Conditions for overseas listing

Conditions for overseas listing

Do you know overseas listing? Overseas listing refers to the issuance of shares by domestic joint stock companies to overseas investors and public listing on overseas stock exchanges.


1. Conditions for Chinese companies to list in Hong Kong




1. Requirements for listing on the main board:




(1) Purpose of the home court: There are many purposes, including raising funds for larger companies with better foundations and a record of profitability.




(2) Main line business: There are no specific regulations, but in fact, the profit of the main line business must meet the minimum profit requirements.




(3) Business record and profit requirements: The total profit in the three years prior to listing is HK$50 million (the most recent year must reach HK$20 million, and the total for the previous two years).




(4) Statement of business objectives: There are no relevant requirements, but the applicant must provide a general statement about future plans and prospects.




(5) Minimum market capitalization: The market capitalization at the time of listing must reach HK$100 million.




(6) Minimum public float: 25% (if the issuer's market exceeds HK$4 billion, the minimum can be reduced to 10%).




(7) Management and company ownership: The three-year track record period must be operated under substantially the same management and ownership.




(8) Restrictions on the sale of shares by major shareholders: subject to restrictions.




(9) Information disclosure: biannual financial reports.




(10) Underwriting arrangement: The public offering for subscription must be fully underwritten.




(11) Number of shareholders: There must be at least 100 shareholders at the time of listing, and each HKD 1 million issued must be held by not less than three shareholders.




2. Issuance of H shares for listing:




A company registered in China can, through asset reorganization, be approved by the competent department, state-owned assets management department (only applicable to state-owned enterprises) and the China Securities Regulatory Commission to form a joint stock limited company registered in China, and apply for the issuance of H shares to be listed in Hong Kong.




(1) Advantages: Company A is more familiar with the domestic company law and reporting system; B China Securities Regulatory Commission is more supportive in terms of policies for the listing of H shares, the time required is shorter, and the procedures are relatively straightforward.




(2) Disadvantages: In the future, the transfer of company shares or other corporate behaviors will be constrained by domestic regulations.




With the listing of many H-share companies in recent years, the Hong Kong market's ability to accept H-shares has been greatly improved.




3. Buying a shell and listing:




Buying a shell listing refers to the acquisition of a controlling stake in a listed company by a company to be listed, and then injecting assets to achieve the purpose of "reverse takeover and backdoor listing".




Both the Hong Kong Stock Exchange and the SFC have several major restrictions on shell listings:




(1) General acquisition: If the acquirer purchases more than 30% of the shares of the listed company, it must propose a general acquisition to the remaining shareholders.




(2) Re-listing application: Asset acquisition after shell purchase may be regarded as a new listing application by the Stock Exchange.




(3) Company shareholding: Listed companies must maintain sufficient public float, otherwise they may be suspended from trading.




The purpose of fundraising may not be achieved in the initial stage of listing by buying a shell, but the listed company after the acquisition can be used for allotment and rights issue fundraising; according to the "Red Chip Guidelines", all Chinese-funded holding companies buying shells overseas are subject to strict restrictions. In the case of an existing acquisition target, the preparation time for a shell listing is shorter and the work is simpler. However, more time and planning are needed to circumvent the regulations of various regulations. Buying a shell listing is sometimes more cumbersome than applying for a new listing. At the same time, many domestic and Hong Kong approval procedures cannot necessarily be omitted.




4. Requirements for listing on the Growth Enterprise Market:




(1) Purpose of the home court: There are many purposes, including raising funds for larger companies with better foundations and a record of profitability.




(2) Main line business: A single business must be engaged in, but peripheral business activities surrounding the single business are allowed.




(3) Business record and profit requirements: There is no minimum profit requirement. However, the company must have an "active business record" for 24 months (if the turnover, total assets or market value at the time of listing exceeds HK$500 million, the issuer can apply to reduce the "active business record" to 12 months).




(4) Statement of business objectives: The applicant's overall business objectives are required and an explanation of how the company plans to achieve those objectives for the remainder of the financial year of listing and the two following financial years.




(5) Minimum market value: There is no specific requirement, but in fact it cannot be less than HK$46 million at the time of listing.




(6) Minimum public float: HK$30 million or 25% of the issued share capital (if the market value exceeds HK$4 billion, the minimum public float can be reduced to 20%).




(7) Management and company ownership: During the period of “active business record”, it must operate under substantially the same management and ownership.




(8) Restrictions on the sale of shares by major shareholders: subject to restrictions.




(9) Information disclosure: Once disclosed on a quarterly basis, the interim and annual reports must list the comparison between actual operating performance and operating objectives.




(10) Underwriting arrangements: There are no mandatory underwriting regulations, but if the issuer wants to raise new funds, new shares can only be listed when the minimum subscription amount listed in the prospectus is reached.




5. Issuance of red chips for listing:




A red-chip listed company refers to a holding company incorporated overseas (including Hong Kong, Bermuda or the Cayman Islands) that, as a listed individual, applies for the issuance of red-chip shares for listing.




Advantages: A red chip company is registered overseas, and the equity of the controlling shareholder can be circulated 6 months after listing; B is the most flexible in the operation of the stock market after listing, such as rights issue and rights issue.




2. The composition and characteristics of the U.S. securities market




1. The composition of the U.S. securities market:




(1) The national securities markets mainly include: New York Stock Exchange (NYSE), American Stock Exchange (AMEX), Nasdaq Stock Market (NASDAQ) and Bulletin Board Market (OTCBB);




(2) Regional securities markets include: Philadelphia Stock Exchange (PHSE), Pacific Stock Exchange (PASE), Cincinnati Stock Exchange (CISE), Midwest Stock Exchange (MWSE) and Chicago Board Options Exchange (CHICAGOBOARDOPTIONSEXCHANGE) Wait.




2. Characteristics of the national market:




(1) New York Stock Exchange (NYSE): It has the characteristics of a sound organizational structure, the most complete equipment, the strictest management, and high listing standards. Listed companies are mainly the largest companies in the world. Companies such as China Telecom are listed on this exchange;




(2) American Stock Exchange (AMEX): Mature and regulated operation, prominent stock and derivative securities trading. The listing conditions are lower than the New York Stock Exchange, but it also has a history of hundreds of years. Many traditional industries and foreign companies are listed on this stock market;




(3) Nasdaq Stock Exchange (NASDAQ): A complete electronic securities trading market. The world's second largest securities market. Securities trading was active. It adopts the agency trading system of securities companies, and is divided into national board and small board according to the size of listed companies. Most of the companies targeted are large and medium-sized companies with high growth potential, not just technology stocks; (4) Bulletin Board Market (OTCBB): It is a market directly regulated by the Nasdaq stock market and has the same characteristics as the Nasdaq stock market. means and methods of transaction. Its listing requirements for enterprises are relatively loose, and the time and cost of listing are relatively low, which mainly meets the listing and financing needs of growing small and medium-sized enterprises.




3. Basic conditions for listing NYSE requirements for listing of foreign companies in the United States:




As a world-wide stock exchange, the New York Stock Exchange also accepts foreign companies to be listed, and the listing requirements are stricter than those of domestic companies, including:




(1) The number of shares held by the public shall not be less than 2.5 million shares;




(2) The number of shareholders with more than 100 shares is not less than 5,000;




(3) The company's stock market value is not less than 100 million US dollars;




(4) The company must be profitable for the last 3 consecutive fiscal years and be not less than $2.5 million in the last year, not less than $2 million in each of the first two years, or not less than $4.5 million in the last year, 3 Annual cumulative not less than 6.5 million US dollars;




(5) The net tangible assets of the company are not less than US$100 million;




(6) Multiple requirements for the management and operation of the company;




(7) Other relevant factors, such as the relative stability of the industry to which the company belongs, the company’s position in the industry, the market conditions of the company’s products, the company’s prospects, and the public’s interest in the company’s stock, etc.




3. Requirements for listing on the American Stock Exchange




1. To be listed on the U.S. stock exchange, the following conditions must be met:




(1) At least 500,000 shares must be publicly owned in the market;




(2) The market value must be at least US$3,000,000;




(3) At least 800 shareholders (each shareholder needs to own more than 100 shares);




(4) A minimum pre-tax income of $750,000 in the previous fiscal year.




2. NASDAQ listing conditions:




(1) A net worth of more than $4 million.




(2) The total market value of the stock must be at least US$1 million.




(3) There must be more than 300 shareholders.




(4) A minimum pre-tax income of US$750,000 in the previous fiscal year.




(5) The annual financial statements must be submitted to the SEC and the company's shareholders for reference.




(6) At least three "MarketMakers" must be involved in the case (each registered MarketMaker must have the ability to buy or sell more than 100 shares at the normal bid and ask prices, and All transaction prices and volumes must be reported to the National Association of Securities Dealers (NASD) within 90 seconds of each transaction.




3. NASDAQ provides optional listing standards for non-US companies




Option one:




In terms of financial status, tangible net assets are required to be not less than 4 million US dollars; the pre-tax profit in the most recent year (or two of the last three years) is not less than 700,000 US dollars, and the after-tax profit is not less than 400,000 US dollars, and the market value of the market Not less than 3 million US dollars, public shareholders hold more than 1 million shares, or more than 500,000 shares and the average daily trading volume is more than 2,000 shares, but there are not less than 400 US shareholders, and the stock price is not less than 5 US dollars.




Option two:




Tangible net assets of not less than 12 million US dollars, public shareholders with a shareholding value of not less than 15 million US dollars, holding not less than 1 million shares, and not less than 400 US shareholders; there is no uniform requirement for pre-tax profits; in addition The company must have a trading record of at least three years and a stock price of at least $3.




4. OTCBB listing conditions


The OTCBB market is a stock trading system managed by Nasdaq, an electronic counter market for small and medium-sized enterprises and start-ups. The stocks of many companies are often listed on the system first, to obtain initial development funds, and after accumulating expansion over a period of time, they are upgraded to the above-mentioned markets after meeting the listing requirements of Nasdaq or the New York Stock Exchange.


Compared with Nasdaq, the OTCBB market wins with a low threshold. It basically has no requirements on the scale or profitability of enterprises. As long as there are more than three market makers willing to make a market for the securities, corporate stocks can enter the OTCBB market. circulated. In November 2003, about 3,400 companies were listed on the OTCBB. In fact, the Nasdaq stock market company itself is a company listed on the OTCBB, and its stock code is NDAQ.


A company listed on the OTCBB, as long as its net assets reach US$4 million, annual after-tax profit exceeds US$750,000 or market value reaches US$50 million, there are more than 300 shareholders, and the stock price reaches US$4 per share, it can be directly listed on NASDAQ Dak Small Cap Market. When the net asset reaches more than 6 million US dollars, and the gross profit reaches more than 1 million US dollars, the company's stock can also be directly listed on the Nasdaq main board market. Therefore, the OTCBB market is also known as the Nasdaq's reserve market (Nasdaq BABY).