The Hong Kong Small and Medium Listed Companies Association launched on Wednesday, aiming to assist enterprises in leveraging Hong Kong’s innovative and financial strengths to navigate the choppy waters of rising operational costs, financing challenges, and complex listing regulations.
With a multifaceted mission, the association will provide small and medium-sized listed firms with eight types of services, such as setting up a symbiotic fund to mitigate financing and investment hurdles, offering one-stop financial services throughout the listing process, and delivering operational support. It will also lend a hand in marketing and promoting enterprises to boost their visibility.
During the launch ceremony, the association inked strategic partnerships with 10 firms and institutions from Hong Kong and the Chinese mainland, including Soochow Securities (Hong Kong), CMBC Capital, and Greaterbay Financier Association.
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Xi Chunying, president of the newly formed association, shared his experience after his company China First Capital Group Limited, which covers business in financial services, education and automotive parts, went public in Hong Kong in 2011. He noted that small and medium-sized listed companies face significant challenges, including difficulties in refinancing and sluggish trading activity. Xi said that mainland enterprises often struggle to understand the rules of Hong Kong’s stock market.
Moreover, the operational costs that come with being listed further squeeze traditional manufacturing firms already struggling with low valuations, Xi added.
Despite these hurdles, Xi said that there are success stories of small and medium-sized enterprises (SMEs) leveraging Hong Kong’s capital markets, and thriving. He cited the example of Tencent, which went public in 2004 at HK$3.70 ($0.48) per share. Today, the tech giant’s stock is trading at over HK$400, raising its valuation beyond HK$4 trillion.
Xi said the association cannot tackle these challenges on its own. He urged policymakers to roll out more SME-friendly initiatives and called on investment firms to be patient and provide capital on a long-term basis to support the sustainable development of promising SMEs.
Noting that “Hong Kong is now in a golden era of innovation and technology development”, Sun Dong, secretary for innovation, technology and industry of the Hong Kong Special Administrative Region government, said he believes SMEs from the mainland can capitalize on the city’s advantages in innovation and technology as well as finance to expand and fortify their operations.
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Citing ongoing infrastructure projects like the San Tin Technopole and the Hong Kong Park of the Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone as key drivers, Sun said tech companies can easily find opportunities in Hong Kong.
Moreover, the latest Global Financial Centres Index report, released in September, saw Hong Kong reclaim its position as the third-ranked financial hub in the world and the top in Asia.
“This suggests Hong Kong is poised to attract more international capital for its businesses, which can support these companies’ development and expansion into global markets,” Sun added.
Contact the writer at irisli@chinadailyhk.com