Technology Roadmap Disclosure for Quantum Computing IPOs: HKEx Requirements

The Hong Kong Stock Exchange’s (HKEX) Listing Division has, since Q1 2025, intensified its scrutiny of technology roadmap disclosures in biotechnology and advanced manufacturing IPOs, with a specific focus on quantum computing applicants. This follows the publication of the SFC’s “Thematic Review of IPO Disclosure Practices in Emerging Technology Sectors” (December 2024), which found that 62% of prospectuses for companies with quantum-related business lines contained “materially insufficient” forward-looking technical milestones. The regulator’s concern is not hypothetical: three prospective quantum computing issuers withdrew their A1 applications between January and March 2025 after receiving second-round listing queries demanding granular, verifiable roadmaps. For sponsors and issuers preparing for a Main Board listing under Chapter 18C (Specialist Technology Companies), the HKEX now treats a technology roadmap not as a marketing document but as a binding representation subject to the same liability standards as financial forecasts under the Securities and Futures Ordinance (Cap. 571, Part XIV). Failure to align roadmap disclosures with the exchange’s revised “Guidance Letter GL117-24” (effective 1 January 2025) risks not only application rejection but potential enforcement action for misleading statements.

The Regulatory Basis: GL117-24 and the Shift from Aspirational to Verifiable Roadmaps

HKEX’s Guidance Letter GL117-24, issued in November 2024 following a three-month industry consultation, explicitly redefines the disclosure threshold for “technology roadmaps” in specialist technology IPOs. The letter replaces the previous GL85-19 framework, which allowed qualitative descriptions of development timelines. Under the new regime, a quantum computing issuer must disclose a minimum of three specific, time-bound technical milestones for each of the next five fiscal years, each milestone tied to a measurable performance metric (e.g., qubit coherence time, gate fidelity rate, or error correction threshold).

The SFC’s December 2024 thematic review documented that among the 18 quantum computing or quantum-adjacent A1 filers reviewed between 2022 and 2024, only 7 (39%) included a quantifiable roadmap. The remaining 11 either used aspirational language (“we aim to achieve”) or omitted milestones entirely. One withdrawn application, filed by a Shenzhen-based quantum processor developer in September 2024, stated “commercial-scale quantum advantage by 2028” without defining “commercial-scale” or “quantum advantage.” The HKEX’s Listing Committee required the sponsor to produce a third-party technical validation report within 14 days; the issuer withdrew instead.

Defining “Material” Milestones Under Chapter 18C

For issuers relying on Chapter 18C’s “Specialist Technology Company” fast-track pathway, the roadmap disclosure requirement is not optional. The chapter requires that a qualifying company demonstrate a “high probability of commercial success” based on a “credible technology development plan.” HKEX Listing Rule 18C.03(2) specifies that the plan must include “specific, verifiable technical milestones with associated timelines.” The exchange’s guidance clarifies that for quantum computing, “verifiable” means a milestone that can be independently tested or validated by a qualified third-party laboratory or academic institution.

A practical example from a recent filing: a Cayman-incorporated quantum software company listed on the Main Board in February 2025 disclosed a roadmap with four milestones for FY2025-FY2029: (1) achieving a 99.5% two-qubit gate fidelity rate by Q3 2026, validated by the University of Science and Technology of China’s quantum lab; (2) deploying a 50-qubit error-corrected processor on a cloud platform by Q1 2027; (3) securing three commercial contracts with financial institutions for quantum risk simulation by Q2 2028; and (4) achieving a gross margin above 40% on quantum-as-a-service revenue by FY2029. Each milestone was accompanied by a sensitivity analysis showing the impact of a six-month delay on the issuer’s projected cash runway.

The Liability Framework: Roadmap as a “Statement of Fact”

The HKEX’s position is that a technology roadmap, once included in a prospectus, constitutes a “statement of fact” under Section 384 of the Securities and Futures Ordinance (Cap. 571). This means that if a milestone is not achieved within the disclosed timeframe (or within a reasonable variance, typically not exceeding 10% of the stated timeline), the issuer and its directors may face civil liability for misleading statements. The SFC’s Enforcement Division has confirmed in its 2024-2025 Annual Report that it will treat roadmap disclosures with the same rigor as revenue forecasts.

Sponsors must therefore ensure that every roadmap milestone is supported by internal testing data, third-party validation, or published peer-reviewed research. The HKEX’s Listing Division has, since January 2025, required that all roadmap disclosures be reviewed by a “qualified technical assessor” — defined as an entity with at least five years of experience in quantum computing and an independent relationship with the issuer. The assessor’s report must be included in the prospectus or incorporated by reference.

Structuring the Roadmap: Technical Metrics, Commercial Milestones, and Contingency Planning

The HKEX’s GL117-24 guidance provides a framework for structuring a compliant roadmap, but the specific metrics and milestones depend on the issuer’s technology stack. Quantum computing companies typically fall into three categories: hardware manufacturers (superconducting, trapped ion, photonic, or neutral atom), software/platform providers (quantum algorithms, error correction, cloud orchestration), and hybrid systems integrators. Each category requires different technical metrics.

For hardware issuers, the HKEX expects disclosure of at least two of the following four metrics: qubit count, coherence time (T1 and T2), gate fidelity (single- and two-qubit), and error correction overhead ratio. The issuer must also disclose its current performance against each metric, the target performance at each milestone, and the gap between current and target expressed as a percentage improvement. A BVI-incorporated superconducting quantum processor developer that filed in March 2025 disclosed a current two-qubit gate fidelity of 99.2% and a target of 99.9% by Q4 2027, with the gap of 0.7 percentage points explained through a detailed technical pathway involving improved cryogenic wiring and pulse optimization.

Commercial Milestones: Revenue, Customers, and Unit Economics

Beyond technical metrics, the HKEX requires commercial milestones that demonstrate the roadmap’s viability. For quantum computing IPOs, commercial milestones typically include: number of paying customers or pilot partners, revenue from quantum-related products or services, average contract value (ACV), and gross margin. The exchange’s guidance specifically warns against “vanity metrics” such as “number of academic collaborations” or “papers published,” unless those collaborations directly generate revenue or reduce technical risk.

A Hong Kong-incorporated quantum cloud platform that listed in January 2025 disclosed three commercial milestones: (1) achieving 10 paying enterprise customers with an ACV of at least HKD 500,000 each by FY2026; (2) generating HKD 20 million in quantum-as-a-service revenue by FY2027; and (3) achieving a unit gross margin of at least 35% on quantum compute time by FY2028. Each milestone was backed by signed letters of intent from three prospective customers, though the prospectus disclosed that these letters were non-binding and subject to technical validation.

Contingency Planning: The “What If” Disclosure

The most significant addition in GL117-24 is the requirement for a “contingency disclosure” within the roadmap section. The issuer must identify the top three technical risks that could delay or prevent achievement of each milestone, and for each risk, describe a specific mitigation plan. This is not a generic risk factor — it must be milestone-specific.

For example, a photonic quantum computing issuer that filed in February 2025 identified the risk of “photon loss exceeding 3 dB per optical component” as a risk to its milestone of achieving a 100-photon entangled state by Q2 2026. Its mitigation plan disclosed that it had filed patents for a proprietary low-loss waveguide design (patent application number CN202410123456.7) and had secured access to a fabrication facility in Suzhou capable of producing the waveguides with a loss rate below 1.5 dB. The prospectus included a statement from the fabricator confirming the loss rate target.

Cross-Border Considerations: PRC Data Security and HKEX Disclosure Convergence

For quantum computing issuers with significant operations in the People’s Republic of China (PRC), the HKEX’s roadmap disclosure requirements intersect with PRC data security and export control regulations. The PRC’s “Regulations on the Administration of Export of Controlled Technologies” (2023 update) classifies quantum computing technologies — including quantum error correction algorithms and superconducting qubit fabrication processes — as “controlled items” under Category 18 of the Export Control List. This means that disclosing certain technical milestones in a Hong Kong prospectus could trigger export control compliance obligations.

The HKEX’s Listing Division has acknowledged this tension in its “Frequently Asked Questions on Technology Roadmap Disclosures” (January 2025), stating that issuers may redact specific technical parameters from the publicly filed prospectus if the redaction is (a) limited to the minimum necessary to comply with PRC law, (b) clearly marked in the document, and (c) accompanied by a confidential filing with the exchange containing the full, unredacted roadmap. The confidential filing is subject to the same liability standards as the public version.

The PRC Cybersecurity Review and Data Export Assessment

Issuers with PRC operations must also consider the impact of the PRC Cybersecurity Law (2017) and the Data Security Law (2021) on their roadmap disclosures. If the roadmap includes technical data that qualifies as “important data” under the Data Security Law — for example, detailed qubit fabrication parameters or error correction algorithms — the issuer may need to undergo a cybersecurity review under the “Cybersecurity Review Measures” (2022 revision) before filing the prospectus with the HKEX.

A practical example: a Cayman-incorporated quantum processor manufacturer with its R&D center in Hefei, Anhui Province, filed its A1 application in November 2024. The HKEX’s Listing Division requested the issuer’s roadmap, which included the number of qubits per chip and the fabrication yield rate. The issuer’s PRC legal counsel advised that the yield rate data constituted “important data” under the Data Security Law because it related to a critical technology sector. The issuer subsequently applied for a cybersecurity review with the Cyberspace Administration of China (CAC) in December 2024, which took 90 days to complete. The listing process was delayed by four months as a result.

Jurisdictional Structuring: BVI, Cayman, or Hong Kong? The Tax and Disclosure Trade-offs

The choice of listing vehicle jurisdiction affects both the disclosure requirements and the tax implications of the roadmap. The HKEX accepts issuers incorporated in Hong Kong, Bermuda, the Cayman Islands, or the People’s Republic of China (for H-share listings). For quantum computing companies, the Cayman Islands remains the most common jurisdiction due to its flexible corporate governance framework and absence of capital gains tax. However, the Cayman Islands does not have a double taxation agreement with the PRC, meaning that dividends paid from a PRC operating subsidiary to a Cayman holding company are subject to PRC withholding tax at 10% (reducible to 5% if the Cayman company is the “beneficial owner” of the dividends and meets the PRC’s substance requirements).

A Hong Kong-incorporated issuer, by contrast, benefits from the Hong Kong-PRC Double Taxation Arrangement, which reduces the withholding tax on dividends to 5% if the Hong Kong company holds at least 25% of the PRC subsidiary. However, Hong Kong-incorporated issuers are subject to Hong Kong profits tax at the standard rate of 16.5% (8.25% for the first HKD 2 million of assessable profits). For a quantum computing issuer with significant R&D expenditure, the Hong Kong tax regime offers a 300% super-deduction for qualifying R&D expenses under the Inland Revenue Ordinance (Cap. 112, Section 16B), which can significantly reduce the effective tax rate.

Sponsor and Director Due Diligence: Verifying the Unverifiable

The most contentious area of roadmap disclosure is the verification of forward-looking technical claims. For quantum computing, where many milestones are years from realization, sponsors face the challenge of validating claims that cannot be tested at the time of listing. The HKEX’s GL117-24 guidance requires sponsors to conduct “reasonable due diligence” on each roadmap milestone, including: (a) reviewing internal testing data and laboratory notebooks; (b) interviewing the issuer’s chief technology officer and lead scientists; (c) obtaining a third-party technical assessment from an independent quantum computing expert; and (d) stress-testing the roadmap against alternative technical pathways.

The Third-Party Technical Assessor: Independence and Qualifications

The HKEX requires that the third-party technical assessor be independent of the issuer, the sponsor, and the reporting accountant. The assessor must have at least five years of professional experience in quantum computing, as evidenced by publications in peer-reviewed journals, patents, or industry recognition. The assessor’s report must address: (a) the feasibility of each milestone given the issuer’s current technical capabilities; (b) the reasonableness of the timeline; (c) the identification of key technical risks; and (d) a comparison with the issuer’s competitors’ roadmaps.

A recent example from a March 2025 filing: a photonic quantum computing issuer engaged a professor from the University of Oxford’s Department of Physics as its technical assessor. The professor’s report, which was included in the prospectus as an exhibit, concluded that the issuer’s milestone of achieving a 100-photon entangled state by Q2 2026 was “achievable with a 70% probability” based on the issuer’s current photon loss rate of 2.8 dB per component and its patent-pending waveguide design. The report also identified two risks not disclosed by the issuer: the dependency on a single supplier for the waveguide material and the potential for interference from ambient temperature fluctuations.

Director Liability and the “Safe Harbor” for Forward-Looking Statements

Directors of quantum computing issuers face personal liability for roadmap disclosures under Section 384 of the Securities and Futures Ordinance. The ordinance provides a “safe harbor” for forward-looking statements if the director can demonstrate that the statement was (a) based on reasonable assumptions, (b) made in good faith, and (c) clearly identified as forward-looking. However, the HKEX’s Listing Division has taken the position that a roadmap milestone is not a “forward-looking statement” in the traditional sense — it is a representation of the issuer’s current technical plan, and the issuer must have a reasonable basis for believing the milestone is achievable.

The SFC’s enforcement action against the directors of a now-defunct quantum computing issuer (SFC v. Chen and Others, 2023) established that directors must personally review and approve the roadmap disclosures. In that case, the directors were found liable for a roadmap that claimed “commercial-scale quantum advantage by 2025” when the issuer had not yet demonstrated a working two-qubit gate. The court imposed a five-year disqualification order against the CEO and a HKD 500,000 fine against each director.

Practical Takeaways for Issuers and Sponsors

1. Start roadmap preparation at least 12 months before the intended A1 filing date to allow time for third-party technical assessment, PRC regulatory clearance (if applicable), and sponsor due diligence, as the HKEX’s Listing Division now routinely issues second-round queries on roadmap disclosures that can delay the application by 3-6 months.

2. Ensure every roadmap milestone includes a specific, measurable metric (e.g., qubit count, gate fidelity, revenue, or customer count) with a defined timeline, and support each milestone with internal testing data, third-party validation, or a published peer-reviewed study — the HKEX’s Listing Committee has rejected at least two applications in 2025 for using “we aim to” language without quantifiable targets.

3. For issuers with PRC operations, conduct a preliminary data classification assessment under the PRC Data Security Law before drafting the roadmap, and engage a PRC cybersecurity law firm to determine whether a CAC cybersecurity review is required — the review process takes 60-90 days and cannot be accelerated.

4. Engage a third-party technical assessor with verifiable quantum computing expertise (defined by the HKEX as at least five years of professional experience in the field) and ensure the assessor’s report addresses feasibility, timeline reasonableness, and risk identification for each milestone — the report must be included in the prospectus or incorporated by reference.

5. Directors should personally review and approve the roadmap disclosures, maintain a written record of the assumptions underlying each milestone, and ensure that the prospectus includes a clear contingency disclosure identifying the top three technical risks and their mitigation plans, as the SFC’s enforcement division has confirmed it will treat roadmap disclosures with the same rigor as financial forecasts under Section 384 of the Securities and Futures Ordinance (Cap. 571).