Hong Kong Chief Executive John Lee Ka-chiu announced in his first policy address on Wednesday that Hong Kong Exchanges and Clearing (HKEX) will allow big tech companies that are not yet profitable to raise funds. It is the largest reform of its kind in Hong Kong since 2018. The new rules will apply to five types of specialist technology companies, including next-generation information technology, advanced hardware, new materials, new energy, and new food and agriculture technologies. According to a consultation paper published by HKEX on Wednesday, pre-commercial big tech companies eyeing a listing in HKEX need to have a valuation of at least HK$15 billion ($1.9 billion), with R&D expenses accounting for more than 15% of operating cost. The paper added that the valuation could be as low as HK$8 billion if the company’s revenue in the latest fiscal year exceeds HK$250 million. The public comment period will end on Dec.18. [HKEX]
