• Cloud-based services
• Artificial intelligence

• Robotics and automation
• Semiconductors
• Advanced communication technology
• Electric and autonomous vehicles
• Advanced transportation technology
• Aerospace technology
• Advanced manufacturing
• Quantum information technology and computing
• Metaverse technology

• Synthetic biological materials
• Advanced inorganic materials
• Advanced composite materials
• Nanomaterials

• New energy generation
• New energy storage and transmission technology
• New green technology

• New food technology
• New agriculture technology

Requirements

Details

Minimum Expected Market Capitalisation at Listing

A Commercial Company must demonstrate a minimum expected market capitalisation of HK$6 billion at the time of listing.

A Pre-Commercial Company must demonstrate a minimum expected market capitalisation of HK$10 billion at the time of listing.

Revenue Threshold

A Commercial Company must have revenue of ≥ HK$250 million for the most recent audited financial year.

A Pre-Commercial Company is not required to fulfil any revenue threshold.

Source of Revenue

Only revenue arising from a company’s Specialist Technology business segment(s) (excluding any inter-segmental revenue from other business segments of the applicant), and not items of revenue and gains that arise incidentally or from other businesses, would be recognised for the purpose of the proposed Commercialisation Revenue Threshold.

Revenue Growth

A Commercial Company is normally expected to demonstrate a year-on-year growth of revenue throughout the track record period with allowance for temporary declines in revenue due to economic, market or industry-wide conditions or other factors which were temporary and outside of the applicant’s control.

The reasons for, and remedial steps taken (or to be taken) to address, any downward trend in the Commercial Company’s annual revenue must be explained to the Exchange’s satisfaction and disclosed in the listing document.

Minimum R&D Period

All Specialist Technology Companies must have been engaged in R&D for three financial years prior to listing.

Minimum R&D Expenditure

(i) On a yearly basis for at least two out of three financial years and (ii) on an aggregate basis over all three financial years prior to listing, Commercial Companies must have R&D investment amounting to at least 15% of total operating expenditure; Pre-Commercial Companies with revenue ≥ HK$150 million but

Operational Track Record and Management Continuity

Specialist Technology Companies must have been in operation in its current line of business for at least three financial years, prior to listing, under substantially the same management.

Ownership Continuity

There must be ownership continuity and control for all Specialist Technology Companies in the 12 months prior to the date of the listing application.

Minimum Third Party Investment

All Specialist Technology Companies must have received meaningful investment from sophisticated independent investors ("SIIs").

Definition of SII as indicative benchmarks only

To be considered as a SII, the investor must not be a core connected person, controlling shareholder, or founder(s) or their respective close associates of the applicant (excluding a person being connected only by virtue of being a substantial shareholder); and should generally meet the indicative size thresholds or qualification requirements of being (i) an asset management firm with AUM of, or a fund with a fund size of, ≥ HK$15 billion; (ii) a company having a diverse investment portfolio size of ≥  HK$15 billion; (iii) an investor of any of the types above with AUM, fund size or investment portfolio size (as applicable) of ≥ HK$5 billion where that value is derived primarily from Specialist Technology investments; and a key participant in the relevant upstream or downstream industry with a meaningful market share and size, as supported by appropriate independent market or operational data.

Definition of meaningful investment

As an indicative benchmark, an applicant meeting the following requirements will generally be considered as having received “meaningful investment”:

Investment from Pathfinder SIIs

At least two to five Pathfinder SIIs that:

a.       in aggregate hold ≥ 10% of an applicant’s issued share capital as at the date of listing application and throughout the pre-application 12-month period; or

b.       otherwise have invested an aggregate sum of ≥ HK$1.5 billion in the applicant’s shares at least 12 months prior to the date of listing application (excluding any subsequent divestments made on or before the date of the listing application);

Provided that at least two such Pathfinder SIIs:

a.       each holds ≥ 3% of an applicant’s issued share capital as at the date of listing application and throughout the pre-application 12-month period; or

b.       otherwise each has invested ≥ HK$450 million in the applicant’s shares at least 12 months prior to the date of listing application (excluding any subsequent divestments made on or before the date of the listing application).

The Exchange may accept shareholding fluctuations of the Pathfinder SIIs based on all relevant circumstances of a particular case. Please refer to the Guidance Letter for non-exhaustive examples where such fluctuations may be accepted.

Where a SII holds securities convertible into shares in an applicant, only the investment in the securities to be converted at, or before, listing will be counted towards satisfaction of the meaningful investment requirement.

Investment from all SIIs

All SIIs must have at least the following aggregate investment upon listing:

Requirements

Details

Primary Reason for Listing

A Pre-Commercial Company must have as its primary reason for listing the raising of funds for the R&D of, and the manufacturing and/or sales and marketing of, its Specialist Technology Product(s) to bring them to commercialisation and achieving the Commercialisation Revenue Threshold. Compliance with this requirement must be demonstrated by the Pre-Commercial Company’s planned use of proceeds. A Pre-Commercial Company is expected to have been engaged in R&D throughout the entirety of its track record period and will use part of the IPO proceeds for continuous R&D of its Specialist Technology Product(s).

Path to Commercialisation

A Pre-Commercial Company must demonstrate a credible path to achieving the Commercialisation Revenue Threshold and disclose the relevant timeframe, risks, impediments, underlying material assumptions in its listing document.

Enhanced Working Capital

A Pre-Commercial Company must have available working capital to cover ≥ 125% of its group’s costs (which consist of general, administrative, operating and production costs and R&D costs) for at least the next 12 months (after taking into account the IPO proceeds).

Requirements

Details

Minimum Allocation to Independent Price Setting Investors

Specialist Technology Company must ensure that ≥ 50% of the total number of shares is taken up by independent price setting investors which are (i) Institutional Professional Investors (as defined in Rule 18B.01 of the Listing Rules) and (ii) other types of investors with AUM, fund size or investment portfolio size of ≥ HK$1 billion, that are not existing shareholders of the applicant or a close associate of any of them or a core connected person of the applicant.

Initial Retail Allocation and Clawback Mechanism

A new initial retail allocation and clawback mechanism for Specialist Technology Companies will be put in place, under which, the minimum allocation of shares to the public subscription tranche shall be as follows:

1. an initial allocation of 5% of the shares offered in the IPO;

2. a clawback mechanism that increases the number of shares to 10% when the total demand for shares in the subscription tranche is ≥ 10 times but < 50 times the initial allocation; and

3. a clawback mechanism that increases the number of shares to 20% when the total demand for shares in the subscription tranche is ≥ 50 times the initial allocation.

Shares may be transferred from the subscription tranche to the placing tranche where there is insufficient demand in the subscription tranche.

Minimum Free Float

There must be a minimum free float of ≥ HK$600 million upon listing. Free float means shares that are not subject to disposal restrictions.

Offer Size

The offer size must be significant enough to facilitate price discovery or may not give rise to orderly market concerns.

Disclosure

Key areas of recommended disclosure in listing documents include: information on pre-IPO investment, burn rate, cash operating cost, products, commercialisation status and prospects, R&D activities, intellectual property and appropriate warning statements.

Subscription of IPO Shares by Existing Shareholders

Existing shareholders (including controlling shareholders) of a Specialist Technology Company are permitted to participate in its IPO provided that the company complies with the existing public float requirement, the requirement for minimum allocation to independent price setting investors and the minimum free float requirement mentioned above.

Requirements

Details

Post-IPO Lock-ups

Controlling shareholders of Commercial Companies and Pre-Commercial Companies will be subject to a 12 months’ and 24 months post-IPO lock-up period respectively.

Post-IPO lock ups (12 months for Commercial Companies and 24 months for Pre-Commercial Companies) will be imposed on key persons (including founders, the beneficiaries of weighted voting rights, executive directors and senior management, and key personnel responsible for the technical operations and/or R&D of the Specialist Technology Company).

Post-IPO lock ups (6 months for Commercial Companies and 12 months for Pre-Commercial Companies) will be imposed on Pathfinder SIIs.

Additional Continuing Obligations for Pre-Commercial Companies

The continuing obligations for Pre-Commercial Companies include additional disclosures in interim and annual reports on the progress made towards achieving the Commercialisation Revenue Threshold, and updates on any business and financial estimates provided in the listing document.

Pre-Commercial Companies must comply with Rule 13.24 regarding sufficient operations and must not carry out any transaction or arrangement that would result in a fundamental change in their principal business activities as described in the listing documents.