HKEX business valuation disclosure guide

Guidance context · reviewed 29 July 2026

HKEX Guidance Letter GL116-23 addresses disclosure of the basis of consideration and business valuations in notifiable transactions. It is relevant when a listed issuer uses an independent valuation or valuation-type analysis in determining transaction pricing.

What the guidance is trying to solve

Investors need enough information to understand how the board arrived at the consideration and whether assumptions and valuation evidence are reasonable. Generic statements that the price was “commercially negotiated” may not explain the economic basis of the deal.

Questions to answer before the model is final

1. What exactly is being acquired or disposed of?
2. How does the consideration bridge to enterprise value and equity value?
3. Which methods are appropriate and why?
4. How were comparable companies or transactions selected?
5. What forecast period and terminal assumptions are used?
6. Which assumptions are most sensitive?
7. How are debt, cash, non-operating assets and contingent items treated?
8. Does the valuation imply a profit forecast under the Listing Rules?

Comparable-company disclosure

A credible comparable set should be tied to business model, revenue source, geography, growth, margins, scale and risk. The exclusion of apparent peers should be explainable. The selected multiple and any premium or discount should follow from the evidence, not merely from a desired transaction value.

Forecasts and assumptions

Management should own the forecast. The valuation process should document historical performance, variance from prior budgets, commercial pipeline, capacity, margin development, working capital, capital expenditure and funding needs. Sensitivity analysis should focus on assumptions that genuinely drive the conclusion.

A practical disclosure workflow

Official source

HKEX Guidance Letter GL116-23 — Disclosure of the basis of consideration and business valuations in notifiable transactions.