Listing Rules Ch.14 · Hong Kong
Valuation for HKEX notifiable transactions
Independent valuations supporting circulars, announcements and connected transaction disclosure for issuers listed on the Stock Exchange of Hong Kong.
When a listed issuer needs an independent valuation
Under the Listing Rules, transactions by a listed issuer are classified by reference to percentage ratios — assets, consideration, profits, revenue and equity capital. As the ratios rise, a transaction moves from a discloseable transaction to a major transaction, a very substantial acquisition or disposal, or a reverse takeover, and the disclosure obligations increase with each step. Connected transactions under Chapter 14A carry their own requirements, including independent shareholder approval in defined cases.
An independent valuation is not required for every transaction. It becomes necessary — or advisable — where a circular must present the basis of the consideration, where the Exchange or the independent financial adviser expects support for a price, where the transaction is with a connected person and fairness must be demonstrated, or where the board wants documented support for its decision.
What we do on these engagements
- Valuation of the target business, asset or equity interest as at the agreed date
- Valuation reports prepared for inclusion or reference in a circular or announcement, in the form the disclosure requires
- Support for the independent financial adviser's fairness and reasonableness assessment
- Property and mineral asset valuations where specific Listing Rules requirements apply, including Chapter 18 and the VALMIN Code for mineral companies
- Response to Exchange comments on the valuation during vetting
- Purchase price allocation after completion, where the acquisition requires it under HKFRS 3
Circular timetables drive everything. Once an announcement is out, the clock on the circular runs, and the valuation sits on the critical path alongside the accountants' report and the IFA opinion. Bringing the valuer in at announcement stage rather than during circular drafting is the difference between a controlled process and a compressed one. If you have a target despatch date, say so at enquiry — it determines whether the timetable is feasible.
Working alongside the deal team
These transactions involve a lot of parties: the issuer's finance team, the company secretary, sponsors or financial advisers, the IFA, reporting accountants and legal counsel. The valuation has to be consistent with the accountants' report and with what the circular says elsewhere, and inconsistencies between documents attract comment during vetting. We work directly with the deal team and respond to comments as part of the engagement rather than as a variation.
Experience
Valtech directors have signed valuation reports used in public disclosure by issuers listed in Hong Kong and Singapore, covering acquisitions and disposals of assets and groups of companies. The transactions have spanned artificial intelligence, agriculture, retail, mining, internet, automotive, education, financial services, multimedia, real estate and property management, entertainment, electronic equipment and infrastructure. The team has also valued overseas projects for SASAC filings in the PRC, which frequently arise where a Hong Kong listed issuer has a state-owned parent or counterparty.
Common questions
Is an independent valuation mandatory for a major transaction?
Not in every case. The Listing Rules set out disclosure requirements rather than a blanket requirement for a valuation in all notifiable transactions, and specific rules apply to particular asset types such as property and mineral assets. In practice, valuations are commonly obtained where the circular must explain the basis of the consideration, where the IFA needs support, or where the board wants documented support. Your sponsor or legal adviser will confirm what your specific transaction requires.
Can you work directly with our independent financial adviser?
Yes, and it is normal. The IFA's fairness and reasonableness opinion is a separate piece of work from the valuation, but the two have to be consistent. We engage with the IFA on methodology and assumptions during the process, so the documents align before they are submitted rather than after a comment is raised.
How long does a valuation for a circular take?
It depends on the target's complexity, the quality of information available and how many jurisdictions are involved. A single operating company with clean financials is quicker than a group with multiple subsidiaries, minority interests and cross-border assets. Because the circular timetable is fixed and public, we scope against your despatch date and tell you at the outset if it is not achievable rather than discovering it later.
Do you handle connected transactions where independence is scrutinised?
Yes. Connected transactions attract closer attention precisely because the counterparty is related, so the valuer's independence and the evidence behind the valuation matter more. We assess independence before accepting the engagement and set out the basis of every material assumption, since these reports are read by parties looking specifically for weaknesses.
Related valuation services
- Business Valuation
- Purchase Price Allocation
- Property, Plant & Equipment Valuation
- Startup & Pre-IPO Valuation
This page summarises how Valtech approaches this engagement type in Hong Kong. It is general information, not valuation, accounting, tax or legal advice for any specific entity. Scope and methodology are agreed in an engagement letter before work begins.
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