Home Services Industry Client Media  
VSA PPA Investment Property Valuation
Initial Public Offering (IPO)  
Our Experience Highlight
China High Speed Transmission Equipment Group Company Limited (00658.HK)
China National Materials Company Limited (01893.HK)
Hunan Nonferrous Metals Corporation Limited (02626.HK)
SCUD Group Limited (01399.HK)
Wilton Resources Corporation Limited (WILR.SP)

Going public is a significant milestone for a company. Throughout the IPO process, having sophisticated and experienced professionals are critical to successful listing as the company will be facing challenges of extensive listing rules and regulations from the regulatory authorities. Under the dynamic market environment, our professional valuation teams are ready to assist clients in preparing their journey on initial public offerings ("IPO").

1. Equity Financing
Pre-IPO companies commonly issue convertible preferred shares to investors, such as investment banks and private equity funds, for fund raising and provide liquidity to shareholders in the pre-listing stage. If a company has invested in other companies by acquiring their equity instruments or complex financial instruments, we can provide an intensive Mark-to-Market / Mark-to-Model valuation to improve clients' investment strategies.

Our valuation specialists can deliver immediate and comprehensive solutions by using option models and decision tree analysis in accordance with local and international accounting standards.

2. Corporate Restructuring
A more simplistic company structure allows investors to have a clearer view on company's core business and creates better business value before IPO. Also, a successful restructuring plan is critical to support post-IPO plans for future development. Many privately held companies conduct organisation restructuring, such as taking suitable businesses into the core business of the listing group or proceeding business combination, before listing.

Under the prevailing accounting standards, acquirer is required to adjust its financial statements to reflect the assets acquired, liabilities assumed and any non-controlling interest in the acquiree at fair values from the acquisition date in accordance with IFRS 3 (Revised).

We keep abreast of the valuation and accounting regulatory development. With our solid track records in corporate restructuring, we are capable and experienced in assisting clients to value different types of assets, liabilities and equity interests.

 

What We Support
We offer more than just valuation. Our highly experienced members provide effective business solutions that bring direct benefit and new profit opportunities to clients. Our valuers have multiple valuation and professional designations which can fulfil clients' different needs. Our conclusion of value is based on facts and circumstances, as well as our experience and professional judgement, which will assist company in making logical and confident decision.

For more information about our valuation services, please visit www.gca-valuation.com.

 

3. Property Valuation
We play a pivotal role in preparing property valuation report in accordance with the requirements of the Rules Governing the Listing of Securities on the Stock Exchange of Hong Kong Limited ("HK Listing Rules"), particularly Chapter 5 and Practice Note 12 for Main Board, Chapter 8 for GEM Board. According to the requirements, property valuation and announcement of information related to the property interest are required in an IPO when:

  • Listing applicant's property interest forms part of its property activities: the total carrying amount of property interests not valued >10% of its total assets; or
  • Listing applicant's property interest NOT forms part of its property activities: the carrying amount of a property interest is ≥15% of its total assets or a single property interest has a carrying amount of ≥15% of total assets.

For the properties leased to connected companies, we undertake to comment on the reasonableness of the rentals in those connected parties' leases. Moreover, we also provide professional opinions on the investment property valuation and acquisition cost allocation of land value and building value.

4. IPO Share Option Plan
To motivate and reward the key management and employees, an IPO share option plan is often adopted before listing. Such option plan rewards the employee contribution that leads to a strong track record of profitability growth of the company and attracts investors through the potential of profitability growth.

The IPO share option plan takes effect and becomes exercisable upon the approval obtained from Listing Committee of the Stock Exchange of Hong Kong Limited and the commencement of dealings. The listing applicant is required to disclose full details of all outstanding options and the potential dilution effect upon exercise of the options in the prospectus. After listing, the IPO share option plan must comply with Chapter 17 of HK Listing Rules. Under HK Listing Rules, the listed issuer is required to disclose the value of all options that can be granted under the plan as if they had been granted at the latest practicable date.

We work closely with companies and their auditors in reviewing their capital structures and formulating option valuation models - Black-Scholes option pricing model, the binomial model or a comparable generally accepted methodology, in order to assess an up-to-date value of options in compliance with HK Listing Rules.

 

© 2016 Greater China Appraisal Limited. All rights reserved.