Overview of Listing Shares in Hong Kong

The Hong Kong Stock Exchange ("the Exchange") operates two markets on which companies may choose to list their shares: the Main Board and the Growth Enterprise Market ("GEM").

Main Board

This is the market for companies that meet the profit and other financial requirements under the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited. Companies listed on the Main Board range from conglomerates and banks to utilities and property developers.

GEM

This is the market for companies from all industries that have growth potential but do not necessarily have a performance track record. This is governed by the Rules Governing the Listing of Securities on the Growth Enterprise Market of the Stock Exchange of Hong Kong Limited.

Offering Mechanisms

The following are the offering mechanisms available for new applicants:

(a) Offer for Subscription

An offer to the public by, or on behalf of, an issuer of its own securities for subscription.

(b) Offer for Sale

An offer to the public by, or on behalf of, the holders or allottees of securities already in issue or agreed to be subscribed.

(c) Placing

The obtaining of subscriptions for, or the sale of securities by, an issuer or intermediary primarily from or to persons selected or approved by the issuer or the intermediary.

(d) Introduction

An application for listing of securities already in issue where no marketing arrangements are required.

Basic Requirements for Listing

The basic requirements for listing equity securities on the Exchange are as follows :-

Main Board

GEM

Jurisdiction

The issuer must be incorporated in one of the following jurisdictions:

Hong Kong;

Bermuda;

Cayman Islands; or

China.

Accounting Standards

A new applicant's accounts must be prepared in accordance with either Hong Kong Financial Reporting Standards or International Financial Reporting Standards.

Suitability for Listing

Both the issuer and its business must, in the opinion of the Exchange, be suitable for listing.

An issuer or its group whose assets consist wholly or substantially of cash or short-dated securities will not be regarded as suitable for listing, except where the issuer or its group is mainly engaged in the securities brokerage business.

Financial Requirements

A new applicant for the Main Board must have a trading record of not less than 3 financial years and have at least HK$50 million of profits in the last 3 financial years (with profits of HK$20 million...