Hong Kong’s new listing rules draw just two applications, far fewer than expected

One week after the listing reform was introduced, Hong Kong Exchanges and Clearing has received only two applications under the new rules, indicating that companies may be struggling to choose between Hong Kong and a rival China Depository Receipts (CDR) programme put forward on the mainland.

Chinese smartphone maker Xiaomi filed a Hong Kong listing application on Thursday, becoming the first to apply under the new rules which permit companies with multiple classes of shares.

Hangzhou-based Ascletis Pharma, which is close to commercialising a new drug to treat hepatitis C in China, became the first pre-revenue biotechnology company to apply when it submitted an application on Monday.

“It is very disappointing as the applications under the new listing rules are slower than expected,” said Christopher Cheung Wah-fung, a lawmaker who represents the financial services sector.

“The companies which plan to list under the HKEX’s new regime may take a wait-and-see approach to examine China’s CDR scheme. The valuation in Shanghai and Shenzhen is higher than in Hong Kong and they may like to take time to consider if they should list here or on the mainland. HKEX would need to do more promotion to attract these companies to list here,” Cheung said. 

HKEX chief executive Charles Li Xiaojia had indicated a dozen companies would likely be among the first batch to apply for a listing under the reform.