"Hong Kong stock market listing documents frequently exhibit 'flamboyant style', Hong Kong regulatory authorities issue letters requesting strict quality assurance"

Recently, the Hong Kong Securities and Futures Commission and the Hong Kong Stock Exchange jointly sent a rare letter to IPO sponsors, expressing regulatory concerns over the declining quality and non-compliant behaviors observed in recent new listing applications. The letter stated that the quality of some IPO sponsors' submission documents was poor, with insufficient reviews, such as unclear descriptions of business models and excessive use of promotional language; selective presentation of industry data to exaggerate the market position of the applicant, etc. This letter has raised concerns in the market about the quality and sustainability issues of future Hong Kong IPOs. In response, some capital market professionals told Securities Times reporters that this regulatory letter mainly focuses on whether intermediary institutions are diligent and responsible, and the quality of writing IPO submission documents, rather than the quality of the Hong Kong IPO companies themselves. In fact, Securities Times reporters have found in the analysis of relevant prospectuses that issues such as "exaggerated claims" and "selective presentation of industry position" are frequently seen in current Hong Kong IPO prospectuses. Furthermore, the high concentration of IPO listings has put a heavy burden on intermediary institutions, making them prone to errors due to being overwhelmed. The participation of many small and medium-sized investment banks has also worsened the quality issues of IPO listing documents.