Requirement for GEM IPO

Enterprises who intent to IPO on GEM in Hong Kong shall apply to Hong Kong Exchange and Clearing Limited and relevant procedures and requirements are set out on GEM Listing Rules.

Requirements

Financial Requirements

  • No profit requirement
  • Previous 2 year’s cash inflow from operation activities ≥ HKD20 million
  • Market Capitalisation at the time of listing ≥ HKD100 million

Business Record Requirement

  • Trading record of at least two financial years;
  • Management continuity throughout the two preceding financial years; and
  • Ownership continuity and control throughout the preceding full financial year.

Management Requirement & Undertaking

Management Requirement
  • At least three independent non-executive directors
  • Establish an audit committee comprising at least three members
Shareholders Undertaking
  • Disclosure in IPO documents not to sell its interests in the company within the first six months after IPO
Management Undertaking
  • Not to sell its interest in the company within 12 months after IPO, so that it is no longer the controlling shareholder of the company, keeping at least 30% interest in the company

Recognized Jurisdiction

  • Australia
  • Bermuda
  • Brazil
  • British Virgin Islands
  • Canada – Alberta
  • Canada – British Columbia
  • Canada – Ontario
  • Cayman lslands
  • China
  • Germany
  • Hong Kong
  • Italy
  • Japan
  • Jersey
  • Luxembourg
  • Singapore
  • United Kingdom

Minimum Public Float

  • At least 25% of the issuer’s total issued share capital subject to a minimum of HK$30 million (US$3.8 million) must at all times be held by the public.
  • For issuers with an expected market capitalisation of over HK$10 billion (US$1.3 billion) at the time of listing, the Exchange may accept a lower percentage of between 15% and 25%.

Other Requirement

  • At least 100 public shareholders
  • No more than 50% of the securities in public hands at the time of listing can be beneficially owned by the three largest public shareholders
  • The controlling shareholder or director can conduct business competing with the company, subject to full disclosure
  • The company is able to do IPO in sole manner of placing
  • Underwriting is not compulsory
  • There is no issue of new shares within the first six months after IPO of the company