eipo frequently asked questions

8/8/2019 eIPO Frequently Asked Questions

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eIPO Frequently Asked Questions

A1: What is an IPO?

A2: What are the risks associated with IPOs?

A3: What is HSBC IPO Nominees Services? A4: What are the benefits of applying with HSBC IPO Nominees Services? A5: Do I need to register with HSBC if I apply through HSBC IPO Nominees Services? Is there

any service charge or handling fee?A6: How can I make the application payment for the application? Is there any maximum

payment limit applicable?A7: Is online IPO application available 24 hours a day?

A8: How do I know if whether my application has been successfully submitted? A9: Can I amend or cancel my application?

A10: How do I know if my application is successful or not? A11: How will I be refunded should my application be partially successful or wholly

unsuccessful?

A1: What is an IPO? IPO stands for Initial Public Offering. It is the first time a company issues securities/bonds to

investors. The newly issued securities/bonds may be listed on a stock exchange.

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A2: What are the risks associated with IPOs? Over-subscribing to an IPOIn some cases, IPOs may be oversubscribed. The company may go through a balloting/allocation

process to determine whether an investor will receive any securities and if so, in what quantity.An investor may be tempted to subscribe for a greater quantity than he intended to, believing that

he will not receive the full amount in case of over-subscription. However if the IPO is notoversubscribed, the investor will receive all the quantity applied for and will have to pay the full

cost.

Market risk There is a risk that the company's share price will drop below its initial IPO price, once the

company's securities/bonds trading (on the stock market or otherwise) commences.Securities/bond/ prices will fluctuate over time.

Company risk

It is vital to understand the company and the business you are investing in. Thoroughly study the prospectus, financial reports and even seek professional advice before you make investment

decisions. For more information on investing, visit our Investment Services.



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A3: What is HSBC IPO Nominees Services? It is a service open for HSBC Investment Services/Securities account holders to subscribe for

newly listed/issued securities/bonds/certificates of deposits in IPO in HSBC Nominee's name.Company customers can click here and follow the links to fill in the IPO application form andchoose the settlement account from any of their HSBC accounts.

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A4: What are the benefits of applying with HSBC IPO Nominees Services? HSBC would like to provide you with the greatest convenience. If you choose to apply for

securities with HSBC IPO Nominees Services (to do so, you must maintain an InvestmentServices/Securities account with HSBC), we will help you through with the whole application

process, and you may enjoy the following benefits:

y Payment Convenience - you can choose to pay the application money from any of your

company¶s HSBC account and we will directly debit your account, saving much of your

time in payment arrangement.

y Earliest Availability - your allotted securities/bonds/certificates of deposit will be directly

credited into your Investment Services/Securities account on the first listing/issue day,which will allow you to take immediate actions according to market conditions.

y R efund Convenience - any refund of the application money will be directly credited to

your payment account.

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A5: Do I need to register with HSBC if I apply through HSBC IPO Nominees Services? Isthere any service charge or handling fee?

Yes, to apply through HSBC IPO Nominees Services, you need to maintain an InvestmentServices/ Securities account with the Bank. The securities/bonds/certificates of deposit allotted

will be directly deposited into the Investment Services/Securities account with the Bank. Unlessotherwise specified, there will be a handling charge of HKD50 for every stock IPO application

through HSBC Business Internet Banking. The handling charge will be HKD100 if the stock IPOapplication is through our branches. There may also be other charges in respect of individual



IPO. Please refer to the details of respective IPO at the eIPO Centre.

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A6: How can I make the application payment for the application? Is there any maximumpayment limit applicable?With HSBC IPO Nominees Services, you can choose to debit the application money from any of

your company¶s HSBC savings or current accounts.There is no payment limit as long as you have deposited enough money for the application in

your chosen settlement account. However, you should ensure that there are sufficient funds in theaccount to cover the full subscription cost no later than 12 midnight on the day which is one

business day prior to the closing date of the public offer period, otherwise, your IPO applicationwill be cancelled accordingly.

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A7: Is online IPO application available 24 hours a day? Yes, it is a round-the-clock service and you can submit your application online for the particular

IPO anytime within the specified HSBC IPO Nominees Services offering period.

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A8: How do I know if whether my application has been successfully submitted? Application money will only be debited from your chosen settlement account on the IPO closingdate if the application has been successfully submitted.

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A9: Can I amend or cancel my application? No, once you submit the eIPO application, we will start processing it and you cannot amend or

cancel your application.

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A10: How do I know if my application is successful or not? For successful applications, newly allotted securities/bonds/certificates of deposit will becredited into your Investment Services/Securities on the Issue Date. You can then take

immediate action according to market conditions.

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A11: How will I be refunded should my application be partially successful or wholly

unsuccessful? For partially successful and wholly unsuccessful applications, the application money (or part

thereof) will be credited back directly to your chosen settlement account within the days

specified in the respective Prospectus/Offering Memorandum.

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y What are the diff erent types of issues?

y What is a Off er document?

y What is a Draf t Off er document?

y

What is a Red Herring Prospectus? y What is a Abridged Prospectus?

y What is a Letter of off er?

y What is a Abridged Letter of off er?

y What is a Placement Document?

y What does one mean by Lock-in?

y How the word Promoter has been defined?

y Who decides the price of an issue? y What are Fixed Price off ers?

y What does price discovery through book building process mean? y Who is eligible for reservation and how much (QIBs, NIIs, etc.,)?

y How is the Retail Investor defined as?

y Is it compulsory for me to have a Demat Account?

y How many days is the issue open?

y Can I change/revise my bid? y Can I know the number of shares that would be allotted to me?

y How long will it take af ter the issue for the shares to get listed?

y Guide to understand an Off er Document

What are the different types of issues? Initial Public Offering (IPO) is when an unlisted company makes either a fresh issueof securities or an offer for sale of its existing securities or both for the first time to thepublic.

F urther public offering ( F PO) is when an already listed company makes either afresh issue of securities to the public or an offer for sale to the public, through an offerdocument.

Rights Issue ( RI) is when a listed company which proposes to issue fresh securitiesto its existing shareholders as on a record date. The rights are normally offered in aparticular ratio to the number of securities held prior to the issue.

Private Placement is an issue of shares or of convertible securities by a company to a

select group of persons under Section 81 of the Companies Act, 1956 which is neither arights issue nor a public issue.

Stocks Shares IPO Mutual Funds Top of Page

What is a Offer document? Offer document means Prospectus in case of a public issue or offer for sale and Letterof Offer in case of a rights issue which is filed Registrar of companies (ROC) and Stock



Exchanges. An offer document covers all the relevant information to help an investor tomake his/her investment decision.


What is a Draft Offer document? Draft Offer document means the offer document in draft stage. The draft offerdocuments are filed with SEBI , atleast 21 days prior to the filing of the OfferDocument with ROC/ SEs. SEBI may specifies changes, if any, in the draft OfferDocument and the issuer or the Lead Merchant banker shall carry out such changes inthe draft offer document before filing the Offer Document with ROC/ SEs.


What is a Red Herring Prospectus? Red Herring Prospectus is a prospectus which does not have details of either price

or number of shares being offered or the amount of issue. This means that in case priceis not disclosed, the number of shares and the upper and lower price bands aredisclosed. On the other hand, an issuer can state the issue size and the number of shares are determined later. An RHP for and FPO can be filed with the RoC without theprice band and the issuer, in such a case will notify the floor price or a price band byway of an advertisement one day prior to the opening of the issue. In the case of book-built issues, it is a process of price discovery and the price cannot be determined untilthe bidding process is completed. Hence, such details are not shown in the Red Herringprospectus filed with ROC in terms of the provisions of the Companies Act. Only oncompletion of the bidding process, the details of the final price are included in the offer

document. The offer document filed thereafter with ROC is called a prospectus.


What is a Abridged Prospectus? Abridged Prospectus means the memorandum as prescribed in Form 2A under sub-section (3) of section 56 of the Companies Act, 1956. It contains all the salient featuresof a prospectus. It accompanies the application form of public issues.


What is a Letter of offer? Letter of offer means the offer document prepared by company for its rights issueand which is filed with the Stock Exchanges. The letter of offer contains all thedisclosures as required in term of SEBI(DIP) guidelines and enable shareholder inmaking an informed decision.




What is a Abridged Letter of offer? Abridged Letter of offer means the abridged version of the letter of offer. Listedcompany is required to send the abridged letter of offer to each and every shareholderwho is eligible for participating in the rights issue along with the application form. Acompany is also required to send detailed letter of offer upon request by any

Shareholder.


What is a Placement Document? Placement Document means document prepared by Merchant Banker for thepurpose of Qualified Institutions placement and contains all the relevant and materialdisclosures to enable QIBs to make an informed decision.


What does one mean by Lock-in? Lock-in indicates a freeze on the shares. SEBI (DIP) Guidelines have stipulated lock-inrequirements on shares of promoters mainly to ensure that the promoters or mainpersons who are controlling the company, shall continue to hold some minimumpercentage in the company after the public issue. The requirements are detailed inChapter IV of DIP guidelines. There is lock-in on the shares held before IPO and also onshares acquired through preferential allotment route. However there is no lock- in onshares/securities allotted through QIP route.


How the word Promoter has been defined? Promoter has been defined as a person or persons who are in over-all control of thecompany, who are instrumental in the formulation of a plan or programme pursuant towhich the securities are offered to the public and those named in the prospectus aspromoters(s).


Who decides the price of an issue? The guidelines have been provided that the issuer in consultation with Merchant

Banker shall decide the price. There is no price formula stipulated by SEBI . SEBI doesnot play any role in price fixation. The company and merchant banker are howeverrequired to give full disclosures of the parameters which they had considered whiledeciding the issue price.




What are F ixed Price offers? An issuer company is allowed to freely price the issue. The basis of issue price isdisclosed in the offer document where the issuer discloses in detail about the qualitativeand quantitative factors justifying the issue price.


What does price discovery through book building process mean? Book Building means a process undertaken by which a demand for the securitiesproposed to be issued by a body corporate is elicited and built up and the price for thesecurities is assessed on the basis of the bids obtained for the quantum of securitiesoffered for subscription by the issuer. This method provides an opportunity to themarket to discover price for securities .


Who is eligible for reservation and how much (QIBs, NIIs, etc.,)? In a book built issue allocation to Retail Individual Investors (RIIs), Non InstitutionalInvestors (NIIs) and Qualified Institutional Buyers (QIBs) is in the ratio of 35:15: 50respectively.


How is the Retail Investor defined as? Retail individual investor means an investor who applies or bids for securities of orfor a value of not more than Rs.1,00,000. Any bid made in excess of this will be

considered in the HNI category .


Is it compulsory for me to have a Demat Account? As per the requirement, all the public issues of size in excess of Rs.10 crore, are tomade compulsorily in the demat more. Thus, if an investor chooses to apply for an issue that is being made in a compulsory demat mode, he has to have a demat account and has the responsibility to put the correct DP ID and Client ID details inthe bid/application forms.


How many days is the issue open? Subscription list for public issues shall be kept open for at least 3 working days andnot more than 10 working days. In case of Book built issues , the minimum andmaximum period for which bidding will be open is 3 7 working days extendable by 3days in case of a revision in the price band . The public issue made by an



infrastructure company, may be kept open for a maximum period of 21 working days.Rights issues shall be kept open for at least 30 days and not more than 60 days.


C an I change/revise my bid? Yes. The investor can change or revise the quan ti ty or price in the bid using theform for changing/revising the bid that is available along with the application form.However, the entire process of changing of revising the bids shall be completed withinthe date of clos ure of the iss ue.


C an I know the number of shares that would be allotted to me? In case of f ixed pr ice issues , the investor is intimated about the CAN/Refund orderwithin 30 days of the closure of the issue. In case of book built issues, the bas is of

allotment is finalized by the Book Running lead Managers within 2 weeks from thedate of closure of the issue. The registrar then ensures that the demat cred it or refund as applicable is completed within 15 days of the closure of the issue. The listingon the stock exchanges is done within 7 days from the finalization of the issue.


How long will it take after the issue for the shares to get listed? The listing on the stock ex changes is done within 7 days from the finalization of theissue. Ideally, it would be around 3 weeks after the closure of the book built issue. In

case of fixed pri ce issue, it would be around 37 days after closure of the issue.Incase of fixed it would be around 37 days after closure of the issue.


G uide to understand an Offer Document This section basically tries to tell the reader about the structure of presentation of thecontent in the Offer Document . This is with a view to help the reader navigatethrough the content of an offer document.

a. C over Page

The C over Page of the offer document covers full contact details of the issuercompany, lead managers and registrars, the nature, number, price and amount of instruments offered and issue size, and the particulars regarding listing. Other detailssuch as C redit Rating, IPO G rading, if opted for, risks in relation to the first issue,etc are disclosed if applicable.

b. Risk F actors Here, the issuers management gives its view on the Internal and external risks faced



by the company. Here, the company also makes a note on the forward lookingstatements. This information is disclosed in the initial pages of the document and it isalso clearly disclosed in the abr idged prospectus. It is generally advised that theinvestors should go through all the risk factors of the company before making aninvestment decision.

c. I ntroduction The introduction covers a summary of the industry and business of the issuer company,the offering details in brief, summary of consolidated financial, operating and otherdata. General I nformation about the company, the merchant bankers and theirresponsibilities, the details of brokers/syndicate members to the Issue, credit rating (incase of debt issue), debenture trustees (in case of debt issue), monitoring agency, bookbuilding process in brief and details of underwriting Agreements are given here.

Important details of capital structure, objects of the offering, funds requirement,funding plan, schedule of implementation, funds deployed, sources of financing of fundsalready deployed, sources of financing for the balance fund requirement, interim use of funds, basic terms of issue, basis for issue price, tax benefits are covered.

d. About us This presents a review of on the details of the business of the company, businessstrategy, competitive strengths, insurance, industry-regulation (if applicable), historyand corporate structure, main objects, subsidiary details, management and board of directors, compensation, corporate governance, related party transactions, exchangerates, currency of presentation dividend policy and management's discussion andanalysis of financial condition and results of operations are given.

e. F inancial Statements F inancial statement, changes in accounting policies in the last three years anddifferences between the accounting policies and the Indian Accounting Policies (if theCompany has presented its Financial Statements also as per Either US GAAP/I AS arepresented.

f. Legal and other information Outstanding litigations and material developments, litigations involving the companyand its subsidiaries, promoters and group companies are disclosed. Alsomaterial developments since the last balance sheet date, government approvals/licensing

arrangements, investment approvals (FIPB /RBI etc.), all government and otherapprovals, technical approvals, indebtedness, etc. are disclosed.

g. Other regulatory and statutory disclosures Under this head, the following information is covered: authority for the Issue,prohibition by SEBI , eligibility of the company to enter the capital market, disclaimerclause, disclaimer in respect of jurisdiction, distribution of information to investors,



disclaimer clause of the stock exchanges, listing, impersonation, minimum subscription,letters of allotment or refund orders, consents, expert opinion, changes in theauditors in the last 3 years, expenses of the issue, fees payable to the lead managers,fees payable to the issue management team, fees payable to the registrars,underwriting commission, brokerage and selling commission, previous rights and

public issues, previous issues for cash, issues otherwise than for cash, outstandingdebentures or bonds, outstanding preference shares, commission and brokerage on,previous issues, capitalization of reserves or profits, option to subscribe in the issue,purchase of property, revaluation of assets, classes of shares, stock market data forequity, shares of the company, promise vis-à-vis performance in the past issues andmechanism for redressal of investor grievances.

h. O ffering information Under this head, the following information is covered: Terms of the I ssue, ranking of equity shares, mode of payment of dividend, face value and issue price, rights of theequity shareholder, market lot, nomination facility to investor, issue procedure, book building procedure if applicable, bidform, who can bid, maximum and minimum bidsize, bidding process, bidding bids at different price levels, escrow mechanism, terms of payment and payment into the escrow collection account, electronic registration of bids,build up of the book and revision of bids, price discovery and allocation, signing of underwriting agreement and filing of prospectus with SEBI/ROC, announcement of statutory advertisement, issuance of confirmation of allocation note("can") andallotment in the issue, designated date, general instructions, instructions for completingthe bid form, payment instructions, submission of bid form, other instructions, disposalof application and application moneys, , interest on refund of excess bid amount, basisof allotment or allocation, method of proportionate allotment, dispatch of refund orders,

communications, undertaking by the company, utilization of issue proceeds, restrictionson foreign ownership of I ndian securities, etc.,

i. O ther I nformation This covers description of equity shares and terms of the Articles of Association,material contracts and documents for inspection, declaration, definitions andabbreviations, etc.,

a. G reen-shoe O ption A G reen Shoe option means an option of allocating shares in excess of the sharesincluded in the public issue and operating a post-listing price stabilizing mechanism

for a period not exceeding 30 days in accordance with the provisions of Chapter VIII Aof DIP Guidelines, which is granted to a company to be exercised through a Stabilizing Agent. This is an arrangement wherein the issue would be over allotted to the extent of a maximum of 15% of the issue size. From an investors perspective, an issue withgreen shoe option provides more probability of getting shares and also that post listingprice may show relatively more stability as compared to market.



b. e-IPO A company proposing to issue capital to public through the on-line system of thestock exchange for offer of securities can do so if it complies with the requirementsunder Chapter 11A of DIP Guidelines. The appointment of various intermediaries by theissuer includes a prerequisite that such members/registrars have the required facilities

to accommodate such an online issue process.

c. Safety Net Any safety net scheme or buy-back arrangements of the shares proposed in anypublic issue shall be finalized by an issuer company with the lead merchant banker inadvance and disclosed in the prospectus. Such buy back or safety net arrangementsshall be made available only to all original resident individual allottees limited up to amaximum of 1000 shares per allottee and the offer is kept open for a period of 6months from the last date of dispatch of securities. The details regarding Safety Net arecovered under Clause 8.18 of DIP Guidelines.

h. C ut Off P rice In Book building issue, the issuer is required to indicate either the price band or a f loor price in the red herring prospectus. The actual discovered issue price can be anyprice in the price band or any price above the floor price. This issue price is called C ut off price. This is decided by the issuer and LM after considering the book andinvestors appetite for the stock. SEBI (DIP) guidelines permit only retail individual investors to have an option of applying at cut off price.

j. Basis of Allocation /Basis of Allotment After the closure of the issue, the bids received are aggregated under different

categories i.e., f irm allotment, Qualified Institutional Buyers (QIBs), Non-InstitutionalBuyers (NIBs), Retail, etc. The oversubscription ratios are then calculated for each of the categories as against the shares reserved for each of the categories in the offerdocument. Within each of these categories, the bids are then segregated into different buckets based on the number of shares applied for. The oversubscription ratio isthen applied to the number of shares applied for and the number of shares to beallotted for applicants in each of the buckets is determined. Then, the number of successf ul allottees is determined. This process is followed in case of proportionateallotment. In case of allotment for QIBs, it is subject to the discretion of the post issuelead manager.

k. Q ualif ied I nstitutional Buyer (QI Bs ) Q ualif ied I nstitutional Buyers are those institutional investors who are generallyperceived to possess expertise and the financial muscle to evaluate and invest in thecapital markets. In terms of clause 2.2.2B (v) of DIP Guidelines, a QualifiedInstitutional Buyer shall mean:



a. public financial institution as defined in section 4A of the Companies Act, 1956b. scheduled commercial banksc. mutual funds d. foreign institutional investor registered with SEBI e. multilateral and bilateral development financial institutions

f. venture capital funds registered with SEBI g. foreign Venture capital investors registered with SEBI h. state Industrial Development Corporationi. Insurance Companies registered with the Insurance Regulatory and Development

Authority (IRDA) j. Provident Funds with minimum corpus of Rs. 25 croresk. Pension Funds with minimum corpus of Rs. 25 crores)

Chapter 5 Mar ket Oper ations and Tr ading

5.4 Initial Public Off er ing (IPO)

5.4.1 How can investor s know what companies are planning to commence public off er ingsoon? Listing schedules and listing destinations are business decisions of companies. Potentiallisting candidates normally seek to increase the market awareness of their listing plansafter they have obtained listing approval from the Stock Exchange. The Stock Exchangedoes not make announcement on behalf of companies regarding their listing plans and

schedules.On 1 January 2008, HKEx launched a pilot scheme requiring new listing applicants, to posta Web Proof Information Pack (WPIP) on the HKEx website or the Growth EnterpriseMarket (GEM) website (whichever is applicable) before their IPO. The WPIP should be inthe nature of a near-final draft listing document. The pilot scheme is intended to help levelthe playing field for institutional and retail investors in the receipt of information about anapplicant. HKEx is reviewing the pilot scheme and the result will be announced.Investors may go to Issuer-related Information section of the HKExnews website or theWeb Proof Information Packs section of the GEM website for information.It should be noted that the WPIP is for reference only. It constitutes neither a prospectusdocument nor a final draft of a prospectus. Investors should not make investmentdecisions based on its information. Instead, they should read the prospectus subsequently

issued by the candidate, which together with listing documents and announcements areposted on the HKExnews website and the issuer¶s own website.

5.4.2 How can investor s obtain pr ospectuses and subscr iption forms for IPO? Distribution points of prospectuses and subscription forms for IPO are set out in theprospectuses of issuers. Investors can search for the prospectuses and announcementsfrom the Listed Company Information section on the HKExnews website. They may alsocheck with the sponsor or underwriter or receiving banks for details about the distribution



of prospectuses and subscription forms as well as application procedures.Investors with an Investor Account at CCASS can apply for new issues electronicallythrough HKSCC via the CCASS Phone Operations Hotline or CCASS Internet System or by submitting 'EIPO Application Instruction Input Request Form' to the Customer ServiceCentre before the application end time and date.Brokers and custodians can also apply for new shares for clients via the EIPO service

provided by CCASS. That will save investors the trouble of having to complete an IPOapplication form.

5.4.3 Which forms should investor s use to subscr ibe for new shares? White or Yellow Forms? What is the diff erence? Investors can use either the White or Yellow Form to subscribe for new shares but notboth forms. Multiple or suspected multiple applications are liable to be rejected.Investors who want physical shares to be issued in their names should use the WhiteForm while those who want shares to be deposited directly into CCASS and registered inthe name of HKSCC Nominees Limited should use the Yellow Form.One of the main differences between White and Yellow Forms is that White Formsubscribers usually have to wait for the mailing of physical share certificates and can

normally trade the stock only after receiving the share certificates and having themdeposited with brokers. Investors may not be able to catch the first trading day as theymay not have received the physical shares certificates before trading of the new sharescommences. However, as the allotted shares of Yellow Form subscribers have alreadybeen deposited into CCASS, they can trade the stocks through their brokers on the firsttrading day of the new issues.

5.4.4 How can investor s apply for new shares electr onically? Investors can subscribe for new shares electronically through one of the followingchannels:

1. The designated website of the White Form eIPO service provider appointed by thenewly listed company (a newly listed company may appoint a designated serviceprovider to provide White Form eIPO services);

2. If the listing company makes use of the Electronic Initial Public Offering (EIPO)service under CCASS, Investor Participants in CCASS can apply for new shares byinputting EIPO application instructions through the CCASS Phone OperationsHotline (2979 7888) or the CCASS Internet System (https://ip.ccass.com). Pleaserefer to the ³Investment Service Centre´ of the HKEx website for the details aboutthe Investor Account services.

3. If the listing company makes use of the EIPO service under CCASS, investors whohave not opened Investor Accounts in CCASS can contact their brokers or other

intermediaries to apply for new shares electronically.

If an investor applies via the first channel, refund due to partially or fully unsuccessfulapplication or due to price adjustment are effected through bank transfers or by cheque.Please contact the relevant White Form eIPO service provider for information.

If an Investor Participant applies via the second channel, refund will be credited into its



accounts.

If an investor applies via the third channel, refund will be credited into the account of thebroker or other intermediary who input the application for him/her.

5.4.5 What are multiple applications? In Hong Kong public offerings, an application is liable to be rejected if the investor hasmade more than one application (even for joint name application).

5.4.6 How can investor s know IPO allotment results? Investors can search for IPO allotment results from Listed Company Information under theHKExnews website. They can also ask the relevant share registrar about the results.Information on how to contact share registrars can be accessed on ³Company/SecuritiesProfile´ under ³Investment Service Centre´ of the HKEx website. Newly listed companiesmay also announce allotment results on their own websites. Arrangements for theannouncement of allotment results are set out in prospectuses.

5.4.7 What is the allotment basis? The allotment basis depends on the number of valid applications for subscription for theIPO shares. Normally, the share registrar appointed by the issuing company first screensout multiple, incomplete or wrongly filled applications. Then, shares are allotted accordingto the basis of allocation as determined by the sponsor and the newly listed company. Inthe event of over-subscription, the newly listed company must increase the number of shares in the public subscription tranche by transferring shares from the placing tranche (if there is a placing tranche) by virtue of the claw back mechanism. Investors should refer tothe relevant section in the prospectus.

5.4.8 What should investor s do if the subscr ibed for a new share issue and received neither share cer tificates nor a refund cheque after tr ading in the company's shareshad star ted? In applying for shares, investors should note how and when the results of applications willbe announced. These are stated in the prospectus and application forms. If investors fail toreceive any notice after the stated time, they should check with the sponsor or the shareregistrar of the new issue.

http://www.hkex.com.hk/eng/global/f aq/initial%20public%20off ering.htm

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Frequently Asked Questions

y What is eIPO service?

y What are the benefits of eIPO?

y Pre-registration is required for eIPO services?

y How to make application payment?

y Is eIPO service available 24 hours a day?

y What are the steps of using eIPO services?



y Can I complete the application form of eIPO Services of the Bank in Chinese or English?

y Can I submit more than one application for the same IPO?

y Which applications form IPO Services is like?

y How do I know if my application instruction has been submitted successf ully?

y Can I amend or cancel my eIPO application?

y How do I know whether the securities are allotted to me?

y How will I be ref unded?

What is eIPO service?

eIPO stands for Initial Public Offering that is the first time a company issues shares or bonds to publicinvestor. The newly issued securities or bonds may be listed on stock exchange. eIPO service means aservice offered by the Bank of subscription for new issued shares through internet.

What are the benefits of eIPO?

Time Saving

No more queuing up in long lines to obtain or submit application forms or write checks for IPOsubscriptions.

Reliable

Deposit your allotted shares directly into your Securities Trading Account with us to avoid any delay or loss of certificates in the mail.

Fast

Instant trading of the allotted shares on the first trading day.

Pre-registr ation is required for eIPO services?

Customers who use our eIPO services should maintain securities account and online banking with our Bank.

How to make application payment?

Payment of application money will be made by debiting to your settlement account through Auto-PayMethod on or after payment deadline. However, please ensure you have sufficient funds in your settlement account on or before the payment deadline. Otherwise, your application will not be processed..

Is eIPO service available 24 hour s a day?



Yes. You may submit application online anytime between the eIPO Application Starting Date and Application Deadline that can be found at the eIPO Center of our Bank.

What are the steps of using eIPO services?

Step 1

Read carefully any information about the new issued shares at the eIPO Center of our Bank.

Step 2

Before making an application, read thoroughly and agree with all the "General Terms & Conditions inRelation to eIPO Application Services".

Step 3

Reading carefully the Prospectus relating to the IPO company and all other relevant Terms andConditions.

Step 4

If you agree with all the terms and conditions, you can complete the online application form.

Once you confirmed the application, you cannot amend or cancel your application. Please check theinformation carefully and ensure that the information provided by you is correct.

After the Bank has received an online instruction, a confirmation of receipt of instruction with thereference number assigned for such instruction will be posted. The Applicant is advised to print and keep

a hard copy of such confirmation for record.

Payment of application money will be made by debiting to your settlement account through Auto-PayMethod.

Step 5

Your allotted securities will be deposited into your designated securities account on the first listing (issue)day, which allow you to take actions instantly according to market conditions. Refund of ApplicationMoney will be credited back to your settlement account within the days specified in the prospectus.

About Application

Can I complete the application form of eIPO Services of the Bank in Chinese or English?

Whether the Applicant uses the Chinese or English version of the online application form, you mustcomplete the form in English only.



Can I submit more than one application for the same IPO?

No. The applicant should submit only one application; The Bank shall not process any instruction byreason of multiple applications.

Which applications form IPO Services is like?

IPO Services form is like yellow application form. The Bank in the name of your nominee submitsapplication for you. All the payment of application money will be debited to the settlement account through

Auto-Pay Method. Your allotted securities will be deposited into your designated securities account. Andrefund of Application Money (If any) will be credited back to your settlement account.

How do I know if my application instr uction has been submitted successfully?

After the Bank has received an online instruction, a confirmation of receipt of instruction with thereference number assigned for such instruction will be posted on relevant webpage. The Applicant isadvised to print and keep a hard copy of such confirmation for record. Moreover, please ensure you havesufficient fund in your settlement account on or before the payment deadline. Otherwise, your applicationwill not be processed.

Can I amend or cancel my eIPO application?

No. Once you confirmed the application, you cannot amend or cancel your application.

How do I know whether the secur ities are allotted to me?

Your allotted securities will be deposited into your designated securities account on the first listing (issue)day. Allocation, and arrangements for announcing the results of the allocation, of securities shall be thesole responsibility of the Offeror and should be specified in the prospectus or the relevant offeringdocuments issued in respect of the relevant Public Offer.

How will I be refunded?

If you receive allotted shares with partially successful or unsuccessful, the application of money will becredited back to your settlement account within the days specified in the respective prospectus.

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Guidelines for Online IPO Application

1. Who is eligible to make an e-IPO application thr ough the Taifook Secur ities Company Limited ("TFSCL")'sWebsite?

Eligible applicant must:

y Hold an Online Trading Account with TFSCL ("Trading Account")y Possess HKID Card/HK BR Certificate and HK Address

2. What is the diff erence between using White and Yellow Application Form?

Applicants for IPO shares should use the Yellow application form if you want the Public Offer Shares to be allocatedto you and issued in the name of HKSCC Nominees Limited and deposited directly into CCASS for credit to your investor participant stock account or your Taifook Securities account of your designated CCASS participant. You maycontact your own broker or call our Customer Service department at (852)3583 3388 for details.

Applicants should use the white form if you want to receive physical certificate issued in your name.

3. Will I receive any confirmation after making an IPO application online?

TFSCL will not send issue any confirmation notification after we received your application. However you can checkyour application status on Web Securities system.

4. How can I pay the e-IPO applicationmoney before making an online subscr iption?

You should deposit full amount of application money (including all relevant brokerage and levies as referred in therelevant Prospectus plus handling fee of $100) into your Trading Account before submission of your IPO application.You may deposit the application money to TFSCL's account in Hong Kong Bank, Hang Seng Bank, StandardChartered Bank or Bank of China. You can also use e-banking service to transfer the application money if you havee-banking account in HSBC, BOC or Bank of East Asia. (Please click here to refer to the e-payment section)

5. When will we hold up client'smoney after making subscr iptions?

We will hold up client's money once the client places an application.

6. How do I know whether my e-IPO application is successful or not?

Allotment results will be published on the newspapers (only for white form applicants) on the date as announced bythe issuer in the prospectus.

Yellow form applicants should check their account status for share allotments results.

Taifook¶s client can enquiry via our IPO Allotment Result Hotline at (852) 3588-7688 at fast & convenient way byinputting your personal information & stock code.

7. How can I get a refund for a wholly or par tially unsuccessful e-IPO application or any sur plus applicationmoney?

The share registrar of the issuer will refund any application money due to you by a cheque made out to you, or if youare a joint applicant, to the first-named applicant as supplied by you in the IPO Applicant input screen (for white formapplicants only). The refund cheque will be sent by ordinary post to the address as supplied by you in the IPO

Application as announced by the issuer.



For yellow form applicants, the share registrar of the issuer will refund any application money due to you by creditinginto your Securities Account at Taifook.

8. Will I receive physical share cer tificates if my application is successful? How do I receive the allotted shares if my application is successful or par tially successful?

If your application for shares is successful in whole or in part, the share registrar of the issuer will issue sharecertificate(s) in your name and send it/them by ordinary post to the address as supplied by you in the IPO Applicationinput screen on the date of dispatch as announced by the issuer. (for white form applicants only).

For yellow form applicants, the share registrar of the issuer will issue share certificate(s) into your Securities Accountat Taifook.

9. Is the Inter net IPO service available 24 hour s a day, 7 days a week?

Yes, you can access the Internet IPO services 24 hours a day, 7 days a week.

The above information is not intended to be a complete description of the procedures and terms and conditions for IPO application.

If you intend to make an IPO application online, you should ensure that you have read the terms and conditions andapplication procedures set out in our website in relation to the IPO Application and the relevant prospectus prior tomaking the IPO Application.

Should you have any further questions regarding IPO application, please feel free to contact our Customer ServiceHotline on 3583 3388 or visit our website at www.taifook.com.

eipo frequently asked questions

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