Main Procedures of IPO

Following is preparation period

The company decides IPO

To convene meetings of directors and shareholders to decide IPO in Hong Kong, according to future development strategy; to select and engage major intermediaries.

The 1st intermediary coordination meeting

The company holds the 1st IPO meeting with underwriter, accountant, solicitor and evaluator, and cooperates with all intermediaries in concerted efforts, until IPO.

Due diligence

The underwriter, accountant, and solicitor, will carry out careful investigation of the business, financial condition, future prospects, major risk factors, legal issues and others, to ensure correct procedures and that nothing is omitted in content of all public documents.

Reorganisation

The underwriter, accountant, and solicitor, will provide professional advice to the company, to reorganize the business, structure and financial condition of the company in consideration of direction of future development, to make the company a new entity conforming to IPO rules, to attract investors.

File making

The underwriter, accountant, and solicitor, will write all documents necessary for all kinds of IPO, including prospectus, accountants report and legal opinion.

Submitting Form A1

The underwriter helps the company to submit preliminary application for IPO to the IPO Division of the Exchange.

Following is approval period

Answering questions and submitting other IPO documents

After Form A1 is submitted, the Hong Kong Exchange will ask questions for the company to answer, and the underwriter and all intermediaries will help in complete the task.

Hearing

The IPO Committee of the Exchange will hold court to hear whether the proposed public company is eligible for IPO, and after approval, the company and underwriter can start a series of propaganda for issuance of shares.

Following is propaganda period

Analyst’s study report
It is generally written by an industrial analyst working for the underwriter, and the industrial analyst will prepare the report to be recommended to investors and fund managers through visits to top management of the company for understanding the business, financial and other conditions of the company, which work is completely independent of the due diligence of the underwriter, and generally prepared after submission of Form A1 and published before road show.

Road show

The road show recommendation organized by the underwriter for the Company is generally in two forms: lunch promotion meeting and one-on-one meeting. Generally, the underwriter will accompany the company top management to visit Hong Kong, Singapore, Tokyo and occidental major cities.

Following is issue period

Accumulative tendering

To determine a price range according to the market condition in issuing, then to invite investors to show their subscription intent in advance within the price range, and finally to determine final issue price by final subscription results.

Placing and public offering

The issue of shares is generally divided into two parts: placing and public offering in Hong Kong IPO. Placing is directional sales to global funds and other institutional investors; and public offering is sales to Hong Kong public.

Pricing and IPO

To seek a desirable equilibrium point according to accumulative subscription order results and market condition in issuing, to determine final issue price of shares. A simple and solemn IPO ceremony will be held in the Trading Hall of the Exchange, Generally on the day of IPO.

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