Main Procedures of IPO
Following is preparation period
- The company decides IPO
- Based on the future development strategies, the board of directors and the shareholders' meeting are convened to make the decision to list the company in Hong Kong; they select and hire the main intermediary agency and appoint sponsors and other professional advisers.
- The First Coordination Meeting
- The company and the sponsors, underwriters, accountants, and appraisers hold the first listing meeting and work with all parties until the company is listed.
- 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.
- 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 assists the company in submitting preliminary application documents for listing to the Listing Department of the Stock Exchange. If the A1 data is substantially complete, the Listing Department will confirm the receipt and publish the Chinese and English versions of the application on the website.
Following is approval period
- The Listing Department reviews the application
- The Listing Department will then conduct a detailed review of A1 data to assess whether the company is eligible for listing, whether it is suitable for listing, whether the business is sustainable, whether the company complies with the rules and makes full disclosures.
- Answer related questions and submit other listing documents
- The Listing Department will issue the first round of comments within 10 working days upon receipt of the application and request the company to answer the questions. Underwriters and intermediaries assist in the completion of this assignment.
- The Listing Committee reviews the new listing application and determines whether the applicant is suitable for an IPO.
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 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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