IPO stands for “Initial Public Offering”. An IPO is defined as the process of selling the first shares of a private company to access the public markets.
Choosing a suitable stock market to submit an IPO is a crucial decision as your company shall have an opportunity to access the capital market, especially the international capital market. This stock market can be considered as the platform for your company to raise funds with growth potential.
Hong Kong Exchanges (“HKEx”) is a world-leading capital raising venue for Hong Kongese, Mainland Chinese, and international issuers. HKEx is committed to attracting new listed companies and providing a wealth of benefits for these listed companies, with the following impressive statistics:[1]
- #1 globally in IPO fundraising in five of the past nine years.
- Over HK$2 trillion in IPO funds raised by issuers over the past nine years.
- Over 2,100 listed companies on HKEx including international and Mainland Chinese firms.
There are two markets for companies registering for Hong Kong IPO, known as Mainboard and GEM, with different requirements as below:[2]
| MAINBOARD | GEM | ||
| Market for more established companies. Listings range from conglomerates, banks and property developers to internet companies and healthcare providers
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Market for small to mid–sized companies
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FINANCIAL REQUIREMENTS (SATISFY ONE OF THE BELOW TESTS)
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FINANCIAL REQUIREMENTS | ||
| Profit Test
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Market Cap/ Revenue Test
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Market Cap/Revenue/ Cashflow Test
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• Positive 2-year aggregate OCF ≥ HK$30m • Market cap ≥ HK$150m
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| 3-Year aggregate profit ≥ HK$50m
• Market cap ≥ HK$500m
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• Latest year revenue
≥ HK$500m • Market cap ≥ HK$4bn |
• Latest year revenue ≥ HK$500m
• Market cap ≥ HK$2bn • Positive 3-year aggregate operating cash flow (OCF) ≥ HK$100m |
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| • 25% free float minimum (can reduce to 15% if market cap > HK$10bn)
• Minimum 300 shareholders • 3 years management continuity • 1 year ownership continuity • At least 3 independent directors and control representing at least one-third of the board • Semi-annual financial reporting |
• 25% free float minimum (can reduce
to 15% if market cap > HK$10bn) • Minimum 100 shareholders • 2 years management continuity • 1 year ownership continuity • At least 3 independent directors and control representing at least one-third of the board • Quarterly financial reporting |
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Vietnamese law firms provide a range of advisory services for Hong Kong IPO which assist your company in the process of listing. Accordingly, Vietnamese law firms conduct due diligence on the Company or the group of Companies and identify issues in legal and regulatory compliance, management structure, governance apparatus, capital contribution, regulatory compliance, labour and employment, material contracts, asset and intellectual property rights, and tax compliance. In addition, Vietnamese law firms also provide proactive legal advice and insight for the issuer to assess the options, learn about the regulatory framework, and build strategies in accordance with the law of Vietnam during the listing process.
To execute a successful Hong Kong IPO process, Vietnamese law firms not only conduct the due diligence but also assist in drafting and reviewing of the prospectus (aka Application Proof, or “AP”), filing a registration statement and rendering legal opinions according to other requirements for the Hong Kong IPO process.
To conclude, upon the demand of many companies, the Hong Kong IPO Vietnamese advisory service plays an integral part in providing high-quality legal advice to companies that wish to raise capital for their sustainable development of the cash flow.
If you are having difficulty finding a Hong Kong IPO Vietnamese advisor, please contact us: P & Associates is a professional law firm established in Vietnam and currently has nearly 100 members working at three offices in Ho Chi Minh City, Hanoi and Da Nang. P & Associates are also considered to be one of the leading law firms specialising in law on business in Vietnam, which has a number of notable practice fields in the legal market such as Labour and Employment, Banking Law, Taxes, Purchases, Selling and Merging, Litigation, and IPO advisory services. We are confident to provide clients with legal services regarding Hong Kong IPO Vietnamese advisor optimally and effectively.
[1] https://www.hkexgroup.com/about-hkex/company-information/about-hkex?sc_lang=en
[2] hkex.com.hk/-/media/HKEX-Market/Listing/Getting-Started/201802/201802-new-Listing_en.pdf
