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Ap Lei Chau Foods Ltd applies to list on the Main Board under the profit test. Its profit attributable to shareholders was HK$20 million in year 1, HK$22 million in year 2 and HK$40 million in year 3, the latest; expected market capitalisation is HK$700 million. Which of the following statements are CORRECT? I. Its latest-year profit of HK$40 million meets the most-recent-year requirement. II. It fails the profit test, as years 1 and 2 total HK$42 million, below the required HK$45 million. III. Its HK$82 million three-year total suffices on its own, as it exceeds HK$80 million. IV. Its expected market capitalisation of HK$700 million meets the profit-test minimum.
Main Board Listing Rules r.8.05(1)(a) requires profit attributable to shareholders of at least HK$35 million in the most recent year and at least HK$45 million in aggregate for the two preceding years. Statement I is true: HK$40 million exceeds HK$35 million. Statement II is true: HK$20 million plus HK$22 million is HK$42 million, below HK$45 million, so the application fails. Statement III is false: HK$80 million is just the sum of the two limbs, and each limb must be met separately. Statement IV is true: HK$700 million satisfies the market capitalisation requirement in r.8.09(2), but that cannot rescue the profit shortfall. Source: Main Board Listing Rules r.8.05(1), r.8.09(2) (as at October 2026).
Candidates add the three years and compare with HK$80 million. The test has two limbs, and each must be met.
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