Indicative timeline for an IPO in Hong Kong

Key Actions 

• Kick-Off Meeting 
• Submission of Sponsors’ Engagement Letters to the Stock Exchange 
• Legal and Financial Due Diligence 
• Verification 
• Listing Application 
• Completion of Pre-IPO Investments 
• Vetting by the Regulators 
• Listing Hearing 
• Roadshow and Book Building 
• Prospectus Registration 
• Publication of Hong Kong Prospectus 
• Public Offering and International Offering 
• Pricing 
• Allocation 
• Bring Down Due Diligence 
• Listing 
• Stabilisation 

Key Documents 

• Prospectus (Listing Document) 
• Accountants’ Report 
• Profit Forecast Memorandum and Cash Flow Forecast Memorandum 
• Waiver Applications (If Required) 
• Cornerstone Investment Agreements 
• Pre-Deal Research Reports 
• Underwriting Agreements 
• Lock-Up Undertakings 
• International Offering Circular 
• Legal Opinions 
• Accountants’ Comfort Letters 

Indicative Timeline 

Common Factors That Cause Timeline Delays 

When advising on an initial public offering (IPO) in Hong Kong with international or cross-border aspects, non-Hong Kong lawyers must understand when key actions take place. This is especially true if:

• A Hong Kong company is conducting an IPO and listing in Hong Kong and those advising on the sale of the securities in other jurisdictions want to understand the timing expectations in Hong Kong.
• A non-Hong Kong company is conducting an IPO and listing in Hong Kong and the company’s home jurisdiction advisors want to understand the timing expectations in Hong Kong.

This Note highlights the key actions that take place and the key documents necessary for an IPO in Hong Kong. It provides an indicative timeline for a Hong Kong-incorporated issuer or an overseas issuer conducting an IPO in Hong Kong on the Main Board of the Hong Kong Stock Exchange (Stock Exchange).

The timeline does not cover the pre-IPO preparations that an issuer typically undertakes before kicking off an IPO process, such as:

• Corporate restructuring.
• Appointment of sponsors and other professional parties.
• Finalising the composition of the board of directors.
• Appointment of company secretary.
• Establishment of board committees.
• Setting up employee benefit plans.

Key Actions

The timeline below covers the following key actions or events that must occur as the issuer (also referred to as the listing applicant) prepares to conduct an IPO.

Kick-Off Meeting

An IPO process officially starts with a kick-off meeting. During a kick-off meeting, professional parties meet and discuss the proposed timetable and work streams of the IPO. Usually, the management of the listing applicant will give an overview presentation about the business and financial status of the issuer.

Submission of Sponsors’ Engagement Letters to the Stock Exchange

Every listing applicant must appoint a sponsor (usually an investment bank) to assist it with its listing application.

The sponsor must be licensed or registered under the Securities and Futures Ordinance (SFO) and permitted to undertake work as a sponsor.

The issuer can appoint one sponsor, or more than one joint sponsors. In either case, at least one sponsor must be independent of the issuer. The Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (Listing Rules) set out a series of tests under which a sponsor would not be considered independent.

The sponsors must submit the sponsors’ engagement letters to the Stock Exchange at least two months before the listing application.

Once appointed, a sponsor must notify the Stock Exchange in writing of its appointment as soon as practicable. It must submit the Sponsor Engagement Notification Form (SE001), together with a copy of the sponsor’s engagement letter, to the Stock Exchange through the Stock Exchange e-Submission System (HKEX-ESS). Once the Stock Exchange receives the notification, it will notify the sponsor of the earliest time at which the listing applicant can submit the listing application.

If the Stock Exchange considers that a sponsor has not notified the Stock Exchange of its appointment as soon as practicable, it may treat the date of the notification as the date of the sponsor’s formal appointment when determining whether the listing applicant met the two months requirement (see above). Normally, the Stock Exchange expects notification within five business days from the date of the sponsor engagement letter.

Legal and Financial Due Diligence

The Listing Rules and the Code of Conduct for Persons Licenced by or Registered with the Securities and Futures Commission (Code of Conduct) require sponsors to conduct reasonable due diligence inquiries on the listing applicant. Practice Note 21 of the Listing Rules sets out the Stock Exchange’s expectations of the due diligence sponsors should perform.

Sponsors must maintain records of their due diligence work to demonstrate their compliance with the relevant rules and regulations to the Stock Exchange and the Securities and Futures Commission (SFC).

Verification

The Companies (Winding Up and Miscellaneous Provisions) Ordinance (CWUMPO) imposes prospectus liabilities. The issuer’s directors and any person who has authorised the issue of a prospectus (including the sponsors) can be liable if there is any untrue statement or material omission in a prospectus. The SFO also imposes civil and criminal liabilities on a person if there is disclosure of false or misleading information that induces transactions.

To assist the issuer, its directors, and sponsors in fulfilling their obligations to check that the listing document is accurate and complete in all material respects and not misleading or deceptive, verification procedures will be performed. Every statement in a prospectus will be verified, by reference to independent documentary evidence if possible.

Verification of the application proof prospectus must be completed in all material respects before the sponsor files a listing application on behalf of a listing applicant. The application proof prospectus must be substantially complete except for information that, by its nature, can only be finalised and incorporated later. Before bulk printing the final prospectus, the listing applicant, its directors, and the relevant professional parties will sign the verification notes. The verification notes show the allocation of the responsibilities for checking the accuracy of each statement to the relevant parties.

The sponsors (and the sponsors’ legal counsel) will lead the verification process. The sponsors should maintain records of their verification works (for example, the verification notes and the supporting documents) as they might need to put forward a defence that they had reasonable grounds to believe the statements included in the prospectus were true.

Listing Application

The Listing Rules list the documents that the listing applicant must file at the Stock Exchange and the SFC at the time of the listing application (A1 filing).

The listing application documents include:

• Application proof prospectus.
• Listing application form (Form A1) which sets out the basic information of the listing applicant and the proposed offering structure.
• Directors’ confirmation.
• Draft legal opinions.
• Profit forecast memorandum and cash flow forecast memorandum.
• Final or advanced draft waiver applications (if needed).
• Listing applicant’s certificate of incorporation or equivalent document.
• Initial listing fees.
• Other Stock Exchange forms.

The listing applicant, the sponsors, and the relevant professional parties will prepare the listing application package.

The application documents should be submitted to the Stock Exchange through HKEX-ESS, and certain documents (for example, 11 copies of the application proof prospectus) should be physically delivered to the Stock Exchange’s office. The sponsor must obtain a company case number from the Stock Exchange at least three business days before submitting a listing application. The sponsor must complete the electronic version of the listing application form M103 and submit it through HKEX-ESS in advance of the filing.

The listing applicant must also submit a redacted version of the application proof prospectus to the Stock Exchange for publication on the Stock Exchange website. All offer-related information will be redacted in this version.

Completion of Pre-IPO Investments

The listing applicant is permitted to receive certain forms of pre-IPO investments for various purposes, such as raising funds for general working capital. Generally, the Stock Exchange does not object to pre-IPO investments in the issuer.

Pursuant to Stock Exchange Guidance Letter GL43-12, all pre-IPO investments in the issuer must be completed at least 28 clear days before the date of listing application. If not, the Stock Exchange will delay the listing date until 120 clear days after the completion or divestment of the last pre-IPO investments (120 Day Delay Rule). Pre-IPO investments are considered completed only when the funds for the underlying shares are settled and received by the company or the existing shareholders.

There are also certain restrictions which apply to pre-IPO investments. Under the Listing Rules, all shareholders must be treated fairly and equally. The Stock Exchange will require special rights which do not extend to all shareholders to be removed or altered prior to listing.

Generally, pre-IPO investors who divest prior to the listing application will not disrupt the listing process nor affect the equal treatment of shareholders post listing, and there will be no penalty to the listing applicant. However, if the divestment of an existing shareholder involves another shareholder purchasing the shares, the Stock Exchange may consider this a pre-IPO investment made by the other shareholder. If so, the listing applicant will be subject to the 120 Day Delay Rule.

The following divestment rights must be terminated before the listing application:

• Any divestment right granted by the listing applicant or the controlling shareholder to the pre-IPO investor (such as put options, redemption, or repurchase rights).
• Any right permitting the listing applicant or the controlling shareholder to repurchase shares of the pre-IPO investor.

If the listing applicant fails to comply with the requirements on termination of divestment rights, the applicant shall be subject to the 120 Day Delay Rule from the date of exercise or termination of any divestment right existing on the date of the listing application.

Parties should consider the terms of pre-IPO investments carefully before entering into any pre-IPO investment agreement. The Stock Exchange will review the terms of pre-IPO investments during the listing application vetting process. If the Stock Exchange considers that the pre-IPO investment breaches the general principal of equal treatment of shareholders under the Listing Rules, it might require the listing applicant to modify the terms of the pre-IPO investments. This might delay the listing process.

Vetting by the Regulators

Under the Listing Rules, listing applicants must submit every application for listing to the Listing Division of the Stock Exchange (Listing Division). The Listing Division can either reject the applicant or recommend it to the Listing Committee of the Stock Exchange (Listing Committee) for its approval or rejection. The Listing Division conducts detailed vetting of the listing application based on eligibility, suitability, compliance with the rules, and sufficient disclosure.

Under the dual filing arrangements, a listing applicant must also file the application with the SFC via the Stock Exchange. The SFC can raise any concern under the Securities and Futures (Stock Market Listing) Rules (SMLR) and is empowered to object to a listing application.

The regulators will raise comments and queries on the listing application. The listing applicant and the relevant parties will prepare responses to address the regulators’ comments and queries and revise the draft prospectus if necessary.

The regulators will generally provide a first round of comments within 15 business days from receipt of listing application. There is no pre-set time frame for the overall vetting of the listing application. The time frame will depend on various factors, such as the listing applicant’s response time and quality of response.

Listing Hearing

Once the listing applicant has addressed all the regulators’ comments or queries, the Listing Division recommends the listing application to the Listing Committee. The Listing Committee reviews the application and determines whether the listing applicant is suitable to proceed with its IPO.

If the Listing Committee approves a listing, the Stock Exchange will issue a notification of approval in principle to the listing applicant.

Roadshow and Book Building

During the roadshow, the management of the listing applicant will meet key investors to present the investment case for the listing applicant.

Underwriters usually conduct book building at the same time as the roadshow. Book building is a price discovery process to determine the IPO offer price based on potential investors’ interest in and orders for shares in the offering. Effective from 5 August 2022, the Code of Conduct includes conduct requirements for intermediaries involved in book building activities.

A red-herring prospectus, which is a near-final prospectus without offer pricing terms, will be distributed to potential investors to assist in the book building and roadshow.

Prospectus Registration

Pursuant to the CWUMPO, the listing applicant must register a prospectus at the Companies Registry before distributing it to the public in Hong Kong.

The listing applicant’s Hong Kong legal counsel will submit the relevant documents to the Companies Registry at least one business day before the publication of the prospectus. Apart from the final proof prospectus, the documents required for prospectus registration include:

• Application forms certified by the directors.
• Certified copies of material contracts of the listing applicant.
• Written consents of the experts named in the prospectus.
• Translation certificates.

Pursuant to the Listing Rules, a listing applicant must give at least 14 days’ notice to the Stock Exchange of the proposed date of prospectus registration.

Publication of Hong Kong Prospectus

According to the Stock Exchange’s paperless listing and subscription regime, from 5 July 2021, all listing documents will be published solely in an electronic form and the new listing subscriptions will be made through online electronic channels.

Public Offering and International Offering

A Hong Kong IPO usually includes a Hong Kong public offering and an international offering. A Hong Kong public offering is open to members of the public in Hong Kong. It will last for at least three and a half days. An international offering, also known as the “placing tranche,” is for institutional and professional investors.

Generally, ten percent of the total offer shares is initially allocated to the Hong Kong public offering tranche. The remaining 90 percent of the total offer shares are allocated to the placing tranche, subject to clawback arrangements.

Pricing

Once the book building is completed, the final offer price will be agreed between the listing applicant, the selling shareholders (if any), and the underwriters.

Allocation

The allocation of offer shares to investors in the Hong Kong public offering will be based on the level of valid applications received under the Hong Kong public offering. Allocation can be by ballot if the Hong Kong public offering is over-subscribed.

The allocation of offer shares in the international offering will be in accordance with the book building process.

The allocation of the offer shares between the Hong Kong public offering and the international offering is subject to adjustment. Paragraph 4.2 of Practice Note 18 of the Listing Rules requires a clawback mechanism to be put in place. If the Hong Kong public offering is significantly over-subscribed, shares initially allocated to the international offering tranche will be clawed back to the Hong Kong public offering tranche, according to prescribed percentages. For example, when the total demand for shares in the Hong Kong public offering tranche is 100 times or more the initial allocation, the number of shares under the Hong Kong public offering tranche will be increased to 50% of the shares initially available under the IPO.

Bring Down Due Diligence

The underwriters and their counsel usually conduct a bring down due diligence call with the management of the listing applicant before listing. The management must confirm whether there have been any material changes or updates to the answers provided at previous due diligence interviews.

Listing

Dealings in shares on the Stock Exchange commence on the listing date.

Stabilisation

The stabilising manager can over-allocate or effect transactions to stabilise or support the market price of the shares at a higher level after the listing date. All stabilisation actions must end on the 30th day after the last day for lodging an application under the Hong Kong public offering. The stablisation manager must conduct stabilisation activities in accordance with the Securities and Futures (Price Stabilizing) Rules.

The listing applicant or the selling shareholder may grant the underwriters an over-allotment option (more commonly known as the “greenshoe”). Under the greenshoe, the issuer agrees to issue and allot shares, or the selling shareholder agrees to sell additional shares, of up to 15% of the IPO offer shares to cover over-allocations.

Key Documents

The timeline below covers the following key documents that must be produced as the issuer prepares to conduct an IPO.

Prospectus (Listing Document)

The Listing Rules, the SFO, the CWUMPO, and various guidance letters issued by the Stock Exchange set out the content requirements for a prospectus.

The key sections of a prospectus are:

• Business, covering history and development, an industry overview, the directors and senior management, and risk factors.
• Financial information, setting out management’s discussion and analysis of historical financial information of the listing applicant (MD&A).
• Offering information, including the structure of the global offering and underwriting.
• Statutory and general information, covering corporate information, a regulatory overview, and share capital.
• Expert reports, which includes the accountants’ report, profit forecast (if any), valuation report (if any), and technical reports (such as for mining companies).

Usually, the underwriters’ counsel will lead the drafting of offering-related sections such as the structure of the global offering and underwriting. The issuer’s counsel will prepare company-related sections such as history and development, and statutory and general information. Typically, the issuer’s counsel will also draft the business and MD&A sections and will have overall control of the prospectus. However, there are no set rules for this, and the underwriters’ counsel can also take up these roles.

Under the CWUMPO, a listing applicant for a Hong Kong IPO must have a bilingual prospectus (in both English and Chinese). Professional printers usually translate the prospectus and also help with professional typesetting and printing. Prospectuses are usually drafted in English and then translated into Chinese. Some issuers prefer to have certain prospectus sections (such as the business section) drafted in Chinese first and then translated into English.

A listing applicant must submit an application proof prospectus to the Stock Exchange at the time of listing application.

After the listing applicant submits the listing application, a redacted version of the application proof prospectus will be available on the Stock Exchange website.

Paragraph 18 of Practice Note 22 to the Listing Rule permits a listing applicant to make a confidential filing if the listing applicant has been listed on a recognised overseas exchange for more than five years and has a market capitalisation of USD400 million or more at the time of the listing application. In a confidential filing, there is no requirement to publish the application proof on the Stock Exchange website.

A listing applicant must submit a post hearing information pack (PHIP), which is a near-final prospectus, to the Stock Exchange for publication on the Stock Exchange website. The listing applicant must submit the PHIP no later than whichever is earlier of:

• The distribution of any red-herring document to institutional or professional investors.
• The time at which book-building commences.

Accountants’ Report

A listing applicant must include an accountants’ report in the prospectus. The Listing Rules require the accountants’ report to include the listing applicant’s financial results for the three financial years immediately preceding the issue of the prospectus (track record period). The Listing Rules also requires that the latest financial period report for a listing applicant must have ended fewer than six months before the date of the prospectus. This means that stub period financial information will be required if the track record financial statements end more than six months before the date of the prospectus.

The reporting accountants of the listing applicant will prepare the accountants’ report. They must prepare it in accordance with one of the following accounting standards:

• Hong Kong Financial Reporting Standards (HKFRS).
• International Financial Reporting Standards (IFRS).
• For PRC incorporated companies, China Accounting Standards for Business Enterprises (CASBE).

Profit Forecast Memorandum and Cash Flow Forecast Memorandum

It is optional for a listing applicant to include a profit forecast in a prospectus. It is not common for listing applicants to include profit forecasts or estimates voluntarily.

If the listing applicant does not include a profit forecast in a prospectus, it must still submit profit and cash flow forecast memorandums to the Stock Exchange at the time of listing application. This is to demonstrate the listing applicant’s suitability. The profit forecast memorandum must cover the period up to the forthcoming financial year end date after the date of listing. For example, for a listing date of 30 June 2022, for a 31 December financial year end company, the profit forecast memorandum must cover up to 31 December 2022. The cash flow forecast memorandum must cover at least 12 months from the expected date of publication of the prospectus. The board of the listing applicant prepares these memoranda, typically with the assistance of professional parties.

If the prospectus does contain a profit forecast, the profit forecast memorandum should cover the same period as the profit forecast in the application proof prospectus. The profit forecast must state the principal assumptions upon which it is based.

Waiver Applications (If Required)

If the listing applicant is unable to comply with any of the Listing Rules, the SFO, the CWUMPO, or other applicable laws and regulations, the listing applicant can apply for a waiver from strict compliance with one or more of these laws and regulations. At their discretion, the Stock Exchange or the SFC can waive the listing applicant’s compliance with such requirement on a case-by-case basis.

The listing applicant must submit an advanced draft of any waiver application to the Stock Exchange at the time of listing application. It must submit any final waiver application to the Stock Exchange at least four clear business days before the expected listing hearing date. The listing applicant’s or the underwriters’ Hong Kong legal counsel usually draft waiver applications. The listing applicant must disclose details of the waivers in the prospectus.

Cornerstone Investment Agreements

Cornerstone investors are usually larger institutions or well-known individuals that are guaranteed to receive an allocation of shares in an IPO, irrespective of the final offer price.

The listing applicant and the cornerstone investors will enter into placing agreements (cornerstone investment agreements) before the publication of the prospectus. The Asia Securities Industry & Financial Markets Association (ASIFMA) has published a standard form cornerstone investment agreement which the market tends to follow.

To facilitate over-allocation in the international offering, the cornerstone investors may agree the delivery of the shares for which they have subscribed later than the listing date. Some investors are unwilling to agree to late delivery terms. Even if there is a delayed delivery arrangement, investors cannot delay payment for the shares and must pay before the listing date.

Pursuant to the Stock Exchange’s guidance letter, the listing applicant must disclose details of cornerstone investment agreements, including the identities and background of the investors, in the prospectus.

Cornerstone investment agreements are “material contracts” of the listing applicant and will be available on the Stock Exchange and the issuer’s websites for a period of time (being not less than 14 days) after the publication of the prospectus.

Pre-Deal Research Reports

The research analysts of syndicate members prepare pre-deal research reports. The distribution of pre-deal research reports should follow research report guidelines which are usually prepared by the underwriters’ counsel.

The Code of Conduct and the SFC Corporate Finance Adviser Code of Conduct (CFA Code) impose obligations on research analysts, sponsors, and issuers regarding pre-deal research reports.

Underwriting Agreements

Pursuant to the Listing Rules, an offer for subscription must be fully underwritten. Under the Hong Kong underwriting agreement, in the event that there are insufficient investors acquiring the offer shares, the Hong Kong underwriters for the Hong Kong public offering agree to purchase the Hong Kong public offering shares. Similarly, under the international underwriting agreement, the international underwriters agree to purchase the international offering shares if those shares are undersubscribed.

The listing applicant, the underwriters, and the selling shareholders (if any) enter into the underwriting agreements. The underwriters’ legal counsel usually prepares the underwriting agreements.

The Hong Kong underwriters and the international underwriters will also enter into agreements among underwriters. These are separate agreements governing their rights and obligations in relation to each other and the IPO.

Lock-Up Undertakings

The underwriters usually require the major shareholders and directors of the listing applicant to agree to a “lock-up.” This restricts their ability to sell their shares in the company for an agreed period after the IPO.

For a Hong Kong IPO, the lock-up period is usually 180 days, but the parties may agree to a different lock-up period.

For controlling shareholders (persons holding more than 30% of the issuer), there is a regulatory lock-up rule that controlling shareholders must not:

• Dispose of any shares during the first six months after listing.
• Dispose any shares that would result in such person ceasing to be a controlling shareholder of the company during the second six months after listing.

(Listing Rule 10.07.)

The contractual lock-up period can be longer than the regulatory lock-up period.

International Offering Circular

The final international offering circular will be distributed to institutional investors after pricing. This is the offering document used in the international offering tranche. It consists of the Hong Kong prospectus and an international wrap which includes additional disclosure specifically for international investors, such as risk factors.

Legal Opinions

Legal counsel of the listing applicant and of the underwriters are required to provide certain legal opinions, for example, with regard to the due incorporation of the issuer and due authorisation of the offering of shares.

Offerings made under Regulation S or Rule 144A of the US Securities Act of 1933 (as amended) (US Securities Act) are exempt from the US registration requirements under the US Securities Act. Usually in a listing with a Rule 144A offering, the underwriters will require their US legal counsel to provide a 10b-5 letter giving negative assurance that the contents of the offering document are not materially misleading.

Accountants’ Comfort Letters

Comfort letters are issued by reporting accountants of the listing applicant which provide certain assurance with respect to the accuracy of the financial information included in the prospectus. Comfort letters also set out the applicable accounting standards and reporting procedures.

The underwriters usually require delivery of comfort letters as condition precedent documents of the underwriting agreements. They will also require reporting accountants to provide bring-down comfort letters at the closing of the offering. These confirm that the original comfort letters are still valid as of the closing date.

Indicative Timeline

Below is an indicative timeline for an IPO on the Main Board of the Stock Exchange. It assumes the following:

• The company is applying for a primary listing on the Main Board of the Stock Exchange. It has not been listed, and is not currently planning to list, on any other stock exchange.
• The IPO is a listing with share offering (not listing by way of introduction).
• The listing applicant is neither a special purpose acquisition company (SPAC) nor an issuer resulting from the completion of a de-SPAC transaction (Successor Company). Listings of SPACs and Successor Companies are subject to additional requirements as set out in Chapter 18B of the Listing Rules.
• The issuer is incorporated in Hong Kong or overseas. (If the issuer is incorporated in a jurisdiction where shares of companies incorporated there have never been listed on the Stock Exchange, it must apply to the Stock Exchange and the SFC to demonstrate that it conforms with the shareholder protection standards and requirements of the Listing Rules. Such an issuer may only submit its listing application after the Stock Exchange and the SFC have confirmed that they have no further comment on the level of shareholder protection standards in that jurisdiction.)
• If the issuer was incorporated overseas, it has been registered as a “non-Hong Kong company” at the Hong Kong Companies Registry under Part 16 of the Companies Ordinance.
• The issuer has completed pre-IPO corporate reorganisation.
• The pre-IPO investments of the listing applicant comply with all relevant requirements set out in the Stock Exchange guidance letters.
• The Stock Exchange considers both the listing applicant and its business suitable for listing. The listing applicant fulfils the requisite listing requirements, for example the financial eligibility requirements, management continuity, and ownership continuity requirements.
• For specific types of companies, such as mineral companies, biotech companies. and companies with weighted voting rights, the issuer has complied with the applicable Listing Rules and Stock Exchange requirements.
• The issuer can meet public float requirements.
• All requisite third party consents and approvals have been obtained (from suppliers, customers, and so on).
• The issuer and the sponsor satisfactorily address all enquiries and comments raised by the regulators during the vetting of its listing application (including the prospectus) in a reasonable time period.
• The prospectus includes the issuer’s financial report prepared in accordance with Listing Rules. The latest financial period reported by the reporting accountant ended fewer than six months before the date of the listing document. If needed, the prospectus also includes stub period financial information.
• The issuer complies with all the requirements under the Listing Rules and the relevant laws and regulations (or has obtained the relevant waivers from strict compliance with the Listing Rules and the relevant laws and regulations).

Common Factors That Cause Timeline Delays

A variety of factors can cause minor or significant delays of weeks or months to this indicative timeline. Recognising and attending to these factors as early as possible can mitigate these delays.

Factors that commonly cause delays include:

• The complexity of the due diligence review. For example, if a large number of jurisdictions are involved, the sponsors can incur significant time arranging site visits and third-party due diligence. Coordinating with local counsels to issue legal opinions or due diligence reports can also be time-consuming, especially if local counsel is not familiar with Hong Kong IPO requirements.
• Acquisitions of subsidiaries and businesses conducted during or after the track record period. This can require the preparation and disclosure of additional financial information in the prospectus.
• Legal or regulatory non-compliance incidents. These can affect the listing applicant’s suitability for listing. It can also affect the relevant director’s suitability as a director. This can require additional time for the listing applicant to implement enhanced internal control measures. The listing applicant may also need additional time to clear these issues with the regulators.
• Market conditions affecting investor appetite. This can affect the efficacy of the underwriting syndicate and increase the time needed to secure orders to cover the offering.