Here are 7 practical tips on choosing a listing place and intermediary.
Editor’s note: This article comes from WeChat public account “Futu-Ease” (ID: futu-ie) , author: rich professional and reliable way of ease.
In recent years, with the continuous maturity of early-stage investment companies in the Chinese venture capital industry, a large number of new economic companies have reached the stage of IPO. Due to the restrictions of the domestic listing system and the increasing internationalization of new economy companies, many companies will choose to list on capital markets such as Hong Kong stocks and US stocks. When companies put overseas IPOs on the agenda, they have to start thinking about the specific listing place and the choice of intermediaries.
This article is the last article of “Overseas IPO Strategy”. In today’s push, Futu Anyi will share 7 experiences on how to choose a listing place and intermediary agency.
Abstract of this article:
Four factors to consider when choosing a listing place
Types of IPO intermediaries
Three principles for selecting an IPO intermediary institution
* This article is compiled from “Overseas IPO Strategy” produced by Futu Avocado. Click to view related reading: CEO must read: US articles for overseas IPO strategies , CEO must read: overseas IPO strategies Hong Kong articles
First, the conditions for listing.
The NYSE and NASDAQ follow the disclosure principle. The listing requirements are relatively loose, while the listing requirements of the Hong Kong Stock Exchange are more cumbersome. In the past many years, American exchanges have been very receptive to high-growth start-ups. In recent years, the Hong Kong Stock Exchange has also slowly changed its listing system to more actively embrace new economy companies.
Second, the type of business itself.
The U.S. market is the preferred listing place for high-tech companies. Investors in the Hong Kong market are more focused on the “China growth” theme, preferring companies with good market performance.
Third, investor groups.
The United States has the largest investor pool in the world. Hong Kong is the Asian financial center, and many global funds have Asian headquarters in Hong Kong. Both markets can attract high-quality international investors.
In terms of research coverage, the United States has special analysts or fund managers for subdivided industries and has a deeper understanding of the industry. For the companies to be listed, more companies can be listed on the market, and their value can be more fully recognized. Fund managers or analysts in Hong Kong usually cover the entire Chinese or Asian market, rather than researching a specific industry.
Fourth, communication with regulatory agencies.
Compared to the United States, Hong Kong is adjacent to the mainland of China, with a much closer geographical distance, and the differences in language and culture will certainly not be greater than between China and the United States. Therefore, Hong Kong will definitely be more convenient than the United States in communication with the regulator A lot of.
Second, Types of intermediaries
When a company chooses a listing place with reference to its own conditions, it can start preparing for listing. The first step in preparing for listing is to choose an intermediary. Generally speaking, there are three types of intermediaries: investment banks, accountants, auditors and law firms, of which investment banks are the top priority.
Investment banks are divided into foreign investment banks and Chinese investment banks. If companies choose to go public in the United States, foreign investment banks may be the first choice.
If a company chooses to list in Hong Kong, foreign investment banks may not be the first choice. Because in the Hong Kong market, Chinese investment banks are also very powerful. Judging from the IPOs of the past few years, the market share of Chinese investment banks is getting higher and higher. Therefore, when companies choose investment banks, they often choose according to the listing place.
In terms of auditing, companies usually choose to use the Big Four accounting firms. The service quality of the four major accounting firms is comparable, and the biggest difference is probably which one is more familiar with the founders and the listing team. In other words, he can quickly understand and audit the work according to the needs of the enterprise.
In terms of law firms, the strict and strict standards of law firms often have a great impact on listing.
three, selectionThree Principles of Intermediary Institutions
Regarding the choice of intermediary agencies, Futu Anyi has three suggestions.
First, consider the project team of the agency.
When choosing an intermediary, pay great attention to the team rather than the brand of the intermediary. How about the previous experience and resume including the head of the agency team? What about his ability to drive resources? How many similar projects have you executed successfully before? These are important considerations.
Second, we look at the professional services of intermediaries.
From a technical perspective, the gap between institutions may not be particularly large. At this time, the company needs to pay more attention to whether the intermediary agency is diligent in the case of the company to be listed. In other words, it is very important for the intermediary agency to be very mindful of the project of the company to be listed.
Therefore, when choosing an intermediary agency, we must consider whether the intermediary agency has a deeper relationship with the company’s founder or CFO. When they have a close relationship with the company, they are usually willing to invest more. Resources are in it, which is definitely a good thing for the company.
Finally, match the agency according to the characteristics of the enterprise.
The exchange has strict requirements on the number of public shareholders and the stock market value of listed companies. If the company’s shareholding is concentrated, it is necessary to consider the placement of individual investors in the underwriting syndicates of investment banks. , Such as Futu Securities.
Finally, there is another service provider that everyone overlooks, which is the industry consultant. Industry consultants can play a very important role in establishing or constructing a stock story. Therefore, the choice of industry consultants has actually played a very important role in the implementation of the IPO.
“Easy View” is an original sharing section of Futu Anyi, which provides dry goods knowledge of Hong Kong stocks, US stock IPOs and employee stock ownership plans (ESOPs).