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  • Initial steps on the IPO journey

    April 2016

  • 123

    Con

    tent

    s Initial steps on the IPO journeyListing requirements

    About EY

    3

    16

    19

  • Initial steps on the IPO journey

  • Page 4 Initial steps on the IPO journey

    IPO readinessSelf-assessment

    Do you recognize these challenges in your company?

    QuestionSelf-assessment

    Often Sometimes Never

    Do you understand which capital raising option fits your organization? Do not know what organizational changes are required for IPO journey? Are there any issues that need resolving before the IPO? Do you have a lack of experience on selecting the right team? Are you struggling with the right story? Do you have doubts on the right timing and pricing?

    Each of the above may indicate that your IPO readiness requires support.

  • Page 5 Initial steps on the IPO journey

    Initial steps on the IPO journey

    In 2015, Asia Pacific was the worlds leading region in terms of number of IPOs and capital raised. Inaddition, despite some economic uncertainty in China, the outlook for 2016 remains positive withinvestor sentiment strengthened by ongoing reforms on the mainland.

    To execute an IPO successfully, you must be well-prepared. Successful IPO candidates approach theIPO as a transformational process rather than the end-game or just a financing event. It is essentialto begin to act and operate as a public company at least one year in advance of the IPO.

    Every entrepreneur aspires to take ones company public. Business owners need advice forassessment for readiness of their organization for an IPO and sources for IPO funding. As you embarkon your IPO journey, find out how EY can help guide you through the first steps in the process.

  • Page 6 Initial steps on the IPO journey

    The IPO value journeyOverview

    The IPO should be: Structured A managed transformation of people, processes and culture of an organization A process that starts long before the transactionMarket leaders recognize the IPO event as one defining milestone in a complex transformation from a private to a publiccompany.

    An IPO is a process, not an event.

  • Page 7 Initial steps on the IPO journey

    What are typical IPO work streams atcompany level? The IPO value journey

    IPO value journey

    Evaluate IPO as strategicfunding in a readinessassessment workshop

    Set up resources and aninternal IPO team

    Start to build capitalmarket infrastructure andmake structuraladjustments to achieveIPO readiness

    Prepare group systems,new functions and taxoptimization at companyand shareholder level

    Day-one readinesspost-IPO

    IPO design, concept and placement with external team3-12 months prior to IPO

    Internal preparation1224 months prior to IPO

    IPO planning IPO execution IPO realization

    Active investor relations(IR) and ongoing roadshows based on the IRcalendar

    Management of investorexpectations throughefficient forecasting anduse of issue proceeds

    Ongoing transparentexternal reporting

    Awareness of disclosuressuch as ad hoc, directorsdealings, corporategovernance and operategeneral meetings

    IPO team selection (bank,lawyers, auditors andinvestor relations)

    Set timetable, start duediligence and prepareoffering concept andprospectus

    Fine-tune business plan,fact book and presentationmaterials for analysts, thepress and investors

    Fine-tune the equity storyand valuation perceptionsbased on investorfeedback

    Offering prospectus Approval by regulators and

    securities admission to thestock exchange

    Press conferenceand launch investor roadshow

    Bookbuilding, order bookanalysis and determinationof the issue price andallocation

    Listing on stock exchangewith an IPO ceremony andmedia attention

  • Page 8 Initial steps on the IPO journey

    How to prepare and launch an IPO internallyOur approach: IPO-readiness assessment

    IPO value journey

    IPO planning IPO execution IPO realization

    Prep

    arin

    gfo

    rthe

    IPO

    jour

    ney

    1. Strategy IPO value journey IPO destination Issue concept

    2. Structures Issuing company Group structure Maintaining

    influence

    3. Taxes Company level Shareholder level Transaction level

    8. Timeline IPO windows Plan B options Multi-track process

    7. Leadership C-suite Board of directors Work with media

    PossibleIPO-readinessassessment

    modules

    6. Functions Investor relations Compliance officer Committees

    4. Financials External reporting Forecasting Prospectus

    5. Systems Internal controls Enterprise risk Compliance

    management

    Our IPO-readiness approachStart with an IPO-readiness workshop

    1. Discuss strategic funding considerationsand a possible IPO base case

    2. Hold an IPO-readiness assessmentworkshop, based on selected IPO-readiness assessment modules

    3. Analyze gaps of current infrastructure usingIPO diagnostics to get the IPO-readytarget status

    4. Agree on a road map to fill the gaps, basedon an IPO-readiness result report

  • Page 9 Initial steps on the IPO journey

    IPO readiness assessmentThe benefits

    A successfultransformation

    from privateto public status

    Save time Greater insight into your capital-raising options An IPO base case to meet your objectives and strategies

    and build road map to enhanced value

    Structured,integratedapproach

    IPO-readiness

    Reduce cost Transparency on how to get IPO-ready Map of organizational changes to execute an IPO or other

    capital transaction in an integrated approach

    Increase transaction certainty Reduced risks in unpredictable IPO markets Effective combination of team, story, timing and the pricing

    Share knowledge Understanding of your IPO requirements to address

    questions, share knowledge and train your team

  • Page 10 Initial steps on the IPO journey

    Executing a seamless IPO

    At EY, we work closely with IPO candidates, private equity funds and listed companiesthroughout the IPO journey.

    EYs global footprints demonstrates that we have experience in working in many of thekey global capital markets and with a range of intermediaries.

    EYs multidisciplinary team with market-specific experience helps you develop a clearconcise equity story built on your organizations activities, historic results and futurestrategy.

    We recognize the need for enhanced corporate governance. We can help you assessthe nature and the robustness of the various (internal and external) information sourcesrequired to draw up a prospectus.

    We assist you in implementation and improvement of relevant systems (e.g., riskmanagement, internal control and internal audit) and improve forecasting systems, tofacilitate analysts and investors have superior information.

  • Page 11 Initial steps on the IPO journey

    Executing a seamless IPO

    For a successful IPO or strategic transaction, you need to get the following right:

    Points toconsider

    Financials

    Tax matters

    Legal issues

    Internal control

    Risk management

    Corporate governance

    Information technology

    Performance reporting

    The equity story

    The capital market strategy

  • Page 12 Initial steps on the IPO journey

    Why EY

    Global number one in IPO A market leader for past 10 years (by audit share) in guiding high-growth companies through an IPO Leverage our international credentials to provide the guidance needed to address the priorities and

    mitigate risksOur global presence Outstanding network of contacts among leading capital market intermediaries A multidisciplinary team with market-specific experience, helping to facilitate cross-border IPOs and

    overseas listings Global network gives the presence in each capital market and an external network of capital market

    intermediaries, regulators and exchangesIPO leaders network Offer access to a deep pool of knowledge and experience from a network of dedicated teams

    helping you to anticipate the risks of capital-raising and to navigate through the challenges ofoperating as a public company.

    Extensive market resources and support Produce a range of research reports and other publications about rapidly changing IPO environment Provide events, workshops and briefings on IPO readiness

  • Page 13 Initial steps on the IPO journey

    IPO journey services

    1. Assessmentworkshop

    3. Evaluatinglisting options

    4. GAAPconversion

    5. Communicationwith shareholders

    6. IPO journeyservices

    2. Diagnostics andgap analysis

    7. IPO readinessresult

    1 EY Global IPO Trends, 2015 Q4, EY, 2015

    After the market correction in themiddle of 2015, which saw regulatorstemporarily shut mainland Chineseexchanges to new listings, the regionhas rebounded strongly in the fourthquarter. Despite ongoing concernsabout global and Chinese economicgrowth and the possiblerepercussions of a US interest raterise, the outlook for 2016 is positive.There is a strong pipeline of IPO-ready businesses and investorsentiment has been buoyed byreforms to Chinas IPO system whichwill see a shift to a market-orientedregistration process. We expect ahealthy appetite for new listings topersist in the coming year. 1

    Terence HoEY Greater China Strategic Growth Marketsand IPO Leader

  • Page 14 Initial steps on the IPO journey

    IPO journey services

    Key stages in IPO journey:

    Assessment workshop: The IPO readiness assessment workshop can include up to eight modules:strategy, structures, taxes, financials, internal systems, functions, leadershi