Foreign Listings on TWSE. Taiwan Stock Exchange Dec. 11, 2017

Transcription

1 Foreign Listings on TWSE Taiwan Stock Exchange Dec. 11,

2 Outline I. Why IPO? II. Why Taiwan? III. How to List on TWSE? IV. Foreign Listed Companies on TWSE V. Summary VI. Appendix 2

3 I. Why IPO? 3

4 Benefits of IPO What Boss Worries! The cost of regulatory compliance, business succession plan, dilution of shareholding etc. What s worth-ipo Creates New Values Fund-raising ability Capital can be used to fund capital expenditure, R&D or used to pay off existing debt. Compliance The listings retain professionals for services and comply with regulatory requirements Sustainable Growth Talents Easily recruit excellent employees by giving them stock compensation plan. Successor From private to public, it is easier to transfer ownership either to the successor or buyer 4

5 II. Why Taiwan? 5

6 Features of Major Capital Markets Taiwan capital market best fits for median-size floating considering the Average Market Cap, Turnover Rate and P/E Ratio. Market Name 100% Mkt Cap Mkt Cap. (US$M) Rank Source: WFE and Bloomberg, as of Oct.31, No. of Listing Avg. Mkt Cap (US$M) Turnover Rate P/E Ratio TWSE 1,072, , % SGX 775, , % HKX 4,134, ,082 1, % NASDAQ 9,585, ,940 3, % % 60% 40% 20% 0% NYSE 21,377, ,283 9, % TW 50 Mid-Cap 100 SMEs 17% 15% 68% Mkt Cap 36% 29% 35% Trading Vol. Group No. of Listing Mkt Cap (US$M) Avg. Mkt Cap(US$M) Turnover Rate TW ,545 14, % Mid-Cap ,821 1, % Other SMEs , % 38 P/E

7 Here are some facts about NASDAQ Average market cap of a NASDAQ listing company is about US$ 3.26bn. TOP 25% listings accounted for 94% of the total market cap, as well as 92% of trading value. LAST 25% (about 700 Co.) listings average market cap is below US$ 33M. Compliance cost in the US is quite a burden for SMEs. ICT & SMEs are more than welcome by TWSE. NASDAQ equity markrt summary 5.82% 93.97% 0.22% Top 25% Mkt Cap medium Last 25% 7.65% Trading Value 91.91% Source: Bloomberg, period: 2016/12/6-2017/12/6 0.44% Top 25% medium Last 25% Top 10 listings of NASDAQ Name Mkt Cap. P/E 1 APPLE INC ALPHABET INC-CL A MICROSOFT CORP AMAZON.COM INC FACEBOOK INC-A INTEL CORP COMCAST CORP CISCO SYSTEMS INC AMGEN INC NVIDIA CORP Source: Bloomberg, Dec. 6, 2017, Unit:US$ bn

8 Multi-Layer Equity Market 742 Stocks 7 ETFs 1 TDRs More than 4,000 warrants Mkt. Cap. US$ 110 bn 2002 年 Emerging Board 281 stocks, Mkt. Cap. US$ 26.7bn Founded in 1994 Founded in 1962 MAIN BOARD Mkt. Cap. US$ 1 tn. T:18 TDRs W:upward of 10,000 warrants S:904 Stocks E:81 ETFs 2014 年 Go Incubation Board 2015 年 Equity-Based Crowd Funding 2013 年 Gofunding Zone Unit: NTD, as of November

9 Significant Presence of Global Investors % 26% Oct-17 0 Trading value from foreign investors (%) Market value held by foreign investors (%) Source: TWSE. 9

10 Diversified Funding Strategies Ever-Lasting Fundraising sustains Listings Development Unit: NT$ 100Million IPO SPO GDR BOND Oct-17 It s flexible in financial planning for our listed companies to launch a follow-on offering by issuing shares, corporate bonds and overseas DRs Upwards of 40% Foreign Listed Companies launch SPO accordingly Source: TWSE. 10

11 Foreign Listings Outperform the TWSE Index Increasing No. of Foreign Listings, especially from ASEAN Issuers based on China Issuers based on USA As of Nov. 2017, Unit:no. of IPOs Issuers based on ASEAN No. of Foreign Listings Foreign Listings Outperform the TWSE Index As of Oct. 2017, Unit:%, US$bn Foreign Listings TWSE Turnover % 61.31% Market Cap 33(A) 1,082(B) A/B is only 3.1% Trading 60(C) 664(D) Value C/D is up to 9.0% P/E Ratio

12 Diversified Foreign Listings No matter your location, nationality and industry, TWSE is the one! Upwards of 80% have operations in China and US is the 3rd Both ICT and non-ict, float shares and achieve fair value Technology 41% ASEAN 9% USA 5% China 85% China, 58 ASEAN, 6 USA, 3 Others, 1 Note: As of Nov. 30, ICT 31% 10% ICT, 21 Biotech, 7 Electric Machinery, 8 Trading and Consumers' Goods, 6 Others Biotech 12

13 III. How to List on TWSE? 13

14 Listing Requirement Criteria General Enterprise Technology Enterprise (I.D.B. ) Agriculture Enterprise (Council of Agriculture) Duration of Existence Company Size 3 years 1 year Paid-in capital or Net-worth: NT$600 mil. (appx. USD 19 mil.) Market Cap.: NT$1.6 bn (appx. USD 52 mil.) Paid-in capital or Net-worth: NT$300 mil. (appx. USD 9.7 mil.) Market Cap.: NT$0.8 bn (appx. USD 26 mil.) Profitability No accumulated deficit Cumulative net income before tax for the most recent 3 years is NT$250 mil. (appx. USD 8 mil.) Net income before tax for the most recent year is NT$120 mil. (appx. USD 4 mil.) Net worth shall not be lower than 2/3 of the capital Working capital is sufficient for 12 months Others Designate a litigious and non-litigious agent in Taiwan At least 1 of the independent directors shall be domiciled in Taiwan 14

15 Clear Review Points Assure Quality IPOs Information Disclosure Board of Director Corporate social responsibilities Shareholder protection Internal control system establishment Consistency of cash flow and order delivery Patent & certification R&D & talents Corporate Governance Internal Control R&D Compliance Financial Competitive Niches Sound regulatory framework par with international standards Financial reports present fairly in all material respects Opinion of CPAs Peer comparison Sales validity 15

16 Efficient Application & Review Process Foreign listings take only 4-6 months to finish listing application. Pre-Listing Prep. Counseling Period 6 months Review Process 2-3 months Preparation to list 2-3 months Intermediaries -Underwriter -CPA -Attorney Issuer s Preparation Internal / Financial Audit Taxation Legal Discrepancies Prospectus Documents Review Listing Review Committee Approved by TWSE s Board of Directors Effective Registration Offering, Issuing and Underwriting Shares Share Dispersion Centralized Custody of Shares Application of Trading Note:TWSE s review fee takes NT 500k (appx. USD 16k), Annual maintenance fee depends on amount of issuing shares and ranges from NT 100k to 450K (appx. USD 3.2k-14.5k) Reasonable cost for Listing Review and Post-Listing Maintenance 16

17 IV. Foreign Listed Companies on TWSE 17

18 (i) BizLink Industry Sector: Other Electronic Operation Location: Fremont, California Date of Listing : Paid-in Capital: NT$ 1.2 bn (appx. US$ 38.5M) Product: Wire Harness and Connector Pre-listing Book Value Identify Fair Value IPO Mkt Cap Mkt. Cap M M 1,038.5 M +186% +852% Unit:USD Marks UP- Sustaining its Continuous Operation Growth leading global interconnect solution provider Unit:NT$ Billion, NT$ dollar for EPS Q3 Sales EPS HQ manufacturing sites Listing on TWSE sales and engineering support 18

19 Industry Sector: Semiconductor Operation Location: US, China, India Date of Listing: Paid-in Capital: NT$ 874M (appx. US$ 29M) (ii) Silergy Corp. Pre-listing Book Value IPO Seeding IPO Mkt Cap Mkt. Cap M M 1,852.7 M Product: Analog IC +630% +608% Unit:USD Unit:NT$ Million 1,371 2,087 3, ,701 7,139 6,298 1,201 1,470 1, Q3 Sales Net Income Sales went up significantly Silergy on Forbes Lists Asia's 200 Best Under A Billion Future Focus Smartness/Green Power/ IOT

20 (iii) Gourmet Master Co. Ltd. Industry Sector: Tourism Operation Location: Taiwan, China, US Date of Listing : Paid-in Capital: NT$ 1.63 bn (appx. US$ 54.3M) Product: chain stores of fresh bread, cakes and beverages From 1 to 1,037 stores TW Top 20 Branding Market Value up to USD 2.05 bn Sales Breakdown by Region IPO Mkt CAP 0.72 bn Sales 6yr CAGR up to 20% 20

21 V. Summary 21

22 Realize your potential by listing on TWSE Utilize Capital Raised Consolidate Strategic Alliance Enable R&D Capability Strengthen Information Disclosure Enhance Corporate Governance Commit to Social Responsibility Expansion Phase Start-up Phase Underwriters Legal Counsel CPA Growth Phase Listing Application Phase Funding supports business development Duration of Existence Company Size Profitability Dispersed Shareholding Incorporation 22

23 VI. Appendix 23

24 Listing Requirements in Main Capital Mkt Market General Condition Profitability Application Fee TWSE SGX The foreign issuer or any of its controlled companies shall have an operational track record of 3 years or longer. Paid-in Capital or Net worth:nt$ 600,000,000 Market Capitalization:NT$1,600,000,000 The cumulative net income before tax for the most recent three fiscal years of the foreign issuer is NT$250 million or higher, and the net income before tax for the most recent fiscal year is NT$120 million or higher and the foreign issuer has no accumulated deficits. Three years audited accounts. Required to meet one of the following financial standards i) Earnings Test: Aggregate for last three fiscal years >= US$ 10M; Each of the two most recent fiscal years >=US$ 2M; Each of the prior three fiscal years >$0 ii) Global Market Capitalisation Test Issuer must have at least: US$ 200Min global market cap. Companies must meet all of the criteria under at least one of the four financial standards below: Standard 1:Earnings-Aggregate Pre-Tax Earnings in prior three fiscal years > $11 million and Each of the prior three fiscal years > $0 and Each of the two most recent fiscal years > $2.2 million. Standard 2:Capitalization with Cash Flow-Aggregated Pre-Tax Earnings in prior three fiscal years > $27.5 million and Each of the prior three fiscal years > $0. Average Market cap.> $550 million over prior 12 months Market cap. Revenue of previous fiscal year > $110 million. Standard 3:Capitalization with Revenue-Average Market cap.> $850 million over prior 12 months Market cap. Revenue of previous fiscal year > $90 million. Standard 4:Assets with Equity-stockholder's equity is up to 55 million. Minimum consolidated pre-tax profit of at least S$30 million for the latest financial year with operating track record of at least 3 years; Profitable in the latest financial year, and has a market capitalization of not less than S$150 million based on the issue price and post-invitation issued share capital with operating track record of 3 at least years; Operating revenue in the latest completed financial year and a market capitalization of not less than S$300 million based on the issue price and post-invitation issued share capital. Real Estate Investment Trusts and Business Trusts who have met the S$300 million market capitalization test but do not have historical financial information may apply under this rule if they are able to demonstrate that they will generate operating revenue immediately upon listing. Operating track record required is at least 1 year. USD$16k The entry fee is up to US$ 500K. The entry fee is up to US$ 50K ~ 75K. USD$71k~143k 24

25 THANKS FOR YOUR LISTENING Foreign Listing Department Chien-chung TIEN TEL: Chang-i CHUANG TEL: Nai-yu KUO TEL: