A+H Investment Opportunities Under the New HKEX IPO Regulations

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Recently, the IPO rules of Hong Kong Exchanges and Clearing Limited have undergone a major reform, involving weighted voting rights, the recognition of innovation attributes, confidential submission for listing, and more. As the Exchange makes moves again, the “momentum” for A-share small- and mid-cap listed companies to list in Hong Kong may be further strengthened.

The Exchange continues to reform.

On March 13, the Stock Exchange of Hong Kong, a wholly owned subsidiary of Hong Kong Exchanges and Clearing Limited, published the “Consultation Paper on Review of the Listing Mechanism Competitiveness” (the “Consultation Paper”), seeking market feedback on a series of proposals relating to enhancing the competitiveness of Hong Kong’s listing mechanism.

The competitiveness review by the Exchange can mainly be summarized into several parts, and the changes drawing the most attention from the outside world involve listings with weighted voting rights, the recognition of innovation attributes, confidential listings, and so on.

Specifically, for weighted voting rights companies that want to list, the “Consultation Paper” proposes lowering the thresholds to: a market capitalization of no less than HK$20 billion, or a market capitalization of HK$6 billion combined with revenue of no less than HK$600 million in the most recent financial year; compared with existing standards, this represents a reduction of around 50%.

At the same time, the “Consultation Paper” would automatically treat all eligible biotechnology and specialist technology companies (even if they do not list under Chapter 18A or 18C) as “innovative industry companies.” In addition, all new applicants may submit listing applications in a confidential manner, further loosening the approach compared with before.

Tracing it back to the source, in recent years, the Exchange’s series of reforms and optimization measures have been “interlinked” with related systems in the A-share market, providing many conveniences for A-share listed companies to list in Hong Kong. And after the Exchange updates its listing rules again this time, the enthusiasm of A-share small- and mid-cap companies to go to Hong Kong has even more reasons to be ignited.

******** Hong Kong Exchanges and Clearing Limited reform again

On March 13, the Exchange published the Consultation Paper to seek market feedback on a series of proposals to enhance the competitiveness of Hong Kong’s listing mechanism.

It is understood that this is the first-stage set of proposals on the Exchange’s review of the competitiveness of the listing mechanism. It aims to enrich the types of companies listed in Hong Kong, provide investors with more choices, and maintain robust investor protections. The consultation period lasts eight weeks and ends on May 8, 2026. A close look at this Consultation Paper shows that many provisions effectively achieve “loosening.”

First, the changes to the rules on weighted voting rights listings are the most eye-catching.

The current rules show that weighted voting rights listing applicants, under different voting rights test A conditions, must have a minimum market capitalization of HK$40 billion at the time of listing. Alternatively, under different voting rights test B conditions, they must have a minimum market capitalization of HK$10 billion at the time of listing, and the audited profit for the most recent accounting year must be at least HK$1.0 billion.

According to the recommendations in the Consultation Paper, the relevant financial qualification thresholds for weighted voting rights listing applicants will be “downgraded.” Under different voting rights test A conditions, the market capitalization threshold at the time of listing would be lowered to HK$20 billion; under different voting rights test B conditions, the market capitalization threshold would be lowered to HK$6 billion, and the audited profit for the most recent accounting year would be lowered to HK$600 million.

For listing applicants with a market capitalization of at least HK$40 billion at the time of listing, the Consultation Paper also suggests raising the upper limit of the proportion of different voting rights shares to no more than twenty votes per share with different voting rights—that is, different voting rights weighting of 1:20, which is a clear change from the previous 1:10 rule.

Second, adjustments have also been made to the recognition of innovation attributes. Based on the descriptions in the Consultation Paper, the Exchange will categorize the recognition pathways for “innovative industry companies” into—Type A “technology pathway” and Type B “business model pathway”—and expand the scope of companies that will be automatically regarded as “innovative industry companies.” In the future, it will include all eligible biotechnology and specialist technology companies that adopt a “technology pathway.”

More importantly, the scope of eligibility conditions for confidential listings has also been further expanded.

Previously, the provisions allowing listing applications to be submitted in a confidential manner only applied to second listings, or to listing applicants that are biotechnology companies or specialist technology companies. But in the future, all new applicants will be able to choose to submit listing applications in a confidential manner.

Along with the optimization of provisions related to confidential listings, the Exchange also recommends strengthening the return mechanism. Wu Jiexian, head of listing at the Exchange, said that if the submitted application materials are incomplete, they may be returned. When returned, the Exchange will publish the list of professional institutions involved in preparing the listing materials, including sponsors, accounting firms, and law firms.

As for the so-called “confidential submission” of a listing application form, it only allows issuers not to disclose the application documents to the public immediately during the application stage. However, once a company passes the listing hearing, it must still disclose the listing documents as soon as possible.

******** “Linked effects”promising

The Exchange’s listing reforms are not happening out of thin air, because in recent years it has been in the midst of a “reform wave.” In particular, it is worth noting that many of the Exchange’s reform initiatives are centered around A-share assets.

In April 2024, the China Securities Regulatory Commission released five capital market cooperation measures with Hong Kong, including: easing the scope of eligible products under the Shanghai–Shenzhen–Hong Kong Stock Connect for stock ETFs; including REITs in the Shanghai–Shenzhen–Hong Kong Stock Connect; supporting the inclusion of Renminbi stock trading counters into Stock Connect to Hong Kong; optimizing fund mutual recognition arrangements; and supporting leading industry companies in Mainland China to list in Hong Kong. Then in October of the same year, the Hong Kong Securities and Futures Commission and the Exchange issued a joint statement to optimize the approval process for A-share companies to list in Hong Kong.

From company announcement information, the overseas listing filing and review process for Chinese companies by the China Securities Regulatory Commission has been significantly accelerated in 2025, with the review duration shortened from more than 100 days in 2024 to within 60 days. Coinciding with this trend, manyA-share large-cap leading companies have already tasted the “benefits” of listing in Hong Kong—most typically including Contemporary Amperex Technology (Ningde Times), Midea Group, Haitian Flavoring, Lens Technology, Sanhua Intelligent Controls, and others.

This time, with the “loosening” of rules such as weighted voting rights listings, the recognition of innovation attributes, and confidential listings, it can also bring many new opportunities to A-share small- and mid-cap listed companies that intend to go to Hong Kong.

Among them, the revisions to the weighted voting rights scheme are more aligned with the rules of the A-share market. Currently, when listing on the Main Boards of the Shanghai Stock Exchange and the Shenzhen Stock Exchange, the market capitalization requirement is RMB 20 billion; when listing on the STAR Market and the ChiNext, the market capitalization requirement is RMB 5 billion and the revenue in the most recent accounting year is RMB 500 million.

Moreover, many innovative companies that are in their growth stages but still small in scale can also enter the Hong Kong market in the form of a weighted voting rights structure. Looking at the A-share market, multiple STAR Market companies with stock code suffix “W” meet this condition. In addition, all eligible biotechnology companies under 18A and specialist technology companies under 18C will automatically be regarded as “innovative industry” even if they do not list under the specialist technology chapter, which is also beneficial for some STAR Market technology-type companies.

In addition, some A-share small- and mid-sized enterprises involved in innovative drugs, the AI industry chain, and scarce cutting-edge high-end technologies may face intense competition within their industries. Therefore, submitting a listing application too early is not beneficial for trade secrets; instead, it may affect the company’s strategic development plans. In the future, based on the principle of confidential filing (confidential submission), the determination and motivation of relevant companies to go to Hong Kong will be even stronger.

It is worth mentioning that, from a long-term perspective, as more A**-share small- and mid-cap listed companies head to the Exchange to list, the valuation ecosystem for relevant companies will also be very favorable.**

Wind data shows that since 2025, the price-to-earnings (P/E) ratio of the STAR 200 Index has been fluctuating between 160 times and 400 times. And since 2024, the P/E ratio fluctuation ranges of the CSI 2000 Index and the CSI 1000 Index have been 29 times to 65 times, and 26 times to 53 times, respectively.

From an analytical perspective, domestic investors often adopt relatively bold pricing for relevant A-share small- and mid-cap companies, giving extremely high valuation premiums when their business cycle is on an upswing, and imposing large valuation discounts when business conditions are not favorable, resulting in very large overall valuation swings.

In the Hong Kong market, foreign investors generally give high valuation premiums to high-quality small- and mid-cap companies and also apply more rational pricing to small- and mid-cap companies. Therefore, in the future, after high-quality A-share small- and mid-cap listed companies list in Hong Kong, they can also leverage the style of Hong Kong capital to make the company’s valuation “center of gravity” clearer.

Small- and mid-cap companiesforming “southbound clusters”********

New rules for listings at the Exchange are becoming a “catalyst” for many high-quality small- and mid-cap companies to go south to Hong Kong.

Since March2026, the pace of A**-share small- and mid-cap listed companies going to Hong Kong has picked up.** At the filing stage, according to HKEXnews, on March 16, KeFu Medical and PuTaiLi submitted their listing applications to the Exchange on the same day. Among them, KeFu Medical is one of China’s largest home medical device companies; in 2025 it achieved revenue of 3.387 billion yuan and net profit of 372 million yuan. PuTaiLi is a comprehensive solutions provider upstream in the new energy battery industry chain; in 2025 its revenue reached 15.711 billion yuan and net profit was 2.359 billion yuan. In addition, on March 15, XinQi WeiZhuang, a direct imaging equipment supplier for PCBs, submitted its prospectus for the second time. The company’s 2025 revenue was 1.408 billion yuan and net profit was 290 million yuan.

There are also many companies at the hearing and prospectus stages. On March 8, Hui Guang Electric, a STAR Market company, passed the listing hearing at the Exchange’s Main Board. According to data from Zhishan Consulting, in 2024 the company ranked first in China in sales volume of mid-to-large-sized AMOLED semiconductor display panels.

At the same time, there are also many A**-share companies planning to list in Hong Kong.** Not long ago, Huasheng Lithium Battery held a board meeting and deliberated and passed a resolution to issue H shares and list on the Exchange’s Main Board. In its announcement, the company said this move is to further advance its global strategy and expand diversified financing channels. In addition, Yangying Precision also released a preliminary announcement regarding its plan to list in Hong Kong.

For companies that have already been listed, since 2026, multiple A-share companies have listed on the Exchange’s Main Board, including Zhaowei Electromechanical, Aiston, and Meige Intelligent. Among them, Aiston became the first industrial robot enterprise to achieve an “A+H” dual-platform listing; Meige Intelligent was also included in the list of Stock Connect trading counters under Shanghai–Hong Kong Stock Connect and Shenzhen–Hong Kong Stock Connect.

It is not hard to see that behind this round of A-share small- and mid-cap companies “forming clusters” to go south, besides demand driven by each company’s own internationalization strategy, it also cannot be separated from continued policy-level support. Specifically, the A+H fast track introduced by the Stock Exchange of Hong Kong in 2024, the “Listing Rules” optimized in August 2025, and the new round of listing system reform launched in March 2026 have, by optimizing approval procedures and lowering listing thresholds, significantly improved the efficiency of cross-border listings, and also gradually made the “A+H” listing model a standard configuration for high-quality A**-share companies.**

Responsible Editor | Wang Peng