HKSI Paper 8 SEHK primary and secondary markets question: Peng Chau Robotics Ltd seeks a GEM listing under the market cap/revenue/R&D test

HKSI Paper 8SEHK primary and secondary markets

Peng Chau Robotics Ltd seeks a GEM listing under the market cap/revenue/R&D test. Expected market capitalisation is HK$300 million. Over two years revenue was HK$45 million then HK$60 million, and R&D spending HK$13 million then HK$19 million, being 18% then 13% of total operating expenditure. It meets the record and continuity conditions. Does it qualify?

A No, because R&D was below 15% of total operating expenditure in one year
B Yes, because its aggregate R&D of HK$32 million exceeds the HK$30 million minimum
C No, because the test needs revenue of at least HK$500 million in the latest year
D No, because the test needs a market capitalisation of at least HK$500 million

Show the answer and explanation

Answer: A. No, because R&D was below 15% of total operating expenditure in one year

GEM Rule 11.12A(4) requires market capitalisation of at least HK$250 million (HK$300 million passes), revenue of at least HK$100 million over the two years with year-on-year growth (HK$105 million, rising, passes), R&D of at least HK$30 million in aggregate (HK$32 million passes) and R&D of at least 15% of total operating expenditure in each of the two years. The second year is only 13%, so the test fails. HK$500 million revenue and HK$500 million market capitalisation are Main Board figures (r.8.05(2)-(3) and r.8.09(2)), not GEM ones. Source: HKEX GEM Listing Rules r.11.12A(4); Main Board Listing Rules r.8.05, r.8.09(2) (as at October 2026).

Common mistake

Checking only the aggregate R&D figure. The 15% ratio must be met in each of the two years, not on average.

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Original study material mapped to the public HKSI Paper 8 syllabus. Unofficial, not endorsed by HKSI Institute or the SFC. Verify figures and rules against current guidance before relying on them.