The new Road to IPO platform, announced last Friday, aims at connecting high-potential tech firms with global investors as well as financial, legal and business experts to help the companies go public, according to a joint statement from HKEX and HKSTP.
What exactly they mean by “high-potential” is unclear. But what has become clear is that there is now a real possibility the HKEX will start seeing more technology listings on its board. And the fact that it is working with HKSTP has given some much needed definition to what it is to come.
Hong Kong Science Park has more than 630 tech companies, and HKSTP is home to more than 260 start-ups in its incubation programme. The body focuses on developing companies from the biomedical, electronics, green technology, information and communication technology, and material and precision engineering sectors.
HKEX and HKSTP’s tie-up has started strong. They gathered a wide range of guests, including successful tech companies, famous investees, business angels, seed investors, venture capitalists and private equity firms to share their views on the various stages towards getting a listing.
The platform will also hold IPO-related workshops for tech firms, helping them put in place the right strategy, management team and corporate structure as part of going public. HKSTP will set up an enquiry hotline exclusively for tech companies needing IPO guidance, while HKEX will advise on listing requirements.
All this is certainly a boon for tech firms in the city. In the early stages, the Road to IPO platform is open to tech companies from the Science Park, HKSTP’s incubation programme and the TechnoPreneur Partnership Programme, before being opened to all tech firms in Hong Kong.
Slow and steady
In January this year, it floated the idea of a new board, where issuers wanting dual-class shares and not meeting the main board’s listing requirements can float. The HKEX plans to publish a paper in June seeking the market’s views on this, but it may find little solace in doing so.
Other Asian exchanges that have launched public consultations on introducing multiple classes of shares for IPOs have suffered strong pushback from investors. The Singapore Exchange for instance, which has a consultation running, was warned by a group of institutional investors in April that any dual-class set up would threaten the quality of the market.
Whether the HKEX would face similar issues is unknown, but for now a third board for tech firms is out of reach.
But through Road to IPO, the HKEX has taken an initial step towards its ultimate goal of becoming an international hub for tech investment and companies. The bourse’s chief executive Charles Li talked about start-ups and his wider aspirations in the same breath during the launch of the platform.
Li noted that the exchange already hosts a variety of tech companies but called on local tech start-ups to aim for IPOs to support their development, and subsequently announced his hopes to hear market views on a possible new board soon.
To compete with the likes of the Nasdaq as an international listing destination for tech companies is still some way off for Hong Kong. But by launching the new Road to IPO platform it has shown that it is capable of moving beyond talks to action, however small.