The Stock Exchange of Hong Kong Limited, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEX), announced a 60% increase in the profit requirement for a Main Board Listing on Thursday.

On May 20, HKEX announced that it will raise the profit requirements for a Main Board listing applicant. It requires that the profit minimum for a Main Board listing applicant will be (a) $35 million in the most recent financial year; and (b) $45 million in aggregate in the two preceding financial years during a three-year trading record period, with an aggregate profit of $80 million.

The new requirement will be implemented on January 1, 2022.

Compared to the current Main Board listing rules, the threshold has been up by 60%. HKEX's current listing rules require an applicant to have an accumulated profit of not less than HK$50 million for the three years before listing, or a profit of not less than HK$20 million for the year before listing, and a market capitalization of HK$500 million.

HKEX's new consultation does not include the market capitalization and revenue tests, but only a profit requirement. In other words, there is no change in the revenue and market capitalization tests for future companies listed in Hong Kong, i.e., the company is still required to have excess revenue of HK$500 million in the most recent year with a market value higher than HK$4 billion.