Proposed HKEX Listing Regime of Specialist Technology Companies

On 19 October 2022, the Stock Exchange of Hong Kong Limited (the “HKEX”) published a Consultation Paper on Listing Regime for Specialist Technology Companies (the “Consultation Paper”), which seeks to invite comments on the proposed new regime for listing of Specialist Technology Companies on the HKEX.
What are Specialist Technology Companies?
The HKEX proposes to define a “Specialist Technology Company” as “a company primarily engaged in the research and development of, and the commercialisation and/or sales of, Specialist Technology Product(s)[1] within an acceptable sector of a Specialist Technology Industry (see below)”.
The following are the proposed initial Specialist Technology Industries and their respective acceptable sectors:

Proposed Qualifications for Listing and IPO Requirements
Depending on whether the Specialist Technology Companies have achieved meaningful commercialisation of accepted products, the following table sets out the proposed key requirements as to the qualifications for listing of Commercial and Pre-Commercial Specialist Technology Companies:

The following table sets out the proposed key IPO requirements of Specialist Technology Companies:

Post-IPO Requirements
Upon listing, Specialist Technology Companies are subject to the following proposed key requirements:

For all of the proposed requirements, please find the full text of the Consultation Paper in the following link:
https://www.hkex.com.hk/-/media/HKEX-Market/News/Market-Consultations/2016-Present/October-2022-Specialist-Technology-Co/Consultation-Paper/cp202210.pdf
Conclusion
The proposed listing regime for Specialist Technology Companies is intended to diversify the HKEX’s mix of listed companies, especially in industries to which a relatively smaller number of listed companies belong when compared to other markets such as the US and Mainland of China. In order to address the issues of Specialist Technology Companies, such as their valuation, commercialisation, and reliance on external funding, the HKEX has proposed various qualification requirements for listing, IPO requirements and post-IPO requirements which are different from the traditional requirements. In line with the previous implementation of SPAC and Biotech Company listing regimes, the HKEX puts emphasis on reliable pre-IPO investment and increases the market capitalisation requirement for listing applicants under these new listing regimes.
Indeed, whether the aforementioned modified requirements for the proposed listing regime would suffice for addressing the market’s concerns on the listing of Specialist Technology Companies remains to be seen, especially in anticipation of market participants’ comments towards the proposed listing regime during the consultation period ending on 18 December 2022. Meanwhile, we will keep a close eye on the latest developments of the proposed listing regime and will endeavour to provide relevant updates once available.
【Endnote】
[1] Specialist Technology Product: the product and/or service (alone or together with other products or services) that applies Specialist Technology (i.e. science and/or technology applied to products and/or services within an acceptable sector of a Specialist Technology Industry)
[2] Pathfinder Sophisticated Independent Investors: sophisticated independent investors investing into the listing applicant at least 12 months prior to the listing application, each holding 5% or more of the issued share capital of the listing applicant of shares or securities convertible into shares as at the date of listing application and throughout the pre-application 12-month period