Hong Kong to support rocket, satellite IPOs as SpaceX-led sector takes off
Hong Kong aims to adjust listing rules to grab a share of initial public offerings (IPOs) by mainland China’s space companies as activity in the sector increases in line with Beijing’s priorities and heightened activity in the sector following the blockbuster June listing by Elon Musk’s SpaceX. That could lead to more head-to-head competition between the Hong Kong stock exchange and the Shanghai…
Hong Kong plans to adapt its listing rules to attract initial public offerings (IPOs) from China's growing space industry, as the sector expands with Beijing's focus and the recent successful IPO of Elon Musk's SpaceX. This move could intensify competition between Hong Kong and Shanghai stock exchanges, which are currently the top venues for such listings.
Hong Kong Exchanges and Clearing announced a consultation in the first half of next year to revise Chapter 18C of the city's listing rules to court space IPOs, aiming to consolidate Hong Kong's role as a financing hub for new economy enterprises. The proposed changes include reviewing the market capitalization threshold and easing requirements for research and development milestones, commercialization, and disclosure standards, given the long investment cycle and substantial capital demands in aerospace technology.
Edward Au Chun-hing, a Deloitte China managing partner, noted that authorities could lower shareholding or investment ratio thresholds for sophisticated independent investors and broaden the categories of recognized senior investors to help the market conduct reasonable valuation and validation. Hong Kong's excitement was sparked by the $75 billion Nasdaq listing of SpaceX, which has led to a space-technology boom in capital markets.
The Shanghai Stock Exchange recently allowed pre-revenue rocket makers to join its Nasdaq-style Star Market, drawing numerous companies. Hong Kong has also attracted peripheral aerospace firms, such as Shanghai Top Numerical Control Technology and Adaspace Technology. As of August, capital raised through IPOs in Hong Kong surpassed HK$340 billion, surpassing last year's total.
However, Hong Kong's exchange now trails the Nasdaq in global IPO venues. HKEX chairman Carlson Tong stated that the bourse operator is eager to collaborate with the Hong Kong government and other stakeholders to fulfill the government's strategic priorities and strengthen the city's position as a premier gateway for capital, opportunities, and ideas between China and the world.
Written by urgent.news from SCMP Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
