Initial Public Offering (IPO)

Initial public offering (IPO) or stock market launch is a type of public offering in which shares of a company usually are sold to institutional investors that in turn, sell to the general public, on a securities exchange, for the first time. Through this process, a privately held  company transforms into a public company.

Initial public offerings are mostly used by companies to raise the expansion of capital, possibly to monetize the investments of early private investors, and to become publicly traded enterprises. A company selling shares is never required to repay the capital to its public investors. After the IPO, when shares trade freely in the open market, money passes between public investors. Although IPO offers many advantages, there are also significant disadvantages, chief among these are the costs associated with the process and the requirement to disclose certain information that could prove helpful to competitors.

Details of the proposed offering are disclosed to potential purchasers in the form of a lengthy document known as a prospectus. Most companies undertake an IPO with the assistance of an investment banking firm acting in the capacity of an underwriter. Underwriters provide several services, including help with correctly assessing the value of shares and establishing a public market for shares (initial sale).

Hong Kong is an international financial and information centre, with established laws and regulations. The procedure of IPO is highly transparent. Being the stock exchange with largest market HKEx serves as the ideal platform to go public. An enterprise will increase its valuation and enhance its credibility through listing in HK.

Corporate Image after IPO

  • Company will be noted by the commercial and financial community after IPO, which will enhance international image of the company to procure confidence from suppliers, distributors and other cooperators more easily, as well as helping to expand global markets, and expand business to a higher level

  • IPO will enhance the product brand popularity and reputation of the company

  • The company can build up a global sense and international prospect, and to absorb first-class talents through international commercial platform