HKSI Paper 5 case studies

HKSI Paper 5 · Put your knowledge to work in context.

HKSI Licensing Examination Paper 5, Regulation of Corporate Finance, is one of the papers in the Hong Kong Securities and Investment Institute's licensing examination series. It is designed for practitioners who advise on or execute corporate finance transactions in Hong Kong: sponsor and financial adviser staff, investment bankers, compliance officers, lawyers and others whose roles touch listing, takeovers or capital raisings. The HKSI Paper 5 case studies are 5 cases and about 4,077 words.

Sole sponsor appointed six weeks before the A1: timetable, due diligence and the Application Proof

Your firm has been engaged as sole sponsor of a Main Board IPO by a Hong Kong-incorporated specialty chemicals manufacturer whose operations are all in Guangdong. The engagement letter was signed on 2 May.

848 words, about 4 min 2

Buying a supplier from the chairman's sister's husband: connected transaction ratios and approvals

A Main Board listed issuer (market capitalisation HK 6.0 billion, total assets HK 8.0 billion, revenue HK 5.0 billion, net profit HK 600 million) proposes to acquire 100% of a raw-material supplier from a holding company owned 60% by the chairman's sister's husband and 40% by an unrelated private equity fund. The consideration is HK 420 million.

758 words, about 4 min 3

Crossing 30% with a block purchase and a brother's on-market buying

Ms Lau holds 26.0% of the issued shares of a Main Board listed issuer. On 3 June she signs a sale and purchase agreement to buy 8.0% from the founder at HK 8.20 per share; the market price that day is HK 6.90.

758 words, about 4 min 4

A lost customer, a delayed announcement and the CFO's circle

On 3 March the CFO of a Main Board listed issuer is told by its largest customer, representing 35% of revenue, that the supply contract expiring on 30 June will not be renewed. The CFO informs the CEO and the chairman the same day.

899 words, about 4 min 5

An applicant that fails the profit test but may pass the market cap/revenue test

A Hong Kong-incorporated industrial equipment maker applies for a Main Board listing. Its audited results show profit attributable to shareholders of HK 30 million in the latest year, HK 28 million and HK 22 million in the two preceding years, and revenue of HK 520 million in the latest year.

814 words, about 4 min