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Initial Public Offerings (IPO)

Mainboard IPO requirements

Enterprise shall apply to Hong Kong Exchanges and Clearing Limited, according to the procedures and requirements of Mainboard IPO in Hong Kong set out in "IPO Rules - Mainboard"

Basic Conditions


1.
The company must be duly incorporated or otherwise established under the laws of the place where it is incorporated or otherwise established and must be in conformity with those laws and its memorandum and articles of association or equivalent documents
 
 
2.
The company which is a Hong Kong company must not be a private company within the meaning of section 29 of the Companies Ordinance.
 
3.
Both the company and its business must, in the opinion of the Exchange, be suitable for listing.
4.
The company must satisfy either the profit test in rule 8.05(1) or the market capitalization/ revenue/cash flow test in rule 8.05(2) or the market capitalization/revenue test in rule 8.05(3).
 
5.
Upon completion of the listing preparatory work described above, a new applicant's sponsor will submit the listing application on its behalf to our Exchange. Subsequent thereto, our Listing Division colleagues will process the listing application.  More information on the Listing Process of Main Board Listing Process.

Minimum public float

(a)

At least 25% of the issuer’s total issued share capital must at all times be held by the public.
(b)
Have an expected market capitalization at the time of listing of not less than HK$50,000,000.
(c)
The Exchange may, at its discretion, accept a lower percentage of between 15% and 25% in the case of issuers with an expected market capitalization at the time of listing of over HK$10,000,000,000, where it is satisfied that the number of securities concerned and the extent of their distribution would enable the market to operate properly with a lower percentage, and on condition that the issuer will make appropriate disclosure of the lower prescribed percentage of public float in the initial listing document and confirm sufficiency of public float in successive annual reports after listing (see rule 13.35).


Management requirement & undertaking

Management undertaking:
1
Not to sell its interest of the company within 1 year after IPO, maintaining at least 30% of interest in the company
 
 
Management requirement:
1
 At least two of its executive directors must be ordinarily resident in Hong Kong.
1
 It shall set up audit committee
 
Shareholders undertaking:
1
 Not to sell its interests of the company within the first 6 months after IPO

Other requirements


1
The shareholder or director should fully disclosure the business which completing with the company
1
 Cannot issue new shares within the first 6 months after IPO
1
 Cannot use the sole manner of placing in IPO
1
 The portion of public subscription shall be fully underwritten

Three tests of financial requirements

The profit test
The following must satisfy:
(a)

A trading record of not less than three financial years (see rule 4.04)
- during that period which the profit (after tax) attributable to shareholders must, in respect
  of the most recent year, be not less than HK$20,000,000 and,
- The two preceding years, be in aggregate not less than HK$30,000,000.

 
 
 
(b) Management continuity for at least the three preceding financial years; and
(c) Ownership continuity and control for at least the most recent audited financial year.

The market capitalization/revenue/cash flow test
The following must satisfy:
(a)

A trading record of not less than three financial years;
(b)
Management continuity for at least the three preceding financial years;
(c)
Ownership continuity and control for at least the most recent audited financial year;
(d)
A market capitalization of at least HK$2,000,000,000 at the time of listing;
(e)
Revenue of at least HK$500,000,000 for the most recent audited financial year; and
(f)
Positive cash flow from operating activities carried out by the new applicant, or its group, that are to be listed of at least HK$100,000,000 in aggregate for the three preceding financial years.
 

The market capitalization/ revenue test

The following must satisfy:
(a)

A trading record of not less than three financial years;
(b) Management continuity for at least the three preceding financial years;
(c) Ownership continuity and control for at least the most recent audited financial year;
(d) A market capitalization of at least HK$4,000,000,000 at the time of listing;
(e) Revenue of at least HK$500,000,000 for the most recent audited financial year; and
(f) At least 1,000 shareholders at the time of listing.





(Source: Hong Kong Exchanges and Clearing Limited)




For any enquiries, please contact Mr. Ivan Wong at 2317 4045, via fax 2317 4049 or via email.