If the normal listing process is followed, Fragrant Duck would definitely not meet the requirements. First of all, the company that chooses to go public must be a public company.
Secondly, there are also requirements for the market value at the time of listing, which must be guaranteed to be above HK$5 million, and the minimum number of shares issued must be 25%. These issued shares must be circulated in the market and held by the public.
The most difficult part is the operating record of listed companies, which is generally five years. This is really a bottleneck problem for companies that are developing rapidly and are eager to go public.
The next step is to apply for a listed company to sell no more than 10% of its shares to its members, submit the listing application and information, and then pay the fees, which is 100,000 yuan for the first time, among other conditions.
Therefore, Mo Zhexuan adopted the method of backdoor listing. Simply put, it is to acquire an already listed company with a low market value from the stock market.
After obtaining control, the parent company's assets are injected into the listed company, and then financing is carried out through the issuance of additional shares to achieve the purpose of listing.
In the 1990s, this phenomenon was everywhere.
With the continuous improvement of the Hong Kong Stock Exchange, more and more mainland and overseas companies are choosing to list in Hong Kong.
If the company were to go public according to the formal procedures, the amount of manpower, material resources and time required would be astronomical.
Therefore, in order to take a shortcut, acquiring a listed company with lower assets and turnover market value becomes the best choice. This type of company is also called a shell company.
At present, the trend of acquiring shell companies has not yet taken off in Hong Kong. It was not until the emergence of gold medal expert James Tien that acquiring shell companies became a business.
Gome, which later became famous as the work of Huang Guangtou, and Lao Wang, who had a small goal of 100 million yuan, both suffered losses from listing. After purchasing the listed shell from Zhan Peizhong, they also had to purchase its certified equity, otherwise how could they issue shares that could be subscribed.
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