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July 2018

July 2018. Introduction of Listing on the Main Board (“MB”) of the Stock Exchange of Hong Kong Limited (“SEHK ”). Listing Requirements for the MB.

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July 2018

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  1. July 2018 Introduction of Listing on the Main Board (“MB”) of the Stock Exchange of Hong Kong Limited (“SEHK”)

  2. Listing Requirements for the MB A new applicant for the MB listing must have a trading record of not less than 3 financial years and should meet oneof the following 3 tests: (I) Profit Test; (II) Market Cap/Revenue Test; and (III) Market Cap/Revenue/ Cash Flow Test.

  3. Listing Requirements for the MB

  4. Suitability for Listing on the MB • The SEHK has considered the following types of companies as unsuitable for listing: • a company which fails to comply with all applicable laws and regulations and where such non-compliance may affect the validity of the business; • a company which is unable to carry on its business independently; • a company whose business is heavily reliant on transactions with connected persons or related parties during the track record period and after listing; and • a company whose assets consist wholly or substantially of cash or short-dated securities, e.g., bills, short-term bonds or other investments with a maturity term of less than a year. (Note: This restriction is not applied to investment companies.)

  5. Listing Process

  6. Listing Process

  7. Major Professional Parties involved in the MB Listing

  8. Major Professional Parties involved in the MB Listing

  9. IPO VETTING PROCEDURES (HKEx-GL61-13, Appendix (2))

  10. Post-IPO Obligations

  11. Post-IPO Obligations

  12. Post-IPO Obligations

  13. Post-IPO Obligations

  14. Post-IPO Obligations

  15. HKEx Consultation Conclusions on Listing Regime for Companies from Emerging and Innovative Sectors • 3 new chapters of the MB listing rules: • Biotech companies – for pre-revenue companies (MB Listing Rule Chapter 18A) • Issuers with Weighted Voting Rights (WVR) structure – for non-standard governance companies (MB Listing Rule Chapter 8A) • Secondary Listing Rules – new concessionary secondary listing route for mainland and international companies (MB Listing Rule Chapter 19C)

  16. Biotech Companies Notes: (1)A Competent Authority includes but not limited to US Food and Drug Administration (FDA), China Food and Drug Administration (CFDA), and European Medicines Agency (EMA). Other authorities will be considered on a case-by-case basis. (2) HKEX-GL92-18 provides, for illustrative purposes only, the examples of types of Sophisticated Investor: (i) a dedicated healthcare or Biotech fund or an established fund with a division/department that specializes or focuses on investments in the biopharmaceutical sector; (ii) a major pharmaceutical/healthcare company; (iii) a venture capital fund of a major pharmaceutical/healthcare company; and (iv) an investor, investment fund or financial institution with minimum assets under management of HK$1 billion.

  17. What is “meaningful investment”? • According to HKEX-GL92-18, the following investment amount, for indicative purpose, will generally be considered as “meaningful investment”: • (i) an investment of not less than 5% of the issued share capital of the applicant at the time of listing if the market capitalization of the applicant is between HK$1.5 billion and HK$3 billion • (ii) an investment of not less than 3% of the issued share capital of the applicant at the time of listing if the market capitalization of the applicant is between HK$ 3 billion and HK$ 8 billion • (iii) an investment of not less than 1% of the issued share capital of the applicant at the time of listing if the market capitalization of the applicant is more than HK$ 8 billion

  18. Biotech Companies

  19. WVR

  20. WVR

  21. WVR

  22. Secondary Listing • Qualifications for Listing • A Qualifying issuer suitable for secondary listing must have a good record of compliance for at least 2 full financial years on a Qualifying Exchange (The New York Stock Exchange LLC, Nasdaq Stock Market or the Main Market of the London Stock Exchange plc (and belonging to the UK Financial Conduct Authority’s “Premium Listing” segment) (MB Listing Rule 19C.04) • A Non-Greater China issuer without a WVR structure must have an expected market capitalization at the time of secondary listing of at least HK$10 billion. All other Qualifying Issuers must satisfy one of the following: • (1) a market capitalization of at least HK$40 billion at the time of listing; or • (2) a market capitalization of at least HK$10 billion at the time of listing and revenue of at least HK$1 billion for the most recent audited financial year. • (MB Listing Rule 19C.05)

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