Chairman of the Hong Kong Small and Medium Listed Companies Association: Suggest optimizing the Hong Kong stock merger and acquisition system to promote deep integration of "AI + finance".

On March 4, in an article titled "Observation of Hong Kong Stock Market | Combination of AI and Finance to Build an Innovative Engine" by Dr. Xi Chunying, the Chairman of the Hong Kong Small and Medium Listed Companies Association, it was mentioned that AI companies often have technical capabilities but lack scene resources and stable cash flow; while traditional listed companies have industrial scenes and financing capabilities but lack technological momentum. If the two integrate through the capital market platform, they can form a synergistic effect of "technology + scene + capital". This model is not just financial operations, but industrial restructuring. AI is essentially a basic capability platform that needs to be embedded in manufacturing, energy, healthcare, logistics, finance, and other scenes. Relying solely on the growth of startup companies, it is difficult to achieve large-scale industry penetration; but through mergers and acquisitions integration through listed companies, commercialization and scaling can be achieved quickly. Regarding the institutional bottlenecks that hinder cross-industry mergers and acquisitions, Dr. Xi Chunying has three reform suggestions: Firstly, review and optimize the existing testing mechanism. Some testing standards were originally intended to protect investors and prevent shell speculation, but in the current background of industrial transformation, excessive rigidness may hinder the injection of technology assets that truly have industrial synergies. The system design should shift from simply reviewing historical profit capabilities to considering industrial strategic value and future cash flow expectations. For merger projects that meet the direction of AI and strategic emerging industries, relevant thresholds can be optimized with full disclosure of information. Secondly, establish a green channel for technology mergers and acquisitions. For projects that clearly belong to priority development areas such as AI, aerospace, and biotechnology, special review arrangements can be set up to increase efficiency and reduce institutional uncertainty. Thirdly, substitute excessive restrictions with information disclosure. The core of marketization lies in transparency, not regulation. Rather than severely restricting cross-industry mergers and acquisitions, it is better to require higher standards of information disclosure, risk warnings, and valuation explanations, allowing the market to price itself. There are a certain proportion of undervalued and stagnant listed companies on the main board of Hong Kong. If these platforms lack long-term transformation opportunities, market efficiency and investor confidence will be weakened. By introducing high-quality AI or technology assets to achieve industrial transformation, three effects can be simultaneously achieved: activate existing market value, improve trading activity; provide a fast track for technology companies to enter the public market; protect and enhance the long-term investment expectations of small and medium investors. The key lies in establishing a policy environment that encourages transformation, rather than suppressing cross-industry restructuring with a one-size-fits-all approach. Hong Kong's greatest asset is its capital market itself. If the financial advantage can be systematically concentrated to support local scientific and technological enterprises, it will bring about a qualitative change. To this end, Dr. Xi Chunying has three suggestions: Firstly, establish a "local scientific and technological listing cultivation mechanism". The government can cooperate with the stock exchange and professional organizations to establish a special cultivation program to provide local scientific and technological enterprises with: listing path design; capital structure optimization plans; investor relations training; and merger integration consulting support. The aim is for companies to plan their capital market path during the incubation stage, rather than passively seeking listing after maturity. Secondly, develop a local technology industry integration fund. Guided by the government with private capital participation, a fund specifically supporting local AI companies in mergers and acquisitions and integration can be established to help companies align with listed platforms and reduce transformation costs. The guided fund should be connected to the secondary market mechanism, rather than operate in isolation. Thirdly, strengthen financial institutions' long-term coverage of local technology companies. Encourage banks, securities firms, and asset management institutions to establish specialized AI and scientific and technological research departments to enhance their valuation capabilities and long-term tracking coverage of local technology companies. Many small and medium-sized listed companies in Hong Kong are in a situation of low valuation and lack of liquidity. If AI technology can be introduced to upgrade business models, or through mergers and acquisitions integration to form the direction of ShenZhen New Industries Biomedical Engineering, a revaluation of market value may be possible. The "financial +" is reflected in three aspects: optimizing capital structure; coordinating industry integration funds; guiding long-term capital. When small and medium-sized listed companies have a clear technological transformation path, the market will naturally respond with higher valuations and active trading. Furthermore, Dr. Xi Chunying mentioned in the article that the Hong Kong Special Administrative Region government's latest budget proposal put forward the idea of "AI+" and "financial +" mutually promoting and combining to comprehensively empower high-quality economic and industrial development. This strategic judgment points in the right direction, capturing the core of Hong Kong's future competitiveness - leveraging financial advantages to drive technological innovation and technological momentum to enhance financial upgrading. The budget proposal also includes the establishment of a 100 billion innovation and technology industry guidance fund, and the Financial Secretary personally chairs the "AI+ and Industrial Development Strategy Committee". This arrangement has a clear strategic significance. The 100 billion fund is not simply a subsidy fund, but a "guided capital". The core logic is that government funds act as anchor or subordinate capital to attract market funds for co-investment, amplifying the total investment scale and focusing on strategic emerging industries. The focus of the fund's investment direction is very clear, mainly covering three major areas: life health technology, AI and robotics, and future industries. This is not an act of "throwing money", but rather an active correction of Hong Kong's long-term tilted financial and real estate industry structure, indicating that the government has begun to shift from a "research support mindset" to a "capital allocation mindset". However, if policy implementation mainly stays at the level of expanding research funding or investing in funds and does not touch upon the structural mechanisms of capital market and industrial restructuring, it will be difficult to achieve a true structural breakthrough. It is only through simultaneous promotion of capital market reform, optimization of cross-industry mergers and acquisitions and restructuring mechanisms, the establishment of a complete path for local AI companies from incubation to listing, from technology to scene, that "AI+" and "financial+" can move from concept to reality and drive industrial transformation. Dr. Xi Chunying pointed out that in recent years, Hong Kong's IPO market has been continuously picking up, with the number of listed companies and the amount raised ranking among the top globally. However, there are still distinct features in the structure: 1) companies listed in Hong Kong are mostly large technology companies from mainland China or international; 2) local small and medium-sized innovative technology companies have weaker capabilities in utilizing the capital market; 3) there is a certain proportion of listed companies on the main board with insufficient business activity and long-term low valuation. This structure implies that the capital market in Hong Kong is not lacking in funds, but lacking effective resource restructuring mechanisms. Even more thought-provoking is the fact that the Hong Kong Special Administrative Region government has invested over 150 billion RMB in cultivating innovative technology companies over the past decade, incubating thousands of startups, but only a limited number of companies have truly achieved scalable growth and industry influence through the public capital market. This indicates a problem - a lack of a smooth conversion channel between research funding and the capital market. In this context, the establishment of the "AI+ and Industrial Development Strategy Committee" holds deeper significance. The fund is a tool, the committee is the direction. The fact that the Financial Secretary personally chairs it signifies that AI is no longer a single-point technology industry, but a lateral empowerment logic, including "financial + AI", "manufacturing + AI", "healthcare + AI", "logistics + AI", and so on. Dr. Xi Chunying stated that if Hong Kong does not enter the "deep water zone of AI industrialization", its position as an international financial center will gradually weaken. Because the competition among global financial centers has shifted from the competition for fund size to the competition for "capital and industrial synergy efficiency". In the AI era, business growth no longer depends on linear expansion of a single industry, but on the integration of technology and scenes. Cross-industry mergers and acquisitions are the key path to embedding AI technology into traditional industries and achieving efficiency leaps. "Financial +" does not only support the technology industry, but should also enable the financial industry itself to undergo AI upgrades. For example: AI-assisted risk control and auditing; intelligent valuation models for intellectual property and data assets; regulatory technology to enhance compliance efficiency. When the financial industry becomes an AI application scenario, local technology companies will gain continuous demand and order sources, forming a virtuous cycle. Hong Kong's advantage has never been scale, but institutional and capital efficiency. In the AI era, if "financial +" can drive cross-industry mergers and acquisitions, revitalize existing listed platforms, activate small and medium-sized market value companies, and concentrate financial advantages to support local scientific and technological enterprises, a closed-loop ecosystem of "financial + AI + industry" can be formed. The true value of "financial +" lies in turning the capital market into an accelerator of industrial upgrading; the true meaning of "AI+" lies in permeating technology into every industry scene. When the two deeply integrate, Hong Kong will not only consolidate its position as an international financial center, but also build a new competitive advantage in the AI era through industry transformation.