at least HK$50million in the last 3 financial years, with profit of at least HK$20million recorded for the recent year, and aggregate HK$30 million for the 2 years before. The company also needs to have at least HK$200 million capital at the time of listing. 2. Market cap/Revenue test: the company has at least HK$4 billion at the time of listing and revenue of at least HK$500 million for the most recent audited financial year. 3. Market cap/Revenue/Cash flow test: first, the company has at least HK$2 billion at the time of listing. Second, the company earned at least HK$500 million for the recent audited financial year. Last, the company has positive cash Flow from operating activities of at least HK$100 million in aggregate for the three preceding financial years.
Trading Record: the issuer is required to have a trading record of at least 3 financial years. However, if the company can demonstrate that the management has satisfactory experience in the line and business of the company for at least 3 years, and management continuity for the most recent financial years, the trading period may be shorten.
Spread of shareholders: For main board applicants, the equity securities in the hands of public should be held among at least 300 holders.
Accounting standards: A new applicant’s account must be prepared in accordance with either HK financial reporting standards or IFRS. Banking companies must also comply with the Financial Disclosure by Locally
The Profits/Revenue/Cash Flow requirement of a main board company: For a company to be listed in HK exchange, the company should have at least three years trading financial records as well as meet one of the following three financial criteria: 1. Profit test: the profit attributed to shareholders reached at least HK$50million in the last 3 financial years, with profit of at least HK$20million recorded for the recent year, and aggregate HK$30 million for the 2 years before. The company also needs to have at least HK$200 million capital at the time of listing. 2. Market cap/Revenue test: the company has at least HK$4 billion at the time of listing and revenue of at least HK$500 million for the most recent audited financial year. 3. Market cap/Revenue/Cash flow test: first, the company has at least HK$2 billion at the time of listing. Second, the company earned at least HK$500 million for the recent audited financial year. Last, the company has positive cash Flow from operating activities of at least HK$100 million in aggregate for the three preceding financial years.
Trading Record: the issuer is required to have a trading record of at least 3 financial years. However, if the company can demonstrate that the management has satisfactory experience in the line and business of the company for at least 3 years, and management continuity for the most recent financial years, the trading period may be shorten.
Spread of shareholders: For main board applicants, the equity securities in the hands of public should be held among at least 300 holders.
Accounting standards: A new applicant’s account must be prepared in accordance with either HK financial reporting standards or IFRS. Banking companies must also comply with the Financial Disclosure by Locally