A steady stream of initial public offerings (IPOs) that raised about HK$450 billion in Hong Kong last year points towards a bright future for local accountants, legal firms and investment banks that help companies achieve their public listing aspirations.
'Working on IPO projects can be both challenging and rewarding,' says Edmond Chan, PricewaterhouseCoopers (PwC) partner. He says navigating the complex procedure of taking a private company public involves a number of different stages requiring close cooperation between the financial services industry and the legal profession.
At the outset, accounting firms such as PwC work with clients to determine listing strategies and help to structure financial reporting processes that meet regulatory and listing requirements.
'There are a lot of changes that need to take place before a private company can become public. Helping a client prepare for an IPO is not just a simple set of procedures,' Chan says. 'The key is to understand our clients' businesses and help them to prepare for their IPO from a tax, finance and internal control perspective. The process requires a lot of industry knowledge, analytical skills and, most importantly, common sense.'
Chan says normally it takes nine to 12 months to complete an IPO. Accounting firms working with clients on IPO preparation can be involved in the reorganisation of business and group structure for listing purposes and identify strategic investors to provide capital to enable the company to proceed to the IPO stage.
Chan says within PwC, finance professionals could apply to join the firm's Capital Market Services Group where they can specialise on working on IPOs and further their careers. 'Employees with Hong Kong IPO experience, who wish to work in Europe or the US where they can help global companies list in Hong Kong are always warmly received,' he says.
Despite the optimism, erratic stock markets and a recent series of accounting irregularities - involving mainland publicly traded companies listed in the US - has highlighted the challenges for auditing firms that work with mainland clients. Quick to distance Hong Kong from unwanted attention, Charles Li Xiaojia, Hong Kong Exchanges and Clearing chief, stated several times that Hong Kong has a robust system for vetting IPO candidates.