Principal Listing Requirements

The information set out below is a summary of the listing requirements as contained in the Rules Governing the Listing of Securities on the Growth Enterprise Market (the "GEM Listing Rules") and is no substitute for the GEM Listing Rules. Since this is a summary, it does not contain all the information that may be important to you. You should read this summary in conjunction with the full text of the GEM Listing Rules as the information referred to below is expanded or qualified in the GEM Listing Rules.

No profit requirements

In recognition that promising growth enterprises may not always have achieved a past profit record, the GEM Listing Rules does not impose a profit requirement on listing applicants.

Sponsor and sponsorship period

A listing applicant must appoint a GEM Sponsor to submit its listing application and the appointment must continue for a fixed period covering at least the period comprising the remainder of the financial year in which listing takes place and the 2 full financial years thereafter (the "Period").

Acceptable jurisdictions

The new applicant must be incorporated under the laws of Hong Kong, the PRC, Bermuda or the Cayman Islands.

Operating history

The new applicant must:

1.   demonstrate at least 24 months of Active Business Pursuits;

Note: In the case of a newly-formed project company or natural resource exploitation company, or in exceptional circumstances acceptable to the Exchange, this requirement of 24 months of Active Business Pursuits may be relaxed subject to the Exchange's approval.

2. have actively pursued a focused line of business;

3. be under substantially the same management and ownership over the period of Active Business Pursuits;

4. control the board of the subsidiary or subsidiaries and have an effective economic interest of not less than 50% of that subsidiary or those subsidiaries, if the active business is carried out by its subsidiary or subsidiaries; and

5. have an accountants' report covering at least 2 full financial years immediately prior to the date of listing document.

Future prospects

The new applicant must set out its business objectives and explain how it proposes to achieve them over the Period.

Minimum public float

The new applicant has to meet the following requirements:

1.       for companies with a market capitalisation of below HK$1 billion, the minimum public float is 20% subject to a minimum of HK$30 million;

2.       for companies with a market capitalisation of HK$1 billion or above, the minimum public float is the higher of HK$200 million or 15%; and

3.       the new applicant must have not less than 100 public shareholders at the time of listing.

Corporate governance

The new applicant must have:

1.       appointed competent personnel to fill the following positions: Company Secretary, Qualified Accountant, Compliance Officer and Authorised Representatives;

2.       appointed at least 2 Independent Non-executive Directors; and

3.       established an audit committee.

Underwriting

Underwriting is not compulsory at the time of the initial public offering.

Others

Initial management shareholders and significant shareholders of the new applicant must collectively hold not less than 35% of its issued share capital at the time of listing.

Listing Procedure

The following flow chart provides an overview of the listing procedures and is for reference purpose only. You should consult a GEM Sponsor, other professional advisers or contact us for more information on the listing process.

Initial Cost of Listing

The following major categories of the initial cost of listing are for indicative purpose only and are by no means exhaustive. They may vary depending on the circumstances of each case. You should consult a GEM Sponsor or other professional advisers for more information.

The major categories of the initial cost of listing normally include the following:-

1.

Professional fees

·  sponsor fee

·  company's legal adviser fee

·  sponsor's legal adviser fee

·  reporting accountants fee

·  property valuation fee

·  public relation adviser fee

2.

Cost of publications

·  prospectus, application forms, share certificates and other printing fee

·  translation fee

3.

Marketing expenses

4.

Others

·  share registrar fee

·  receiving banker fee

·  underwriting commission, if applicable

·  initial listing fee

·  transaction levy

Except the initial listing fee and transaction levy, all the other fees set out above are negotiable between the new applicant and the relevant parties and are subject to market forces.

The initial listing fee, which normally accounts for a small portion of the total initial cost of listing, is payable to the Exchange at the time of the submission of a listing application. It is non-refundable and is calculated by reference to the proposed market capitalisation of the listed securities. The details of the initial listing fee are set out in Appendix 9 of the GEM Listing Rules. A summary of the initial listing fee is shown in the table below:

Initial Listing Fee

Monetary value of the equity securities to be listed                                      Fee payable(HK$)

Not exceeding HK$100m                                                                                  100,000

Not exceeding HK$1,000m                                                                               150,000

Over HK$1,000m                                                                                                 200,000

The transaction levy payable by the new applicant to the Exchange is 0.011% of the value of the securities to be issued by the new applicant. For details, please refer to Appendix 9 of the GEM Listing Rules.