(Yicai Global) Jan. 24 -- The three Chinese firms that have corned more than 90 percent of the global market for cryptocurrency mining machines fail to meet the Hong Kong Stock Exchange's listing principle of 'suitability,' the bourse's chief executive said. They each applied to debut on the HKEX last year.
The exchange's "core requirement for companies applying for initial public offerings is suitability," Tencent's online news site quoted Charles Li as saying at the World Economic Forum's annual meeting in Davos yesterday. "That is, whether the companies' business models proposed to investors are suitable for listing?"
"For example, a company has earned billions of dollars through business A, but it suddenly said it will turn to business B with zero performance," Li said. "If the business pattern of B is better, then A will lose its sustainability."
Investors will question the profit sustainability of companies seeking to go public if they cannot continue their original business because of regulatory factors, he added.
Bitmain Technologies, Canaan Creative and Ebang International Holdings each filed a listing application with the Hong Kong bourse last year. Canaan submitted in May, so it has already passed the six-month review period required by the HKEX. Early investors in the firm said it now hopes to go public on the Nasdaq Stock Market.
Bitmain, the larger of the three, once expected to be the most promising company in the digital currency sector to list. Li's remarks mean it now has no chance to list on the HKEX, though more than two months are still left before it passes the review period.
Still, the bourse will adhere to procedural justice and reserve companies' rights of appeal, Li said, "but we still stick to the principle of suitability."