Threshold lowered for mainland firms' HK IPOs

China Securities Regulatory Commission, the country's securities regulator, is to lower the threshold for Chinese mainland companies looking to go public in Hong Kong.

Officials said a specific plan will be announced soon, but industry insiders welcomed the move, suggesting it would help cut the number of companies waiting to list on mainland exchanges, and that it represented a lower-risk alternative to seeking a listing overseas.

Guo Shuqing, the chairman of the CSRC, said the commission and its equivalent in Hong Kong, the Securities and Futures Commission, had agreed to lower the size and financial requirements for companies seeking to list.

Under current CSRC conditions, mainland firms must be valued at more than 400 million yuan ($62.5 million), and have had annual net profits of more than 60 million yuan.

Also, applications must be seeking to raise at least $50 million from an IPO.

In Hong Kong, IPOs by mainland companies raised $13.1 billion in 2011, a 59 percent drop on 2010, according to Bloomberg data.

xieyu@chinadaily.com.cn

Related Readings:

China to roll out new capital market measures
CSRC cancels 32 administrative approval items
CSRC eases fund approval policy
HKEx mulls listing rules revamp
South Beauty to go public in HK
PICC increases 6.9% on HK trading debut