Capital Markets Quarterly

Capital Markets Quarterly - January 2026

2026-01-12

Howse Williams’ Capital Markets Quarterly aims to provide you an overview of the various regulatory and market updates in the fourth quarter of 2025, with summaries of some of the key amendments in the rules and guidelines, as well as important decisions made by the regulatory authorities in Hong Kong. We will also highlight some of the major market transactions over the last 3 months.

A) Regulatory Updates

The Stock Exchange of Hong Kong Limited (the "Exchange")

Amendments to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (the "Listing Rules")

On 17 December 2025, the Exchange published conclusions to its consultation on ongoing public float requirements in relation to the conclusions and further consultation paper on “Proposals to Optimise IPO Price Discovery and Open Market Requirements” published on 1 August 2025. Having received support from a significant majority of respondents, the Exchange has adopted the proposals outlined in that paper broadly as consulted, with minor modifications.

The key reforms adopted include:

An alternative ongoing public float threshold: issuers may choose to comply with an alternative threshold (instead of the percentage threshold prescribed at the time of listing) to maintain a public float representing (a) at least 10 per cent of total issued shares in the listed class and (b) a market value of over HK$1 billion, to have more flexibility to conduct transactions for capital management purposes (e.g. share repurchases);

A bespoke ongoing public float requirement for A+H issuers: public float of H shares must represent at least 5 per cent of total issued shares in the class to which H shares belong (i.e. A shares and H shares), or have a market value of over HK$1 billion, to ensure a “critical mass” of H shares remains in public hands on an ongoing basis;

New regular public float reporting requirements for all listed issuers, as well as additional public float disclosure obligations and a restriction from corporate actions for those issuers with public float shortfalls, to enhance transparency and encourage timely restoration of public float; and

Identifying issuers with a significant public float shortfall with reference to their public float market value and percentage. These issuers will be identified by a stock marker (“-PF”) at the end of their stock name, instead of being suspended. Such issuers will be delisted if they fail to restore public float within 18 months (GEM: 12 months).

The above Listing Rule amendments came into effect on 1 January 2026 and apply to all listed issuers.

A copy of the Consultation Conclusions paper is available here.

Update to Guidance Letter, FAQs and Guide for New Listing Applicants (“Guide”)

The Exchange published a new Guidance Letter HKEX-GL121-26 to provide guidance to listed issuers on their public float continuing obligations under the Listing Rules. Guidance is provided on the calculation of market value for applicable thresholders, regular reporting obligations, public float shortfall and Issuers with shares listed on a PRC stock exchange.

In particular, Issuers are subject to regular public float disclosure obligations under MB Rules 13.32D and 19A.28D (GEM Rules 17.37D and 25.21D), as summarised below:

Reporting obligation	Monthly returns	Annual reports
Confirmation of compliance with the applicable ongoing public float threshold	All issuers	All issuers
Minimum public float percentage threshold	Issuers relying on the Initial Prescribed Threshold	Issuers relying on the Initial Prescribed Threshold
Actual public float percentage	Issuers relying on the Market Value Thresholds	All issuers
Actual public float market value	Issuers relying on the Market Value Thresholds	Issuers relying on the Market Value Thresholds
Share ownership composition	Not applicable	All issuers
Share capital structure	Not applicable	All issuers

Where an issuer’s public float falls below the applicable public float threshold, it must take active steps to restore its public float in a timely manner. The board of the issuer should promptly devise and announce a concrete and viable restoration plan, which should include a clear timeframe in respect of each stage of work under the plan to demonstrate that the required minimum public float will be restored within a reasonable period. The Exchange may give guidance to issuers on the adequacy of their plans and comment on their timeframe, where appropriate. However, it is the issuer’s obligation to devise an effective restoration plan to ensure re-compliance with the applicable ongoing public float threshold.

A copy of the Guidance Letter is available here.

The Exchange’s Disciplinary Actions

In the fourth quarter of 2025, the Exchange published sanctions in 6 cases which involve (i) transactions involving connected parties or failure to disclose and comply with procedural requirements, and (ii) directors’ failure to safeguard listed issuer’s interests, discharge directors' duties and obligations under the Listing Rules and cooperate in investigations, and (iii) deficiencies in the listed issuer’s internal controls and risk management systems. Listed issuers should exercise caution and put in place proper check and balance, and transaction monitoring mechanisms.

News release date	Issuer/ directors involved – summary of conduct
25 November 2025	Target Insurance (Holdings) Limited (Delisted, Previous Stock Code: 6161) and Six Directors At the material time, the listed issuer was a long suspended company with its shares having been suspended from trading since 2022. It was required to, among others, demonstrate that it had a sufficient level of operations to warrant its continued listing and resume trading by 4 July 2023. It would otherwise be delisted. Between 3 March and 5 June 2023 (a few months before the trading resumption deadline), the listed issuer published a series of announcements (Announcements) about its proposed new insurance business in the United Arab Emirates (UAE) and resumption prospects. The Announcements were approved for publication by the listed issuer’s board at the relevant time. However, these Announcements were materially inaccurate and incomplete and gave a misleading impression about the listed issuer’s state of readiness to develop the insurance business in the UAE. The listed issuer was found to have performed only preliminary due diligence on the relevant licensed insurer, and was inadequate to ascertain its licensing position, the scope of its permitted operations, the applicable regulations and the procedures for renewing the business licence. The directors demonstrated a reckless disregard for the accuracy of the Announcements. In addition to public censures made, a Prejudice to Investors’ Interests Statement was imposed against each the six directors of the listed issuer at the time of delisting.
18 November 2025	Two Directors of Narnia (Hong Kong) Group Company Limited (Delisted, Previous Stock Code: 8607) The Exchange conducted an investigation concerning whether the directors discharged their directors’ duties. As part of the investigation, the Exchange sent investigation and reminder letters to each of them. They responded to some but not all of the Exchange’s enquiries. In addition to a public censure, a Director’s Unsuitability Statement was imposed against each the two directors of the listed issuer at the time of delisting.
11 November 2025	KWG Group Holdings Limited (Stock Code: 1813), Six Current Directors and a Former Company Secretary This case concerns the listed issuer’s prolonged delay in despatching an information circular for two major transactions, and persistent failure to respond to the Exchange’s enquiries within the time limit imposed. The Exchange found that the relevant directors had failed to discharge their directors’ duties, and did not use their best endeavours to procure the listed issuer’s compliance with the Listing Rules. The listed issuer’s authorised representatives at the material time, failed to act as the listed issuer’s principal channel of communication with the Exchange by ensuring the Exchange’s correspondence and enquiries were brought to the attention of the listed issuer’s board of directors (Board). The company secretary, also failed to properly advise and assist the Board in the listed issuer’s compliance with the Listing Rules. His action and omission caused the listed issuer’s breaches of the Listing Rules. Censures were made against the listed issuer, and six current directors and a former company secretary The Exchange further directed the six directors and former company secretary to attend 18 hours of training on regulatory and legal topics and Listing Rules compliance, including at least three hours on each of (i) directors’ duties; (ii) the Corporate Governance Code and (c) the Chapter 14 requirements, within 90 days.
4 November 2025	All Nation International Group Limited (Delisted, Previous Stock Code: 8170), Six Former Directors and Chief Operating Officer This disciplinary action marks the first case in which the Exchange has disciplined senior management of a listed issuer for causing contravention of the Listing Rules, since the relevant Rule changes in 2021. Between July and October 2022, the chairman, executive director and substantial shareholder of the listed issuer, procured the listed issuer’s two subsidiaries in the PRC to enter into a purported tenancy agreement and a purported purchase agreement, and to make payments thereunder. These transactions were found to be fictitious, lacking in commercial substance, and/or a fraudulent scheme to disguise the misappropriation of a substantial portion of the Group’s funds. Members of the listed issuer’s board failed to take an active interest in the Group’s PRC operations. They allowed the listed issuer to have no or ineffective internal controls on the Group’s PRC operations, including contract approvals and payment authorisation. They also failed to identify or take proper follow-up action on multiple red flags arising from the tenancy agreement and/or the purchase agreement. A senior management of the listed issuer, was responsible for overseeing the Group’s sub-leasing business and providing board members with adequate information to enable them to make informed decisions. In the course of his duties, he discovered that the purported landlord named on the agreement was not the owner of the relevant premises. However, he omitted to report such concerns to the board in a timely manner. As a result, the board was not properly apprised of the matter, and approved an announcement which contained an inaccurate statement about the premises. Censures were made against the listed issuer, six former directors and a chief operating officer (COO) at the time of the listed issuer’s delisting. Director Unsuitability Statements and a Prejudice To Investors’ Interests Statement were imposed, and the Exchange further directed the COO to attend 17 hours of training on regulatory and legal topics and GEM Listing Rule compliance, including (i) directors’ duties; (ii) the Corporate Governance Code; and (iii) GLR 17.56 of the GEM Listing Rules.
23 October 2025	Two Former Directors of Universal Star (Holdings) Limited (Delisted, Previous Stock Code: 2346) At the time of the listed issuer’s listing in May 2019, two former directors failed to disclose 13 outstanding loans involving a subsidiary of the listed issuer (as co-borrower or guarantor) to the sponsor or the other directors of the listed issuer. The loans constituted material financial liabilities of the Group, but were not disclosed in the listed issuer’s prospectus. The loans remained outstanding as of August 2020. Without the approval or knowledge of the other directors of the listed issuer, the former director caused the same subsidiary to pledge its property to secure the loans. Neither one of the former directors, who was aware of and involved in the pledge, procured the listed issuer to consult its compliance adviser before the pledge was provided. The pledge constituted a major and connected transaction of the listed issuer and should be disclosed and made conditional on independent shareholders’ approval under the Listing Rules. Neither one of the former directors procured the listed issuer to comply with these requirements. A Prejudice to Investors’ Interests Statement and censures were imposed against each of the two former directors.
8 October 2025	Orient Securities International Holdings Limited (Stock Code: 8001) and Six Former Directors This case involves serious failures of the board to appropriately manage and supervise the listed issuer’s money lending business. Despite increasing defaults of borrowers and auditors raising red flags as to the enforceability of loans, the listed issuer’s directors failed to act and safeguard the listed issuer’s assets which led to significant impairment losses for the listed issuer. Between 2015 and 2022, the listed issuer granted and extended loans totalling HK$378 million (inclusive of interest) to individual clients. The listed issuer only conducted high-level due diligence before granting or extending the loans and failed, among other things, to ensure that loan collateral in the form of properties in the PRC was properly registered to enable the listed issuer to enforce the collateral in case of default. The listed issuer’s auditor had alerted the listed issuer’s audit committee about the non-registration of the loan collateral as early as 2018 and advised them to communicate with the listed issuer as this would materially affect the enforceability of the collateral. Despite repeated reminders by the auditors and the borrowers failing to substantially repay the loan principal and interest over the course of several years, the listed issuer and its directors consistently failed to take adequate steps to safeguard the listed issuer’s assets. Instead, the loans were continuously extended. Ultimately, all the borrowers defaulted on the loans causing the listed issuer to make an impairment provision of HK$145 million for FY2022/23. As at 31 March 2024, the total impairment losses recognised amounted to HK$181 million for FY2023/24. Censures were made against the listed issuer and four former directors. Criticises were made against two other former directors. Director Unsuitability Statements and a Prejudice To Investors’ Interests Statement were imposed, and the Exchange further directed two of the former directors to attend 18 hours of training on regulatory and legal topics and Listing Rule compliance, including at least three hours on each of (i) directors’ duties; (ii) the Corporate Governance Code; and (iii) the Listing Rule requirements for Chapter 19.

Securities and Futures Commission (the “SFC”)

Takeovers Bulletin No. 75

Securities held by connected EPTs for and on behalf of non-discretionary clients

Rule 35.4 of the Takeovers Code provides that securities owned by an exempt principal trader (EPT) connected with an offeror or the offeree company must not be voted in the context of the relevant offer. Rule 35.3 of the Takeovers Code further provides that an EPT connected with an offeror must not assent to the offer until such offer becomes or is declared unconditional as to acceptances.

The SFC would normally disapply Rules 35.3 and 35.4 in respect of the securities that a connected EPT holds as simple custodian for and on behalf of non-discretionary clients, where contractual arrangements are in place to strictly prohibit the EPT from exercising any discretion in voting with such securities or tendering them for acceptance of an offer.

Practice Note 9 has been amended to summarise the SFC’s practice regarding securities held by connected EPTs as simple custodian for non-discretionary clients

A copy of the Takeovers Bulletin is available here.

B) Market Update

In line with the gradual recovery trend observed during the first three quarters of 2025, there were 169 new Main Board applications accepted by the Exchange and 50 IPOs launched in the fourth quarter of 2025 that consists of a diverse range of businesses. Examples of some of the recent Main Board listings are:

Issuer	Description
OneRobotics (Shenzhen) Co Ltd (Stock Code: 6600)	A China-based company principally engaged in the research, development, production, and sales of home robotic systems. The Company's products mainly include execution-enhanced robots and perception and decision-making systems. Its retail offering was over-subscribed by 253.5 times with estimated net proceeds from the IPO of approximately HK$1.54 billion. To date, its market capitalisation is approximately HK$17.92 billion.
HashKey Holdings Ltd (Stock Code: 3887)	An investment holding company principally engaged in the provision of digital asset financial services. Its retail offering was over-subscribed by 392.7 times with estimated net proceeds from the IPO of approximately HK$1.48 billion. To date, its market capitalisation is approximately HK$18.47 billion.
Chuangxin Industries Holdings Ltd (Stock Code: 2788)	A company principally engaged in production and sales of electrolytic aluminum and alumina. Its retail offering was over-subscribed by 446.2 times with estimated net proceeds from the IPO of approximately HK$5.31 billion. To date, its market capitalisation is approximately HK$42.99 billion.
Softcare Limited (Stock Code: 2698)	A United Arab Emirates-based sanitary products company. Its retail offering was over-subscribed by 1,812.8 times with estimated net proceeds from the IPO of approximately HK$$2.23 billion. To date, its market capitalisation is approximately HK$20.04 billion.
Vigonvita Life Sciences Co Ltd (Stock Code: 2630)	A China-based company mainly engaged in the discovery, development and commercialization of small molecule drugs. Its retail offering was over-subscribed by 6,237.4 times with estimated net proceeds from the IPO of approximately HK$527.4 million. To date, its market capitalisation is approximately HK$5.46 billion.
Sany Heavy Industry Co Ltd (Stock Code: 6031)	A China-based company principally engaged in research, development, manufacture, sale and service of construction machinery. Its retail offering was over-subscribed by 51.9 times with estimated net proceeds from the IPO of approximately HK$13.31 billion. To date, its market capitalisation is approximately HK$16.29 billion.
Shanghai Zhida Technology Development Co Ltd (Stock Code: 2650)	A China-based company primarily engaged in the home EV (electric vehicle) charging station business. Its retail offering was over-subscribed by 5,439.8 times with estimated net proceeds from the IPO of approximately HK$326.6 million. To date, its market capitalisation is approximately HK$12.08 billion.

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Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide legal advice. Please contact [email protected] if you have any questions about the article.

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