In the golden autumn of September, a splendid event for changemakers came to a successful conclusion.
For startups,IPO listingIt is not the endpoint of corporate development, but indeed an important milestone in the process of growth and expansion. However, since the beginning of this year, the secondary market has continued to fluctuate under the combined effects of the macroeconomic situation and market environment, leaving many pre-listed companies confused.
Against this backdrop,36The sixth session of Krypton's Entrepreneurs' Private Board Meeting, themed 'Post-Internationalization: Corporate Listing Strategies', was heldAAnswers to important questions such as market systems, listing strategies, and legal matters of stocks and Hong Kong stocks are provided.
Frost & SullivanFrost & SullivanMr. Lu Jing, Partner and Managing Director of Frost & Sullivan's Greater China Region, was invited to attend the meeting. Co-organized with Wang Yinan, Head of the Technology Committee at Deheng Law Firm, and AnengCFOLindy Stern, Li Yipeng, Chief Financial Officer of Ronglian Cloud, Leung Yu, General Manager of the Pharmaceutical Industry at HSBC China Commercial Banking,CEO & Senior Partner, CGL-MCGWang Zhong,Associate Director of CGLGuests including Fan Yanli, Liu Sijia, a partner at Jindu Law Firm, Zhang Kewei, another partner at Jindu Law Firm, and Liu Yuanbo, a partner at PricewaterhouseCoopers Zhongtian Accounting Firm, shared and discussed together.
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ADifferentiated listing strategies for A-shares and Hong Kong stocks
As several Chinese concept stocks are being delisted from the USSECIncluded in the pre-list delisting list, and supported by the optimization of relevant systemsAThe attention and attractiveness of the two major capital markets, Hong Kong stocks and A-share markets, continue to rise.
And in terms of market systems, trading rules, and investor structure,AThere are significant differences between stocks and Hong Kong stocks, so pre-listing companies should be particularly cautious when choosing a listing location. An appropriate listing path and strategy are crucial.
At this private board meeting, in response to the aforementioned issues, the participating guests conducted an in-depth analysis and discussion, continuously producing high-quality insights.
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Regarding the main considerations for enterprises choosing a listing location, Lu Jing, Partner and Managing Director of Frost & Sullivan Greater China, pointed out that enterprises should combine their own circumstances and future development strategies, focusing on five dimensions: financial indicators and valuation, listing costs, secondary market financing capabilities and liquidity, market investment story acceptance, and cross-border listings within China.
At the same time, Lu Jing stated that financial performance, legal compliance, and investor stories are the three main drivers for listing. Finance and compliance are fundamental requirements, while market investment stories are the highlight. Investment stories provide a precise positioning of a company and play a core role in enhancing the company's valuation. The business and industry sections of the prospectus, as well as roadshow presentation materials, are the main materials for presenting market investment stories.
Partner of Jindu Law Firm, Liu Sijia, introduced the registration-based system pilot on the Sci-tech Innovation BoardAThe positive changes and challenges faced by the equity capital market, fromAFrom the perspectives of shareholder introduction before share listing, margin trading agreements, and ongoing compliance supervision, relevant legal risks were analyzed in detail, along with suggestions for countermeasures. Zhang Kewei then discussed the Hong Kong listing schedule, the regulatory authorities' focus on new economy enterprises, and the brewing18CZhang and other content were exchanged with the participating guests. Liu Sijia stated,AUnder the share registration system, the issuance and listing review cycle has been significantly shortened. With information disclosure at its core, the requirements for the truthfulness, accuracy, and completeness of information disclosure content are becoming increasingly stringent. There should be no mentality of squeezing out time on related issues or solving problems during the review process. Thorough discussion and resolution before application can help to advance the schedule as quickly as possible.
Partner Liu Yuanbo from PwC Zhongtian Accounting Firm shared from the perspective of an auditorAA shares, Hong Kong stocksIPO listingReview case analysis and response-related content. Liu Yuanbo proposed that, given the current trend of increasingly convergence between Chinese accounting standards and international accounting standards, Hong Kong stocks andAshareIPO listingThe basic financial issues under review are already largely similar. The key non-financial issues that need to be resolved before a company goes public include the principle of independent operation, competition in the same industry, restructuring of legal structures, related-party transactions, and finance-related concerns such as revenue recognition, the continuity of performance for listed businesses, inventory, costs and expenses, taxation, research and development expenses, employee equity incentive plans, etc. At the same time,AFor common issues such as revenue penetration verification in stocks, companies should also start preparing in advance according to the listing schedule and collect the supporting documents required for verification.
In addition, Liu Yuanbo further stated that regardless of which capital market the company chooses, a solid financial foundation is essential for successIPO listingThe source of all books. The company should establish a complete financial system and internal control framework as soon as possible, and apply accounting policies in compliance with regulations and accurately according to different business models. Responding to all changes with constancy, forIPO listingWhile laying a solid foundation, it can also reduce operational risks and compliance costs, enabling the company to move forward steadily in the business world.
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From startup toIPO listingHow should the talent strategy be transformed?
People are the most core element of an enterprise.
So, 'Is the core team built for going public or for the company's core business?'Associate Director of CGLFan Yanli initiated this soul-searching question at the scene.
thereforeCEO & Senior Partner, CGL-MCGWang Zhong and Fan Yanli shared several key points of talent strategy at different stages of a company. In the startup phase, in terms of talent layout: stabilize core members with an entrepreneurial spirit, assign one key person to handle multiple responsibilities, use options to bind core talents for cash flow management, and conduct differentiated recruitment. Before going public, focus on business as the core, ensure financial reports are in place, and be willing to spend money on hiring professional managers. After going public, when the company is under the spotlight, scientific and brand-matching corporate operations become very important. During the talent recruitment process, build a strong employer brand, and some specialized functions must be split up and started to be deployed. At each stage, identifying and selecting talents is of utmost importance.
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How to clarify data security and compliance issues?
Data security and compliance have become a focus of current regulatory authorities in reviewing corporate listings.
In response, Lawyer Wang Yinan, the head of the Technology Committee at Deheng Law Firm, explained in detail the data security and compliance issues that pre-listed companies need to clarify. Lawyer Wang pointed out that rectifying data compliance requires time and suggested that companies start as early as possible, as 'last-minute efforts' may be more passive. After listing, companies will face data compliance risks across different dimensions, and it is recommended that they give sufficient attention to this.
Specifically, the compliance issues that securities regulatory authorities are concerned about mainly include compliance or penalties during the reporting period, the legality of data sources, whether important systems have undergone cybersecurity classification protection certification or filing, whether there is any data export, special regulatory requirements for the industry, compliance with relevant laws and regulations on cybersecurity and data protection in foreign jurisdictions, internal control measures for cybersecurity and data protection and external risks, cooperation with third parties and related risks, etc.
In addition, at this private board meeting, Liang Yu, General Manager of the Healthcare Industry at HSBC China Commercial Banking, also discussed with guests that under market fluctuations, SMEs need to pay attention to two changes:1.At the current stage, equity financing is valued at a low cost but with high returns. Therefore, bond financing is more attractive to rapidly growing enterprises;2.RMB exchange rate breaks7Subsequently, exchange rate risk management has once again become a key determinant for success for outbound and international financing enterprises. 
