HKSI Paper 1 Accessing public capital question: Main Board market cap/revenue test

HKSI Paper 1Accessing public capital

Kai Tak Cloud Ltd has a three-year trading record under the same management and owners. It has made losses throughout with negative operating cash flow, but latest audited revenue was HK$600 million and expected market capitalisation is HK$4.5 billion. Which Main Board financial test can it meet?

A The profit test, using revenue in place of profit
B None of them, because all three tests require a profit
C The market capitalisation/revenue/cash flow test
D The market capitalisation/revenue test

Show the answer and explanation

Answer: D. The market capitalisation/revenue test

Main Board Rule 8.05(3) sets the market capitalisation/revenue test: three financial years' trading record, management continuity for three years, ownership continuity for the latest audited year, market capitalisation of at least HK$4 billion at listing and revenue of at least HK$500 million in the latest audited year. Kai Tak meets every limb, and no profit or cash flow is needed. The market capitalisation/revenue/cash flow test in Rule 8.05(2) requires positive operating cash flow of at least HK$100 million over three years, which Kai Tak lacks. The profit test in Rule 8.05(1) measures profit, not revenue. Only the profit test requires profits. Source: Main Board Listing Rules r.8.05(1)-(3) (as at October 2026).

Common mistake

Assuming a loss-making company cannot list on the Main Board. A large enough company can rely on market capitalisation and revenue alone.

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Related HKSI Paper 1 questions

Tai Po Robotics Ltd has a two-year trading record under the same management and owners. It made losses in both years, but operating cash flow before working capital changes and taxes totalled HK$38 million, and expected market capitalisation is HK$200 million. If all else is met, where can it list?Trading in the shares of Sham Shui Po Textiles Ltd (Main Board) and of Lantau Media Ltd (GEM) has been suspended continuously since 1 April 2025. From when may the Exchange cancel each listing for continuous suspension?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?

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