For many companies, going to Hong Kong for an IPO is an important milestone, but the process is not simple. In recent years, Hong Kong’s listing system has undergone a series of reforms, attracting a large number of mainland enterprises, including well-known companies such as Xiaomi, Haidilao, WuXi AppTec, and Baekje Shenzhou. With the reform of the Hong Kong listing system, more mainland enterprises are actively preparing to go public in Hong Kong, but behind the success, many companies have also failed to achieve their wishes. Why is this? What core tasks do companies need to do to go public for an IPO in Hong Kong? Today, we invite IPO experts to Hong Kong to analyze the core points for you.
Enterprises that want to go public in Hong Kong must first understand the concerns behind going public in Hong Kong. Recently, at the “Smart IPO” forum jointly organized by SAP and the Hong Kong Stock Exchange, Liu Yunzhi, Assistant Vice President of the Hong Kong Stock Exchange, elaborated in depth on the key factors for companies to go public in Hong Kong. Among them, it is particularly emphasized that there is a deep understanding of the policies and advantages of the Hong Kong capital market, strengthening financial compliance and risk management, drawing on successful cases, and addressing various issues related to enterprises’ IPOs in Hong Kong.
The process of a company going public in Hong Kong usually involves the following core steps: selecting and hiring a sponsor, forming an IPO working group, conducting financial audits and due diligence, preparing a prospectus, preparing a roadshow, obtaining necessary approvals, and setting an issuance schedule. It is particularly important for companies listed in Hong Kong to focus on key aspects such as financial reporting and auditing, legal compliance, financial condition, business model and strategy, investor relations, market risk response, and team building.
During the process of going public in Hong Kong, financial audit and compliance work are particularly crucial. The Hong Kong Stock Exchange usually requires companies applying for listing to provide financial reports from the past three years, which are reviewed by internationally renowned auditing agencies. Enterprises must ensure that all their business activities comply with relevant laws, including contracts, intellectual property, labor laws, etc., and meet various legal requirements for listing in Hong Kong. Listed companies in Hong Kong also need to demonstrate their ability to sustain profitability, especially their performance in the past three years. At the same time, financial condition, debt level, and cash flow will also be key evaluation factors.
At present, with the improvement of auditing and regulatory standards, companies going public in Hong Kong need to strengthen corporate governance, financial management, and risk compliance. The upgrading of information systems has gradually become the main purpose of IPO fundraising.
For example, companies including Xiaomi currently use SAP S/4HANA CIOud in their SAP system to promote efficient internal audit and control, enhance the standardization of enterprise management, establish an integrated and comprehensive risk and compliance management platform, unify risk observation, automate monitoring and early warning, and achieve embedded control through the establishment of a digital platform, thereby improving the transparency and control power of the entire enterprise and easily responding to IPO reviews.
For example, in supporting overseas financial and tax compliance for enterprises, SAP achieves financial and tax compliance for our enterprises by highly integrating Chinese and global tax management.
At the same time, in response to changes in financial, tax, and accounting standards in different regions, a strategy of pre release and proactive updates is adopted to provide real-time protection for enterprises.
In fact, SAP ERP systems such as SAP S/4HANA CIoud also help our enterprise improve management transparency from multiple dimensions such as finance, compliance, human resources, and data analysis, thereby meeting the IPO review mechanism.
In order to gain a more comprehensive understanding of the entire process of a company’s IPO in Hong Kong and how to address various challenges with SAP S/4HANA CIOud, we have provided you with more in-depth information and solutions at the end of the article. Click on the link to access them. I hope that every enterprise eager to go public in Hong Kong can move forward more steadily on this path and achieve their dreams.
This article "Digging deep into the core work is the key to success for companies going to Hong Kong for IPO listing" by AcloudEAR. We focus on business applications such as cloud ERP.
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