Asia Rising with

Hong Kong Depositary Receipts

Wednesday, 30 May 2012

J.P. Morgan awarded

Best DR Bank – Japan, Taiwan, Best DR Bank Mandate
Agenda
Agenda
Topics and Presenters
Hong Kong: An ideal listing and capital raising market – Trends, facts and figures
Eric Landheer
Senior Vice President and Head of Issuer Marketing, Hong Kong Exchanges and Clearing Limited
Identifying the right segment for Hong Kong listing
Kelvin Ho
Executive Director, Investment Banking, J.P. Morgan
Listing of overseas companies in Hong Kong – Latest developments
Bonnie Chan
Partner, Davis Polk
Things you need to know – Hong Kong listing from an auditor’s perspective
Edward Au
Partner, Deloitte Touche Tohmatsu
Best practices in media: Listing of international companies on The Hong Kong Stock Exchange
Richard Tsang
Chairman and Managing Director, Strategic Public Relations Group
HDR – The proven way to list in Hong Kong
Joseph Dooley
Regional Head of Depositary Receipts Americas, J.P. Morgan

J.P. Morgan awarded

Best DR Bank – Japan, Taiwan, Best DR Bank Mandate
Presenters
Presenters’ Profile

Eric Landheer
Senior Vice President and Kelvin Ho
Head of Issuer Marketing, Executive Director, Investment Banking,
Hong Kong Exchanges and Clearing Limited J.P. Morgan

Eric manages the HKEx’s issuer marketing efforts, working Kelvin manages client coverage and transaction execution in
closely with prospects and constituents. He is often quoted the Greater China region. In 2010, Kelvin led and successfully
in the press and speaks at numerous conferences and events completed the first ever Hong Kong Depositary Receipts
throughout the globe. transaction for Vale, the world’s largest iron ore producer.

Prior to joining HKEx, he drove NASDAQ’s expansion in Asia. Prior to joining J.P. Morgan, Kelvin worked at BNP Paribas’s
Under his leadership, NASDAQ more than doubled its number business valuation division based in Paris later moving to Hong
of listed Chinese enterprises and China became NASDAQ’s Kong to join the Greater China corporate finance team.
single largest source of non-US listings.
Kelvin has earned the CFA designation and holds an MBA from
Eric has 17 years of experience in the financial markets, is an London Business School with distinction in corporate finance
honors graduate of the University of California at Berkeley and a scholarship from the British government. His research on
and speaks Mandarin Chinese. International comparison of corporate gearing has been
published in the biannual publication of the Bank of England.

J.P. Morgan awarded

Best DR Bank – Japan, Taiwan, Best DR Bank Mandate
Presenters
Presenters’ Profile

Bonnie Chan Edward Au

Partner, Partner,
Davis Polk Deloitte Touche Tohmatsu

Bonnie is a partner and resident in Hong Kong and her Edward has been an audit partner of Deloitte China since 2003
practice includes advising issuers and underwriters on and is the co-leader of the National Public Offering Group. He is
capital markets transactions, securities, corporate and actively involved in various debt and equity offering activities in
governance matters. Hong Kong, US and Singapore.

Prior to joining Davis Polk, Bonnie served as senior vice Edward focuses on IFRS / US GAAP and HEKx / SEC reporting
president of the HKEx where she led the IPO transactions matters and is the concurring review partner for a number of
department of the listing division. Bonnie was key in HKEx / SEC-registered clients like China.com and Semiconductor
pioneering the approval process for numerous applications Manufacturing International Corporation.
of foreign companies listing in Hong Kong.
He is a member of the American Institute of Certified Public
Bonnie is admitted to practice in the US and Hong Kong and Accountants and a Certified Public Accountant in the State of
is a graduate from the University of Hong Kong as well as an Washington. He is also a fellow member of Association of
LL.M. holder from Harvard Law School. Chartered Certified Accountants and Hong Kong Institute of
Certified Public Accountants.

J.P. Morgan awarded

Best DR Bank – Japan, Taiwan, Best DR Bank Mandate
Presenters
Presenters’ Profile

Richard Tsang Joseph Dooley

Chairman and Managing Director, Regional Head of Depositary Receipts
Strategic Public Relations Group Americas, J.P. Morgan

Richard is an investor relations / PR veteran with 24 years Joseph Dooley is the region head of J.P. Morgan’s DR Americas
of industry experience in Asia. Since 1995, he founded Group. Based in New York City, Joe has participated in the
SPRG in Hong Kong, and has set up 9 offices in Beijing, wide- ranging growth of the DR security since he joined the
Shanghai, Guangzhou, Taiwan, Singapore and Malaysia. group in 1987.
SPRG is one of the largest public relations networks in Asia
and the largest public relations consultancy in Hong Kong. In previous positions within the DR Group, Joe led the Product
Management team, the Transaction Management Services
Richard has received numerous awards for his professional Group and acted as a product specialist for the group’s
and personal achievements and is the vice president of European DR issuers.
Asia-Pacific’s public relations organisation international
(PROI) since 2009.

He is a graduate from the Chinese University of Hong Kong.

An avid supporter of education, Richard is also a part-time
lecturer at the school of Journalism and Communications
at the University.

J.P. Morgan awarded

Best DR Bank – Japan, Taiwan, Best DR Bank Mandate
Listing on the Hong Kong Stock Exchange

May 2012

Eric Landheer
Senior Vice President and Head of Issuer Marketing Department
Hong Kong Exchanges and Clearing Limited
HKEx is the Listing Venue of Choice

 No. 1 Global IPO Market for 3 Consecutive Years

 The World’s Top International Financial Centre

 Global Investor Base and Robust Liquidity

 Competitive Valuations

 Branding and Visibility

 Designated Offshore RMB Centre

6
Why List in Hong Kong?

Hong Kong is Asia’s Global Market

IPO Funds Raised
140 (2009 – 2011)
No. 1 Global IPO Market for 3 Consecutive Years
 World Federation of Exchanges, 2009-2011
122
 Dealogic
120

No. 1 International Financial Centre

 World Economic Forum
100

No. 1 Free Economy in the World for 18 Consecutive Years

 The Heritage Foundation and Wall Street Journal, 1995-2012
 Fraser Institute and Economic Freedom Network, 1995-2012 80 75

(USD bn)
No. 1 Globalised Economy for 2 Consecutive Years
 Economist Intelligence Unit and Ernst & Young, 2010-2011 60

44
No. 1 World Competitiveness
 International Institute for Management Development 40

27
No. 1 Most Competitive City in China for 6 Consecutive Years
 The Chinese Academy of Social Sciences, 2005-2011 20 16

0
HKEx NYSE LSE Nasdaq SGX

Sources: Bloomberg, World Federation of Exchanges, Dealogic, World Economic Forum, The Heritage Foundation and Wall Street Journal, Fraser Institute and
Economic Freedom Network, Economist Intelligence Unit and Ernst & Young, International Institute for Management Development, The Chinese Academy of
Social Sciences (as at end of 2011) 7
 HKEx is the Global Leader in IPO Funds Raised

HKEx Ranks No. 1 in IPOs Funds Raised for 3 Years Running IPO Funds Raised
60 HKEx
NYSE
50 LSE
■ 2011: USD33 billion IPO funds raised
Nasdaq
40
■ Despite a challenging global economic environment, Hong SGX

(USD bn)
Kong has dominated the IPO market since 2009 30

20
■ HKEx has been among the top 5 global listing markets since
2002. This strong track record reflects the market‟s liquidity, 10
breadth and depth – a critical factor for potential issuers to
choose the listing destination 0
2009 2010 2011

Average Daily Turnover (ADT)

12 11.3
HKEx Average Daily Turnover (ADT) Remains Robust
10 9.2 8.9 8.9
8.0
■ 2011: ADT was about USD 9.0 billion
(USD bn)
8

■ 2011: ADT grew more than 12% since financial crisis 6

restructuring in 2009 4.3
4
■ 2011: ADT increased by 9 times since a decade ago 2.1 2.3
2 1.1 0.9 1.3

0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Sources: WFE, SGX (as at end of 2011) 8

 HKEx’s Rising Dominance

HKEx Ranks No.1 in Terms of Market Capitalization Relative to GDP,

Confirming Continuous Recognition by the International Investment Community

121% 145% 60%

3,325
1,912 3,266

N/A
3 3
58%

3,412
107%
269% N/A
15,641

598
11

% of 5
1,006%
Country
GDP
Market Cap of
All Listed 2,258
Companies
(USD bn)

Exchange‟s
Own Public
17
Market Cap
(USD bn)

Sources: Bloomberg, WFE (as at end of 2011) 9

 International Companies Increasingly Choose to
List in Hong Kong

By Numbers International Companies Distribution

60% 20
■ Increasing number of international companies 55%
continue to list in Hong Kong 52% 18

Number of Newly Listed International Companies

50%

Percentage of the Total New Listings in HKEx

■ 2008-2011: the listing of international 45%
16
companies almost doubled
14
40%

12

30% 10

By Funds Raised 8
20% 18%
■ 2011: newly listed international companies 6
account for 52%
4
10%
■ 2010: newly listed international companies
account for 45% 4% 2
1%
0% 0
2006 2007 2008 2009 2010 2011

Funds Raised # of Companies

Source: HKEx (as at end of 2011) 10

Hong Kong is Asia’s Global Market

Hong Kong has the Most World Top 10 IPOs (2006 – 2011)

25

22.1 22.0
20.5
20 19.7
5.9
18.1
10.1
Funds raised (USD bn)

15

11.2 11.1 11.1

10.4 10.1
10

16.1
8.0
12.0
5 9.8

3.1
0.3
0
ABC (1) ICBC (1) AIA Visa General Motors Bank of China Dai-ichi Life VTB Bank Rosneft Oil Glencore

(1) A shares listing in Mainland China (pink portion), H shares listing in Hong Kong (red portion)

Sources: Bloomberg, WFE, WEF, WSJ (as at end of 2011) 11

International Secondary Listings

Benefits and Characteristics of Secondary Listings on HKEx

■ Secondary listed issuers are primarily Country of Primary
Company Name Listing Date
listed on another stock exchange and the Incorporation Exchange
majority of their securities are not usually
traded on HKEx Manulife Financial Canada 27 Sep 1999 Toronto

■ Overseas incorporated issuers are subject SouthGobi Resources Canada 29 Jan 2010 Toronto
to appropriate standards of shareholder
protection in the home jurisdiction
Midas Holding Singapore 6 Oct 2010 Singapore
■ Standards are at least equivalent to those
required under Hong Kong law Vale S.A. Brazil 8 Dec 2010 Brazil

■ Ch. 19 of Main Board (Ch. 14 of GEM)

SBI Holdings Japan 14 Apr 2011 Tokyo & Osaka
■ Issuers can apply for waivers from strict
compliance of listing rules Glencore International Jersey 25 May 2011 London

■ Accounting standards other than Hong England &

Kong FRS or IFRS may be accepted Kazakhmys 29 Jun 2011 London
Wales

CapitaMalls Asia Singapore 18 Oct 2011 Singapore

Coach, Inc. Maryland, US 1 Dec 2011 New York

12
Hong Kong has the Ideal Platform for
Building a High Profile Investor Base

Through listing in HK, a company can attract Strategic Investors at different stages:

Pre-IPO Cornerstone Post-IPO

Investors Investors Investors

 Major Benefits  Major Benefits  Major Benefits

 New funds to support the  Well known funds /  To build up the reputation
growth of the company investors may help to build and corporate prestige
before listing up investor confidence  To facilitate global
 Strategic investors improve during roadshows expansion strategy
internal control and
operational efficiency to
better prepare for listing

Interim guidance on pre-IPO investment (market consultation will soon be conducted):

 Pre-IPO investment must be completed either:
 (a) at least 28 clear days before the date of the first submission of the first listing application form, or
 (b) 180 clear days before the first day of trading
 Pre-IPO investments are considered completed when the funds are irrevocably settled and received by the applicant

13
 HKEx has Strong IPO and Post-IPO
Fund Raising Capability

IPO and Post-IPO Funds Raised

Continuous Access to Capital 110

■ HKEx enables listed companies continuous access

to IPO and Post-IPO capital

■ Post-IPO fund raising capability was consistently

82
strong for the past decade indicating sustainable 47%
liquidity 75

■ Despite the IPO market downturn in 2008, post-IPO 67

market remained robust, raising USD46 billion 62

54
50% 61%
36%
47%
38
36

What Experts are Saying 28 85%

53%
45%
66% 64%
“There has been a shift from developed markets 15 72% 50%
(USD bn)

39% 53%
raising capital. It is easier to raise money in Hong 8 53%
Kong, where the prices are higher and investors have 55%
60% 34%
capital to invest.” Alexander Matturri, S&P, Financial 47% 28% 15%
40%
Times, November 2011 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

IPO 3 7 8 12 21 43 37 8 32 58 33
Follow-on 5 8 20 24 17 24 38 46 50 52 29

Source: HKEx (as at end of 2011) 14

Branding and Visibility

29 Mar 2010, Reuters

Beauty may be in the eye of the

beholder. In which case, European
companies, and their advisers
considering an initial public offering,
should behold French cosmetics
maker L’Occitane‟s trading
performance next month when it
debuts in Hong Kong.

Pitching a Hong Kong IPO to more

European firms will be easier if the
company pulls off a solid debut. An
17 Jan 2012, Energy Delta early signal: Dow Jones Investment
6 Jun 2011, Financial Times
Banker hears interest was so high
that Monday’s presentation at
Canada's Sunshine Oilsands Ltd. received Prada has filed for a stock market listing in Hong
Hong Kong’s Four Seasons hotel
Hong Kong regulatory approval last week for a US $500 was standing-room-only Kong where it hopes to raise as much as €2.1bn
million to US $700 million Hong Kong initial public ($3.1bn) in an offering that could value the company at
offering. up to €10.5bn ($15.3bn), making it one of the world’s
most valuable luxury goods groups.
If successful, Sunshine Oilsands will
be the world's biggest IPO to date Prada opted for the Hong Kong stock exchange
this year. instead of the Milan or London markets in
recognition of the importance of Asian consumers
Ahead of the planned listing, Sunshine Oilsands raised who are propelling growth in luxury goods.
C$230 million through investments from China Life Altagamma, an Italian association of luxury goods
Insurance (Overseas) Company Ltd., Bank of China company, expects sales to Asia, excluding Japan, to
Group Investment Ltd., Cross-Strait Common rise 20 per cent this year.
Development Fund Co., and several other investors,
the company said in March.

Issuers Receive Substantial Visibility Before and After their IPOs

15
RMB Capability – Laying the Foundation

Oct 2010 Mar 2011 Apr 2011 Oct 2010 to Now Sep 2011 Jan 2012 Feb 2012
Listing of the RMB Listing of the Listing of 20 RMB bonds by 11 companies – Introduced Dual Launch of RMB Listing of first
first RMB Readiness first RMB Agricultural Development Bank of China (3), Tranche Dual Trading RMB Exchange
bond – Asian Testing with REIT – Hui Asian Development Bank, Baosteel Group Counter (DTDC) – Support Traded Funds
Development participants – Xian REIT (6), Galaxy Entertainment, HKCG, Rainbow RMB equity listing Facility (TSF) (ETF) – Hang
Bank 365 EPs and (RMB10.5 bil) Days (2), Genting Hong Kong, Intime model to the market Seng RMB Gold
35 CPs are Department Store, Tesco, Asia Cement, ETF
ready CNPC Golden Autumn (2)

2010 2011 2012 ...

Oct Jan Apr Jul Oct Jan

RMB Bond

RMB REIT

RMB Equity

Other RMB
Products

16
HKEx is the Listing Venue of Choice

Global IPO Leader Top International Mainland China

Financial Centre Gateway

Competitive Branding Diversified

Valuations and and Visibility Investor Base
Robust Liquidity

17
Appendix A – Listing Process

Appointment of Sponsor
Restructuring,
sponsors, submits listing
preparation of
An issuer lawyers, application &
accountants’
decides to list accountants related
report,
on HKEx & other documents
drafting of
professional to the Listing
prospectus
advisors Division of HKEx

Main
GEM Board
Review and approval of
listing application
Roadshow to by the Listing Division
promote to
investors
before trading Hearing by Review of listing
Listing application by the
commences
Committee Listing Division

Average Time:
10-12 weeks

18
Appendix A – Key Main Board Listing Requirements

Financial Requirements Control and Management

To fulfill any one of the following tests: ■ Ownership continuity and control for at least the most
recent financial year
1. Profits Test ■ Management continuity for at least 3 years
■ Net profit of latest year ≥ USD2.6 m
■ Net profit of two preceding years ≥ USD3.8 m
(in aggregate) Public Float
■ Market cap ≥ USD25.6 m

■ Minimum of 25%
2. Market Cap / Revenue Test ■ If market cap ≥ USD1,282 m, public float can be lowered
■ Market Cap ≥ USD513 m to 15%
■ Revenue of the most recent audited year ≥ USD64 m ■ Minimum of 300 shareholders

3. Market Cap / Revenue / Cashflow Test

Professional Advisers
■ Market Cap ≥ USD256 m
■ Revenue of most recent audited financial year
≥ USD64 m ■ Must appoint a sponsor for listing
■ Aggregate positive cash flow for 3 preceding ■ Public offer tranche must be fully underwritten by
financial years ≥ USD13 m underwriters
■ Must appoint a compliance adviser for the period from
listing date to end of publication of financial results for
1st full financial year after listing

19
Contact Us

Issuer Marketing Department

Hong Kong Exchanges and Clearing
Limited

Add. : 10/F One International Finance Centre

1 Harbour View Street, Central, Hong Kong
Tel. : (852) 2840 3780
Fax. : (852) 2530 2858
Email : [email protected]

Eric Landheer
Senior Vice President and Head of Issuer Marketing
Tel. : (852) 2840 3313
Email : [email protected]

HKEx Corporate Website: www.hkex.com.hk

Designated Issuer Website: www.hkexnews.hk

20
 IDENTIFYING THE RIGHT SEGMENT FOR HONG KONG LISTING

May 2012
STRICTLY PRIVATE AND CONFIDENTIAL

Kelvin Ho
Executive Director
J.P. Morgan Investment Bank - Asia
Tel: +852 2800 6507
Email: [email protected]
 Companies from different sectors and countries are already listed on HKEx via HDRs

Existing HDRs
Country Sector Fundraising at listing Reasons for HDRs

Resources No Regulatory

Consumer No Commercial
IDENTIFYING THE RIGHT SEGMENT FOR HONG KONG LISTING

Financial Yes Regulatory

1
 What types of companies would like to pursue HDRs?

Considerations

 Where regulations in the home jurisdictions which prohibit / discourage

 the overseas issuance of shares, or
 the maintenance of an overseas share register

 Prefer to delegate onerous administrative role / execution of corporate actions

 Need to „resize‟ the shares to suit HK market conditions

IDENTIFYING THE RIGHT SEGMENT FOR HONG KONG LISTING

 Perceive the benefit of faster and less costly conversion between exchanges

Additional thoughts on HK listing

 A diversified investor base

 Competitive valuation

 Meet Main Board listing requirements

2
 From which jurisdictions companies will find HDR a more practicable alternative?

Possible jurisdictions / countries

Dematerialization Restricted Register ‘Resizing’
 Japan¹  Brazil¹  US¹
 France¹  Japan¹  UK¹
 Italy¹  France¹
 Taiwan  Russia
 South Korea  India
IDENTIFYING THE RIGHT SEGMENT FOR HONG KONG LISTING

 Mongolia

¹ Acceptable overseas jurisdiction

3
 From which jurisdictions companies will find HDR a more practicable alternative? (con’t)

Typical IPO process

A1 filing Listing hearing / Approval Pricing
1–2 months 2 months+ 1 month 1 week

Discussion with HKEx

pre-IPO submissions,
waiver application

Documentation Due diligence,

IDENTIFYING THE RIGHT SEGMENT FOR HONG KONG LISTING

and logistics prospectus drafting Stock Exchange

HKPO Settlement
review process
Audit, accountants’ Trading
report, property valuation commences
report
Profit & Syndicate Pre- Roadshow /
Develop Settlement
Positioning cashflow research marketing Bookbuilding
equity story
and marketing forecast
Anchor / cornerstone
investor process

Preparation stage of
HKSE review stage Final marketing stage
IPO application

4
3
 Any sectors we expect to see more HDRs?

Non-sector specific DR framework

 Pursuit of HDRs is more driven by jurisdiction and company specific considerations rather than
sector specific
IDENTIFYING THE RIGHT SEGMENT FOR HONG KONG LISTING

Additional thoughts on HK listing

 New Ch.18 / Mining related listing rules

 Public investors / HK investors whose mandates prohibits overseas investments

 Significant presence in China / Asia with strong growth story

5
 What would be conducive to HDR development?

Considerations

 Quality issuers

 Liquidity
 HDRs with large fundraising exercises

 Streamlined listing process

 More acceptable jurisdictions
IDENTIFYING THE RIGHT SEGMENT FOR HONG KONG LISTING

 Faster dual / secondary listing process

 Waivers

6
Listing of Overseas Companies in Hong Kong
Latest Developments

Presented by
Bonnie Chan

May 2012

Davis Polk & Wardwell

Attorney Advertising. Prior results do not guarantee a similar outcome.

A. Jurisdictional requirements for a
Hong Kong listing applicant
The “traditional” jurisdictions of incorporation for
companies listed in Hong Kong

Hong Kong Bermuda Cayman Islands

People’s Republic of China

3
“JPS” on listing of companies from other jurisdictions

 Chapter 19 Main Board Listing Rules + Chapter 24 GEM Listing Rules provide
the framework for listing overseas companies
 2007 SFC / HKEx Joint Policy Statement: to facilitate listing of overseas
companies
 Provides a “roadmap” – a schedule of matters on shareholders‟ protection under 5
headings:
 a corporate structure that clearly protects principal shareholders‟ rights
 fair proceedings for general meetings to enable shareholders to utliise their rights in full
 corporate governance measure that ensure the powers of directors are reasonably contained
and subject to reasonable scrutiny
 the notion of capital maintenance must be enshrined in the corporate structure and with respect
to all corporate actions
 the relevant jurisdiction should have in place arrangements to ensure reasonable regulatory
cooperation with the regulators in Hong Kong
 Continued reforms to streamline the process and ensure consistency
4
Listing of overseas issuers in Hong Kong

To date, the following jurisdictions have been approved:

 Australia  Italy
 Brazil  Japan
 BVI  Jersey
 Canada (Alberta, British Columbia, Ontario)  Luxembourg
 Cyprus  Singapore
 France  United Kingdom
 Germany  US (California, Delaware, Maryland*)
 Guernsey
 Isle of Man * a company from Maryland has previously been
accepted for a Hong Kong listing specifically on
its own facts and circumstances; HKEx will
consider other issuers from the same jurisdiction
on a full examination of their individual cases

5
B. Primary and secondary listings in
Hong Kong
Secondary listed issuers as of Mar, 2012
(8 out of 9 listed between Jan 2010 – Dec 2011)
Secondary Listed Issuers Jurisdiction of Listed on Dates of Secondary Listing
Incorporation in HK
SouthGobi Resources Ltd. Canada - British Toronto Stock Exchange Jan 2010
Columbia
(Stock Code: 01878)
Manulife Financial Corporation Canada - Ontario Toronto Stock Exchange Sept 1999

(Stock Code: 00945)

Midas Holdings Ltd. (Stock Singapore Singapore Exchange Oct 2010
Code: 01021)
Vale S.A. (Stock Code: 06210/ Brazil BM&FBOVESPA and New York Dec 2010
06230) Stock Exchange
SBI Holdings, Inc. (Stock Code: Japan Tokyo Stock Exchange and Apr 2011
06488) Osaka Securities Exchange
Glencore International plc Jersey London Stock Exchange May 2011

(Stock Code: 00805)

Kazakhmys PLC (Stock Code: United Kingdom London Stock Exchange and Jun 2011
00847) Kazakhstan Stock Exchange

CapitaMalls Asia Limited Singapore Singapore Exchange Oct 2011

(Stock Code: 06813)

Coach, Inc. Maryland, US New York Stock Exchange Dec 2011

(Stock Code: 06388)

Primary vs. Secondary

 The same listing eligibility requirements apply regardless of primary or secondary listings
 i.e. secondary listing does not mean lower qualifications
 Concessions may be granted for continuing obligations, if primary listing venue / home
corporate law has equal protections for public shareholders
 Listing preparation takes approximately the same amount of time
 Cost estimate
 HKEx fees for secondary listing significantly cheaper (25% of primary, subject to HKEx discretion to
increase the fee if most of the trading takes place in HK)
 typically no significant saving of professionals costs as detailed advice, structuring and negotiations
are required for obtaining waivers of HKEx continuing obligations
 where company has dual listings, level of ongoing HK compliance cost depends on regulatory
waivers obtained and divergence of requirements between the listing venues
 Broadly the same procedures for voluntary withdrawal of listing

8
Secondary listings in Hong Kong

Listing with an Offering Listing by Introduction

existing broad shareholder base, no need for

listing accompanied by fund-raising in HK
additional capital raising at time of HK listing (e.g.
(e.g. SBI Holdings)
Vale)

 For introductions: no offer of securities in HK at the time of listing → no liquidity in such securities in the
HK market → no existing mechanism for reasonable pricing for trading in the HK market
 Special liquidity arrangements are required
 Company must engage one or more “designated dealer(s)”
 The designated dealer(s) will be allowed to carry out a number of actions to provide liquidity and facilitate market
price discovery – e.g. short sales on the HK market, borrowing shares from existing holders, purchases on the
overseas market
 Designated dealer(s) will be engaged for the duration of the designated period (typically two months), as agreed
with HKEx
 To provide more transparency: daily disclosure on HKEx for a period (e.g. 3 days) before HK listing of closing
prices on the overseas markets where the securities are already listed

9
C. New developments
Proposed consultation to streamline regime

 Replace JPS by rewriting Chapter 19

 focus on jurisdiction where books and records are kept
 removal of nexus requirements
 Proposed “passport” system for secondary listings
 Calls for close cooperation among market regulators and coordinated
release of price-sensitive information in all relevant jurisdictions
 Prospective “passport” countries – IOSCO members and equivalent
markets
 Codification of waivers in secondary listings (currently a long list negotiated
case by case and disclosed in prospectus)
 Create new market segment for companies from countries where there is no
international cooperation

11
Things you need to know –
Hong Kong Listing from
an Auditor’s Perspective

May 2012

Edward Au
Partner & National Co-leader
National Public Offering Group
Deloitte China

©2012 Deloitte Touche Tohmatsu Limited. All rights reserved.

Agenda
Topics

Listing in Hong Kong - Listing Options

Financial Track Record Requirements
Roles of Reporting Accountants
Financial Information in a Prospectus
Additional Information under the HK Regime
General Observations
Practical Issues – Apart from the Typical Accounting Issues…

©2012 Deloitte Touche Tohmatsu Limited. All rights reserved.

Listing in Hong Kong – Listing Options

Primary Listing Secondary Listing

 New listing or dual primary listing of  Companies already listed on and
a company primarily regulated by another
 Full IPO procedures stock exchange and financial
regulator
 Majority of the securities not
usually traded on the Exchange
 Need for sufficient connection with
a foreign market

Other listing options

 Fund-raising or listing by Introduction
 Hong Kong Depository Receipt (HDR)
 Renminbi-denominated Equity – raise off-shore Renminbi funds in
Hong Kong

1 Hong Kong Listing from an auditor‟s perspective ©2012 Deloitte Touche Tohmatsu Limited. All rights reserved.
Financial Track Record Requirements – Main Board
Applicants are only required to fulfill any one of the requirement below:
Profit Test Market Capitalization / Market Capitalization /
Revenue Test / Revenue Test
Cash Flow test
 Market  Market capitalization > HK$2  Market capitalization >
Capitalization > billion (approx. US$256 million) HK$4 billion (approx.
HK$200 million at listing US$512 million) at listing
(approx. US$25  Most recent year revenue >  Most recent year‟s
million) at listing HK$500 million (approx. US$64 revenue > HK$500 million
 Most recent year‟s million) (approx. US$64 million)
net profit > HK$20  Aggregate positive cash flow
million (approx. from operating activities for
US$2.5 million) past 3 years > HK$100 million
 Preceding 2 years (approx. US$13 million)
combined net profit
> HK$30 million Notes: Stock exchange will accept a shorter trading record period
under substantially the same management if the new applicant is
(approx. US$3.8 able to demonstrate that
million) • The directors and management have sufficient and satisfactory
experience of at least 3 years in the line of business
(US$ translations are approximate) • Management continuity for the most recent audited financial year

2 Hong Kong Listing from an auditor‟s perspective ©2012 Deloitte Touche Tohmatsu Limited. All rights reserved.
Roles of Reporting Accountants
Reporting Accountants are required to report on financial information which
included:

 Accountants‟ Report and underlying audited financial statements

 Pro Forma Financial Information
 Profit Forecast
 Indebtedness Statement*
 Working Capital Sufficiency*
 Due Diligence Review of Internal Controls (upon sponsor‟s request)*
 Comfort letter* on the following information:
 Management Discussion and Analysis on the results of operations
 Statement of Financial Position Items
 Liquidity, Financial Resources and Capital Structure
 Trading Record
 Other selected financial information in the “Summary”, “Risk Factors”, “Financial
Information,” “Business” and “Directors, Management and Staff”
* In form of a private report
3 Hong Kong Listing from an auditor‟s perspective ©2012 Deloitte Touche Tohmatsu Limited. All rights reserved.
Financial Information Section in a Prospectus

The financial section of a prospectus generally include:

 Basis of Presentation of Financial Information
 Critical Accounting Policies and Estimates
 Results of the Operations and selected Statement of Financial Position Items
 Working Capital Analysis and Indebtedness
 Capital Expenditure and Commitments
 Off-balance Sheet Arrangements
 Contingent Liabilities
 Quantitative and Qualitative disclosures about market risks
 Related Party Transactions
 Dividend Policy
 No Material Adverse Change
 Profit Forecast
 Unaudited Pro Forma Adjusted Consolidated Net Tangible Assets
4 Hong Kong Listing from an auditor‟s perspective ©2012 Deloitte Touche Tohmatsu Limited. All rights reserved.
Additional Information Under HK Regime

Additional financial information required to be submitted at application:

 Top five customers and suppliers details;
 Aging analysis of top five customers; and
 Inventory details and analysis etc.
Key additional disclosure required by HK Listing Rules and Hong Kong Companies
Ordinance
 Details of directors‟ remuneration
 Top five employee‟ emoluments
 Leases period for properties on leasehold land
 Analysis of major components of other payables and accruals
 Aging analysis of trade receivables and payables
 Maturity profile of borrowings
 Details of retirement benefits plans
 Details of each of the subsidiaries and associates
 Maximum outstanding balance for advance to related parties
5 Hong Kong Listing from an auditor‟s perspective ©2012 Deloitte Touche Tohmatsu Limited. All rights reserved.
General Observations
 Dual vetting process by HKEx / SFC, 3 to 4 rounds of comments
Indicative transaction timetable
Audit of Financial Information for Track Record At least 3 months before Form A1
Period submission
Due Diligence, Structuring, Drafting Prospectus Around 2 months‟ preparation
and Form A1 Submission

Responding to HKEx comments At least 2 months‟ preparation

Listing Committee hearing 4 weeks before listing date (LD)

Pre-marketing and Roadshow 3 weeks before LD

Prospectus (4 versions – Red Herring, WPIP, 2 weeks before LD
HK Prospectus and International Offering
Circular), Public Offering and Placing

Listing LD

6 Hong Kong Listing from an auditor‟s perspective ©2012 Deloitte Touche Tohmatsu Limited. All rights reserved.
Practical Issues – Apart from Typical Accounting Issues…

 Pre-acquisition financial information of acquiree(s)

 Timing of strategic investors/Pre-IPO placing(s)
 Independence from parent company
 Financially and operationally
 Loans and guarantees by parent
 Competing business
 Waiver application from HKEx
 135 days rule for Rule 144 placing
 Bilingual reporting

7 Hong Kong Listing from an auditor‟s perspective ©2012 Deloitte Touche Tohmatsu Limited. All rights reserved.
 CONTACTS
Deloitte China
National Public Offering Group
Edward Au has been an audit partner of Deloitte China since
2003 and has extensive experience in auditing of companies
in Hong Kong, Singapore, U.S., and the Mainland China.

He is the co-leader of the National Public Offering Group of

the China firm and has been actively involved in various debt
and equity offering activities in Hong Kong, the U.S. and
Singapore.

He focuses on IFRS/U.S. GAAP and HKEx/SEC reporting

matters and has sound experience leading our teams in the
Edward Au region serving local and multinational clients in a variety of
industries. He is also the concurring review partner for a
Partner number of our HKEx/SEC-registered clients.
Audit | National Public
Offering Group He is a member of the American Institute of Certified Public
Accountants and a Certified Public Accountant in the State of
Tel: +852 2852 1266
Washington. He is also a fellow member of Association of
Email: [email protected] Chartered Certified Accountants and Hong Kong Institute of
Deloitte Hong Kong, China Certified Public Accountants.

8 Hong Kong Listing from an auditor‟s perspective ©2012 Deloitte Touche Tohmatsu Limited. All rights reserved.
About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and
independent entity. Please see www.deloitte.com/cn/en/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

Deloitte provides audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. With a globally connected network of member firms in more
than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte's
approximately 182,000 professionals are committed to becoming the standard of excellence.

About Deloitte China

In China, services are provided by Deloitte Touche Tohmatsu and Deloitte Touche Tohmatsu CPA Limited and their subsidiaries and affiliates. Deloitte Touche Tohmatsu and Deloitte Touche
Tohmatsu CPA Limited are, together, a member firm of Deloitte Touche Tohmatsu Limited.

Deloitte China is one of the leading professional services providers in the Chinese Mainland, Hong Kong SAR and Macau SAR. We have near 10,000 people in 16 offices in Beijing,
Chongqing, Dalian, Guangzhou, Hangzhou, Harbin, Hong Kong, Jinan, Macau, Nanjing, Shanghai, Shenzhen, Suzhou, Tianjin, Wuhan and Xiamen.

As early as 1917, we opened an office in Shanghai. Backed by our global network, we deliver a full range of audit, tax, consulting and financial advisory services to national, multinational and
growth enterprise clients in China.

We have considerable experience in China and have been a significant contributor to the development of China's accounting standards, taxation system and local professional accountants.
We also provide services to around one-third of all companies listed on the Stock Exchange of Hong Kong.

This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively the “Deloitte Network”) is, by means
of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified
professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this publication.

©2012 Deloitte Touche Tohmatsu Limited. All rights reserved.

 HDR – THE BEST ROUTE TO LIST IN HONG KONG

May 2012
STRICTLY PRIVATE AND CONFIDENTIAL
 A Pioneer in Hong Kong Depositary Receipts (HDRs)

 J.P. Morgan is the 1st and only Depositary Bank that developed the infrastructure to support the HDR product offering.

 J.P. Morgan is the only Depositary Bank with experience on HDR listing. Currently there are three HDRs listed on HKEx
and all of them are serviced by J.P. Morgan.

 J.P. Morgan launched the 1st HDR listing for Brazil‟s Vale SA in December 2010, followed by the 1st HDR IPO for Japan‟s
SBI Holdings in April 2011 and the HDR listing for U.S.‟s Coach Inc. in Dec 2011.

Listed on December 8th, 2010, on the Listed on April 14th, 2011, on the Listed on December 1st, 2011, on the
Hong Kong Stock Exchange Hong Kong Stock Exchange Hong Kong Stock Exchange
HDR – THE BEST ROUTE TO LIST IN HONG KONG

Sole Sponsor, HDR Depositary Bank Sole Sponsor, HDR Depositary Bank and
HDR Depositary Bank
and Designated Dealer Designated Dealer

Petrobras 1st U.S. company

1st
J.P. Morgan Rosneft IPO st Largest ever to list in Hong
Depositary J.P. Morgan 1 HDR: Vale
created the Largest ever 1st GDR to DR capital 1st HDR Kong via HDR
Receipt in created S.A. listing on
1st ADR GDR capital list on SGX: raising event in Offering: SBI
Asia Pacific http://www.adr.com the HKEx
raising Uttam Galva history Holdings

1927 1961 1998 2006 2007 2010 2011

1
 Hong Kong Depositary Receipts (HDRs) – The Best Route To List In Hong Kong

Why HDR?

 The current HKEx Listing Rules require ordinary share issuers to maintain a share register in Hong
Kong and to issue physical share certificates. These requirements effectively bar the listing of
companies from jurisdictions which are dematerialized or prohibit the maintenance of an overseas
share register. The HDR framework is designed to resolve these fundamental regulatory and
operational issues.

 Additional benefits of HDR:

 DR ratio gives greater flexibility in setting the price of the HDR to suit HK investors and peers
 HDR is more efficient when investors want to move their position between different listing venues.
HDR conversion only takes 3 days
HDR – THE BEST ROUTE TO LIST IN HONG KONG

 Single-listing HDR allows issuers to reserve the option to list ordinary shares in home market at a
later stage
 Depositary Bank will responsible for HDR holder services and corporate action processing, which
will reduce the costs and burden of HDR issuers and allow them to focus on their core businesses
 Financial support provided by Depositary Bank
 Value-added services provided by Depositary Bank

2
 HDRs listing on HKEx

 HKEx will accept applications from issuers from any jurisdiction which can meet the requirements of the
Listing Rules. Currently cleared for listing are companies incorporated in1:
 Australia, Brazil, Canada (Ontario & British Columbia), France, Germany, Italy, Japan, Singapore, UK,
USA (California & Delaware), and offshore locations such as BVIs, Cyprus, Isle of Man, Jersey,
Who can issue Luxemburg
 There is no requirement for the issuer to be already listed on its home exchange, i.e. Single-listed HDR is
allowed
 Unsponsored or unlisted HDRs are not allowed

Who can invest  Similar to HK listed ordinary shares, HDR are available to all retail and institutional investors in HK

 Similar to ordinary shares, HDR issuers may list by way of introduction (listing without capital raising) or as an
Types of HDR listing offering (IPO)
 Only allow to list on HKEx Main Board, GEM listing is not allowed
HDR – THE BEST ROUTE TO LIST IN HONG KONG

Currency  HDRs can be traded and settled in HK$ or US$, at the choice of the HDR issuer. HDR can soon be traded and
settled in RMB as well

 The trading, clearing and settlement arrangements for HDRs will be the same as for ordinary shares
Trading and  Stamp duty of 0.1% per trade (both sides) will be applicable on HDR trades. Stamp duty does not applicable to
issuance or cancellation of HDRs
settlement
 A special „DR‟ suffix will be added to the stock short name
 All HDR stock code will be 5 digits and start with „6‟

Source: HKEx: http://www.hkex.com.hk/eng/rulesreg/listrules/listsptop/listoc/list_of_aoj.htm

3
 Contact Information

Thank You
HDR – THE BEST ROUTE TO LIST IN HONG KONG

For more information, please contact:

Kenneth Tse Alex Hickson Candice Teruszkin

Head of DR Asia Pacific Head of DR Europe, Middle East Head of DR Latin America
Tel: +852 2800 1859 Tel: +44 207 777 2805 Tel: +55 219 917 2210
Email: [email protected] Email: [email protected] Email: [email protected]

Joseph Dooley Vikas Taimni

Head of DR Americas Head of DR Emerging Markets
Tel: +1 212 552 3726 Tel: +852 2800 1797
Email: [email protected] Email: [email protected]

4
 Agenda

Appendix: HKDRs vs. Ordinaries and Case Studies 5

HDR – THE BEST ROUTE TO LIST IN HONG KONG

5
 HDR vs. ordinary share listing on HKEx

Listing on HKEx
Tests
HDRs Ordinary Shares

No need to maintain ordinary share registrar in HK, Yes, need to maintain a ordinary share registrar
Ordinary share registrar
only need to maintain a DR registrar authorized by HKEx
Incorporation
Offshore Incorporation Yes Yes

DR/Share Registrar in HK Depositary responsible Issuer responsible

Corporate actions processing* Depositary responsible Issuer responsible

Investor
servicing Dividend processing* Depositary responsible Issuer responsible

Shareholder services Depositary responsible Issuer responsible

APPENDIX: HKDRS VS. ORDINARIES AND CASE STUDIES

To support the development of the HDR program,

Financial support depositary bank will provide financial support to N/A
cover the expenses on HDR related activities
Financial
considerations
Cost to the company will be lower for HDR as
Cost to the Issuer Depositary Bank will be responsible for most of the Company responsible for all costs
operational processing

DR ratio gives greater flexibility in setting the price of

Price Ratio Ordinary shares fixed at 1 to 1 ratio
the HDR to suit HK investors and peers

* According to HDR listing rules, it‟s the issuer‟s responsibility to make corporate action announcements on HKEx, depositary bank will responsible for the corporate action processing

6
 HDR vs. ordinary share listing on HKEx (Cont‟d)

Listing on HKEx
Tests
HDRs Ordinary Shares

• HDR is much faster when investors want to move

• Cross-border movement of shares will require de-
their position between different listing venues.
Time registration and re-registration on 2 ordinary share
Issuance & Cancellation can be facilitated with a
registers which could take at least 7 to 10 days
T+3 timeline

Limited due to time taken for cross-border

Cross-border Arbitrage Yes
movement of shares

Yes. Pre-release further facilitates cross border

Pre-release NA
arbitrage *

Full fungibility between multiple

Fungibility NA
ADR-GDR-HDR-ORD listing
APPENDIX: HKDRS VS. ORDINARIES AND CASE STUDIES

DR investor targeting, institutional ownership

IR Advisory service analysis, investor fact sheets, media relations guidance, N/A
IR website review, IR vendor analysis, etc
Value-added
services
Such as transaction advisory, training, analytics, market
Other value-added services intelligence, seminars, round-tables, whitepapers, N/A
adr.com etc.

Listing requirements

On-going obligations
HDRs and ordinary share issuers are treated identically
Trading and settlement

Listing fees and annual fees

* HDR Pre-release will be available in at a later stage

7
 J.P. Morgan acts as Depositary Bank for the first HDR of Vale SA

Transaction highlights
Listed on December 8th, 2010, on the
Hong Kong Stock Exchange  First ever Hong Kong Depositary Receipt
 First Brazilian company listed on HKEx
 J.P. Morgan acted as the, Depositary Bank, Sole Sponsor and
Designated Dealer for the transaction
 The listing also highlights J.P. Morgan‟s unparalleled execution
capabilities and the firm‟s continued leadership in the depositary
receipts industry
 Objectives and Benefits of the listing:
 Diversification of investor base
Sole Sponsor, Depositary Bank and Designated Dealer  Raise profile of Vale in Asia by listing on HKEx
 Getting closer to Vale‟s biggest market and customers
Offering details
 Expands trading hours
APPENDIX: HKDRS VS. ORDINARIES AND CASE STUDIES

Issuer Vale SA  Making the ordinary shares, ADR and HDR 3-way fungible and
convertible
Common HDR: 6210.HK
Stock code  Establish a platform for future fund raising
Preferred HDR: 6230.HK
Primary listing on São Paulo Stock Exchange Listing issues Resolution
Listing ADR listing on NYSE and Euronext Paris
 Brazil was not previously an  Brazil has been added as an
HDR listing by introduction on HKEx acceptable jurisdiction acceptable jurisdiction for listing
Brazil: Common Shares and Preferred Shares purposes
Traded exchanges
US: Common ADR & Preferred ADR  Restriction on Brazilian
prior to transaction  HDR (Hong Kong Depository
Paris: Common ADR & Preferred ADR incorporated companies to
Receipts) will be issued and
1 Common HDR = 1 Common Share issue shares on a offshore
H ratios listed on HKEx
stock exchange
1 Preferred HDR = 1 Preferred Share

Currency HK Dollar  Initial liquidity may be weak  Improve initial liquidity by

transacting in the US/Brazilian
Listing date December 8, 2010 and Hong Kong market,
J.P. Morgan‟s role Sole Sponsor, Depositary Bank, and Designated Dealer ultimately bringing liquidity to
Hong Kong

8
 J.P. Morgan acts as Depositary Bank for the first HDR IPO of SBI Holdings
Transaction highlights
Listed on April 14th, 2011, on the Hong
Kong Stock Exchange  First ever HDR IPO
 First Japanese company listed on HKEx
 Objectives and Benefits of the listing:
 Diversification of investor base
 Raise profile in Great China by listing in Hong Kong
 Prepare for future expansion into to Greater China markets
 Establish a platform for future fund raising

HDR Depositary Bank

Offering details Listing issues Resolution

 Japan was not previously an  Japan has been added as an

APPENDIX: HKDRS VS. ORDINARIES AND CASE STUDIES

Issuer SBI Holdings

acceptable jurisdiction acceptable jurisdiction for listing
Stock code Common HDR: 7488.HK purposes

20 million HDRs  Japan listed companies are  HDR will be issued and listed on
HDR IPO size
HK$1.6 Billion not allow to issue physical HKEx. A DR registrar is
share certificates established in HK
Primary listing on Tokyo Stock Exchange & Osaka Stock
Listing Exchange  Ordinary share price is too  Applies 10:1 ratio to adjust the
HDR listing on Hong Kong Stock Exchange high to HK investors HDR price to a more acceptable
level
Traded exchanges
Japan: Common Shares
prior to transaction  No solution at the moment due
 Japanese withholding tax
issue to lack of capability for CCASS
HDR ratios 1 Common HDR = 1 Common Share
to provide beneficial information.
Currency HK Dollar However, JPMorgan is working
with third party vendors to
HDR IPO date April 14, 2010 provide a solution to the
investors in the near future
J.P. Morgan‟s role HDR Depositary Bank

9
 J.P. Morgan acts as Depositary Bank for the HDR of Coach Inc.

Transaction highlights
Listed on December 1st, 2011, on the Hong
Kong Stock Exchange  First US issuer to list in Hong Kong with an HDR Program
 Chose to list in the form of HDR because of the flexibility of DR ratio.
 The listing highlights J.P. Morgan‟s unparalleled execution capabilities and
the firm‟s continued leadership in the depositary receipts industry
 Objectives and Benefits of the listing:
 Diversification of investor base
 Raise profile of Coach in Asia by listing on HKEx
 Getting closer to Coach‟s biggest market and customers
 Establish a platform for future fund raising and
 Prepare for expansion into Mainland China
Sole Sponsor, Depositary Bank and Designated Dealer

Offering details Listing issues Resolution

 State of Maryland was not an  Maryland has been added as an

Issuer Coach, Inc. (“Coach” or “the Company”) acceptable jurisdiction for HK acceptable jurisdiction for listing
listing purposes
Stock code Common Depositary Receipts: 6388.HK
 US SEC restriction son US  JPMorgan obtained a No-Action
Listing by introduction, New York Stock Exchange being the companies to issuer shares letter from US SEC
Listing
primary market oversea

Traded exchanges  Ordinary share price is too high  Applies 10:1 ratio to adjust the
APPENDIX II: HDR CASE STUDIES

US: Common shares (COH) to HK investors HDR price to a more acceptable

prior to transaction
level
H ratios 10 Common HDR = 1 Common Share  US withholding tax issue  No solution at the moment due
to lack of tax reclaim
Currency HK Dollar
infrastructure in HK. However,
Listing date December 1, 2011 JPMorgan is working on tax
reclaim solution for the HDR
J.P. Morgan‟s role Sole Sponsor, Depositary Bank, and Designated Dealer investors

This communication shall not constitute an offer to sell or the solicitation of any offer to buy, nor shall there be any sale of securities in the United States, any state of the United States or
other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of the United States, any such state or other
jurisdiction.

11
This presentation was prepared exclusively for the benefit and internal use of the J.P. Morgan client to whom it is directly addressed and delivered (including such client’s
subsidiaries, the “Company”) in order to assist the Company in evaluating, on a preliminary basis, the feasibility of a possible transaction or transactions and does not carry
any right of publication or disclosure, in whole or in part, to any other party. This presentation is for discussion purposes only and is incomplete without reference to, and
should be viewed solely in conjunction with, the oral briefing provided by J.P. Morgan. Neither this presentation nor any of its contents may be disclosed or used for any
other purpose without the prior written consent of J.P. Morgan.
The information in this presentation is based upon any management forecasts supplied to us and reflects prevailing conditions and our views as of this date, all of which are
accordingly subject to change. J.P. Morgan’s opinions and estimates constitute J.P. Morgan’s judgment and should be regarded as indicative, preliminary and for illustrative
purposes only. In preparing this presentation, we have relied upon and assumed, without independent verification, the accuracy and completeness of all information
available from public sources or which was provided to us by or on behalf of the Company or which was otherwise reviewed by us. In addition, our analyses are not and do
not purport to be appraisals of the assets, stock, or business of the Company or any other entity. J.P. Morgan makes no representations as to the actual value which may be
received in connection with a transaction nor the legal, tax or accounting effects of consummating a transaction. Unless expressly contemplated hereby, the information in
this presentation does not take into account the effects of a possible transaction or transactions involving an actual or potential change of control, which may have significant
valuation and other effects.
Notwithstanding anything herein to the contrary, the Company and each of its employees, representatives or other agents may disclose to any and all persons, without
limitation of any kind, the U.S. federal and state income tax treatment and the U.S. federal and state income tax structure of the transactions contemplated hereby and all
materials of any kind (including opinions or other tax analyses) that are provided to the Company relating to such tax treatment and tax structure insofar as such treatment
and/or structure relates to a U.S. federal or state income tax strategy provided to the Company by J.P. Morgan. J.P. Morgan's policies on data privacy can be found at
http://www.jpmorgan.com/pages/privacy.
J.P. Morgan’s policies prohibit employees from offering, directly or indirectly, a favorable research rating or specific price target, or offering to change a rating or price target,
to a subject company as consideration or inducement for the receipt of business or for compensation. J.P. Morgan also prohibits its research analysts from being
compensated for involvement in investment banking transactions except to the extent that such participation is intended to benefit investors.
IRS Circular 230 Disclosure: JPMorgan Chase & Co. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters included herein (including any
attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone not affiliated with
JPMorgan Chase & Co. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.
J.P. Morgan is a marketing name for investment banking businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. Securities, syndicated loan arranging, financial
advisory and other investment banking activities are performed by a combination of J.P. Morgan Securities LLC, J.P. Morgan plc, J.P. Morgan Securities Ltd. and the
appropriately licensed subsidiaries of JPMorgan Chase & Co. in EMEA and Asia-Pacific, and lending, derivatives and other commercial banking activities are performed by
JPMorgan Chase Bank, N.A. J.P. Morgan deal team members may be employees of any of the foregoing entities.
This presentation does not constitute a commitment by any J.P. Morgan entity to underwrite, subscribe for or place any securities or to extend or arrange credit or to provide
any other services.

J.P. Morgan awarded

Best DR Bank – Japan, Taiwan, Best DR Bank Mandate