PwC proposes cutting Chapter 18C market-cap threshold to $2b

Key companies include those in aerospace technology and the low-altitude economy.

PwC Hong Kong has proposed cutting the minimum market capitalisation requirement under Chapter 18C from $8b to $2b for locally based companies in selected strategic sectors.

Key firms include those headquartered in the city with substantive local research and development or production operations in aerospace technology, the low-altitude economy, green energy, and new-energy metals.

“Hong Kong’s next phase of financial development will depend on how effectively it can channel capital towards the sectors driving China’s economic transition,” said Eddie Wong, Capital Markets Leader, PwC Hong Kong.

The recommendation forms part of the group’s submission for Hong Kong’s inaugural Five-Year Plan and 2026 Policy Address.

PwC also proposed a streamlined review channel for overseas-listed companies seeking to issue Hong Kong depositary receipts (HDRs). 

Qualified companies would need a minimum market capitalisation of $10b and a demonstrated compliance record, it said.

The firm recommended including such HDRs in Stock Connect and expanding the over-the-counter market to give early-stage firms a fundraising route before a formal listing.

It also called for greater sovereign fund investment and co-investment support for companies preparing to list, particularly those in hard technology, life sciences, and new energy.