According to recent consultation paper published by HKEx on 27 November 2020, it is proposed that the Profit Requirement under Main Board Rule to be increased as shown in below table:
Current Profit Requirement
Proposed Profit Requirement
Aggregate profits in last 3 years ≥ HK$50 million (with HK$20 million in the most recent year and HK$30 million in the preceding two years)
Aggregate profits in last 3 years ≥ HK$125 – 150 million (with HK$50 - 60 million in the most recent year and HK$75 - 90 million in the preceding two years)
Points to Note
The proposed increase in profit requirement for Main Board Listing may not be favorable to the companies with marginal profits. We expect there may be fewer IPO applications in the coming years as those companies may choose to be listed in overseas stock exchange with lower profit requirement.