The wave of mainland Chinese companies seeking listings in Hong Kong in 2026 continues, but the Hong Kong stock market is approaching its earnings season in March. Against the backdrop of a persistent shortage of manpower in the local accounting sector, the surge in new listing applications may temporarily cool down. An accountant revealed that, due to the need to complete annual audits for existing listed clients and update financial data for clients that have already submitted IPO applications, they have informed clients who only became IPO clients in the first quarter of this year that work cannot commence until after the end of March. The accountant stated that a colleague recently met with six potential IPO clients in a single day, during which clients inquired about the listing process, timeline, and fees. Some accounting firms impose limits on the number of clients—including both listed companies and IPO clients—that a single partner can handle simultaneously. Furthermore, due to internal cost and resource considerations, the Big Four accounting firms are currently focusing on larger IPO clients, such as companies pursuing listings in both mainland China and Hong Kong ("A+H" listings). They allocate manpower based on factors like the client's industry and their readiness for listing. The report mentioned that the Hong Kong Accounting and Financial Reporting Council (AFRC) stated that the recent recovery in capital markets and active IPO applications present business opportunities for accountants, but also increase the pressure to ensure the quality of new listings. The Hong Kong AFRC will closely monitor related work and will take appropriate disciplinary action in accordance with regulations if any violations are found, in order to uphold market quality and protect investor interests. The Hong Kong AFRC is primarily responsible for regulating accountants, ensuring their compliance with professional standards through inspections and investigations, including their work as reporting accountants or auditors for IPOs. The Hong Kong Securities and Futures Commission (SFC) and the Hong Kong Exchanges and Clearing Limited (HKEX) wrote to IPO sponsors late last year urging them to ensure quality. The SFC also issued another letter last Friday directing listing sponsors to promptly conduct internal reviews to rectify serious deficiencies in the preparation of listing documents.
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