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Macroscope | Hong Kong can tap IPO potential of tech start-ups with innovative listing reforms
- Many tech start-ups that drive the economy remain in pre-profit, which hinders main board listing and access to needed R&D funds
- Listing reforms can unlock this potential and meet Hong Kong’s financial and tech hub goals
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During his two-day visit to Hong Kong marking 25 years since the handover, President Xi Jinping made clear his vision for the roles Hong Kong is to play in China’s growth: an international tech hub and an international financial centre.
To China, being self-reliant in technology is no longer something that’s nice to have; it is essential, especially given the geopolitical landscape.
The mainland’s advancement in software as a service (SaaS), artificial intelligence, mobility, cloud computing, robotics and quantum computing are strong examples of what top-down governance and bottom-up creativity can give rise to. Hong Kong’s success in areas such as biotechnology, drone technology and digital health has been equally encouraging.
But even with such staunch support, Hong Kong still has work to do to enhance its capital markets infrastructure and mindset to realise President Xi’s goals.
Tech firms drive global innovation and play a central role in the economic development of countries. In segments such as SaaS, which is the predominant segment for business-to-business enterprise software, there are a significant number of large, high-quality players.
The US SaaS market is estimated to reach US$113.5 billion this year, around 10 times larger than China’s, which is set to grow rapidly.
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