HKSI Paper 1 Accessing public capital question: expected market capitalisation of HK$1.2 billion

HKSI Paper 1Accessing public capital

Pine Bio Ltd, a pre-revenue biotech, applies under Chapter 18A. It has two financial years in its current business under substantially the same management, working capital covering 130% of group costs for 12 months after listing, and an expected market capitalisation of HK$1.2 billion. Can it list?

A No: Chapter 18A requires a three-year trading record under the same management
B No: its expected market capitalisation is below the HK$1.5 billion minimum
C No: its working capital must cover at least 150% of costs for 18 months
D Yes: it meets the trading record, working capital and market value tests

Show the answer and explanation

Answer: B. No: its expected market capitalisation is below the HK$1.5 billion minimum

Rule 18A.03 of the Main Board Listing Rules requires a Chapter 18A applicant to have an initial market capitalisation at listing of at least HK$1.5 billion, at least two financial years in its current line of business under substantially the same management, and working capital covering at least 125% of the group's costs for at least 12 months from the listing document (after IPO proceeds). Pine Bio meets the trading record and working capital tests but fails on market value, so it cannot list under Chapter 18A. Three years is the Chapter 8 and Chapter 18C trading record, not the Chapter 18A one. The working capital test is 125% for 12 months, not 150% for 18 months. Source: Main Board Listing Rules r.18A.03(2)-(4) (as at October 2026).

Common mistake

Candidates remember the 125% working capital and two-year record but forget that pre-revenue biotech still needs HK$1.5 billion of market value at listing.

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Original study material mapped to the public HKSI Paper 1 syllabus. Unofficial, not endorsed by HKSI Institute or the SFC. Verify figures and rules against current guidance before relying on them.