Transcription of US companies seeking for listings on Hong Kong exchange
1 US companies seeking for listings on Hong Kong February 2018, the Hong Kong Exchanges and Clearing Limited ( HKEX ) issued a consultation paper seeking public feedback on its proposal to expand the existing listing regime to allow the listing of: Biotech issuers which are pre-profit/pre-revenue; companies from emerging and innovative sectors that have weighted voting rights structures; and companies already listed on the NYSE or Nasdaq to seek for secondary listing . The proposed changes are expected to attract high potential biotech companies as well as already listed companies from around the world to seek for a listing in Hong are some of the topics that US based companies should pay special attention at when considering a Hong Kong listing ?
2 Preparation of financial statements Currently, HKEX requires companies seeking for a primary listing in Hong Kong to prepare financial statements using IFRS or HKFRS. US GAAP financial statements will be accepted for overseas issuers seeking a secondary listing on HKEX. Financial statements are required to be within six months from the date of the prospectus. US companies seeking for primary listing on HKEX will likely trigger the need to also register with the SEC in the US (see below), and therefore, will be required to prepare US GAAP financial statements with the registration with the SEC, as well as IFRS or HKFRS financial statements for the listing on HKEX. companies may consider seeking a waiver from HKEX to allow them to prepare US GAAP financial by the reporting accountant companies are required to appoint a reporting accountant and include the following in the prospectus:-Accountant s report on the historical financial statements for the past three years, similar to an independent audit opinion.
3 -Report on unaudited pro forma statement of adjusted net tangible assets, giving effect to the IPO. In addition, the reporting accountant is required to issue the following letters privately to the companies and/or sponsors, as appropriate:-Letter on working capital sufficiency-Letter on statement of indebtedness-Comfort letter on certain financial information Registration with the SEC in the US All US companies are required to register with the SEC if it has more than 500 shareholders of record and its total assets exceed US$1,000,000. US companies seeking for listing in Hong Kong will likely trigger the need to register with the SEC and subject to its oversight, unless they meet the definition of a Foreign Private Issuer, as defined by the SEC.
4 This content is for general information purposes only, and should not be used as a substitute for consultation with professionaladvisors. 2018 PricewaterhouseCoopers Limited. All rights reserved. PwC refers to the Hong Kong member firm, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see for further details. HK-20180321-2-C1 See alsoPwC s Going Public GuideListing document submission and vetting companies are required to submit an application form, known as the A1 to HKEX for kick off the vetting process. The initial A1 form submitted to the HKEX is a public document. This is different from the confidential submission and review process in the US.
5 companies are required to appoint a sponsor two months prior to the initial A1 submission. companies are required to do a private submission of the board s profit forecast memorandum covering the period up to the forthcoming financial year end after the date of listing and cash flow forecast memorandum covering at least 12 months from the date of usKennedy Liu Partner, Head of Capital Markets and Accounting Advisory ServicesPwC Mainland China and Hong Kong Tel: +852 2289 1881 Email: ChanPartner, Capital Market Services Co-HeadPwC Mainland China and Hong KongTel: +852 2289 1128 Email: LeungPartner, Capital Market ServicesPwC Mainland China and Hong KongTel: +852 2289 1809 Email.
