"We expect that more mainland-based small and medium-sized enterprises will be listed in Hong Kong following the relaxation of listing requirements for (Hong Kong's) H shares and the beginning of the conversion of B shares into H shares," said Edmond Chan, a PwC capital market services group partner.
The mainland A-share market's long waiting time and tightening regulations will prompt some IPO applicants to turn to other markets such as Hong Kong, Sun Jin, an assurance partner at PwC China, told the Global Times.
Currently more than 800 applicants are waiting for the approval of China's securities regulator to get listed on the A-share market.
Financing costs for listing on Hong Kong's H-share market are higher than for the A-share market, but the waiting time for an applicant to get listed is much shorter - one to two years compared with five to six, PwC's experts said.
The China Securities Regulatory Commission issued a new guidance on overseas listings in late December, aimed at diverting the long waiting list of IPO applicants from the A-share market to the overseas market including the H-share market.
The new guidance, effective since January 1 this year, canceled some strenuous thresholds for overseas listings - such as a requirement that applicant companies have at least 400 million yuan of net assets, 60 million yuan of net profits, and the ability to finance at least $50 million overseas.
Girl wearing "military uniform" parade on the street to publicize the new traffic regulation
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