Nasdaq recently proposed amendments to its listing rules, requiring companies primarily operating in China to raise at least $25 million through public offerings, equivalent to approximately HK$200 million. Au Chun-hing, Deloitte China South China Managing Partner, noted that while the Hong Kong Stock Exchange's main board funding threshold would be lower than Nasdaq's, companies must still meet listing criteria including profitability requirements. Given the relatively higher valuations in US markets for certain sectors, whether the implementation of this proposal will drive more mainland companies toward Hong Kong listings remains to be seen.

The Nasdaq exchange plans to increase the minimum public shareholding market capitalization requirement to at least $15 million while accelerating the delisting process for companies with thin trading volumes. Au explained that the proposal primarily targets currently smaller listed companies, aiming to enhance share liquidity and strengthen the shareholder base to prevent excessive equity concentration that could cause significant stock price volatility, thereby benefiting regulation and promoting healthy market development.

He pointed out that approximately 80% of Chinese concept stocks that listed on Nasdaq in the first half of the year raised less than $25 million. For smaller Chinese companies in terms of market capitalization and earnings, Hong Kong's Growth Enterprise Market (GEM) could be an alternative. However, considering GEM's current low liquidity and lack of institutional investor participation, it may not serve as a complete substitute.