Re: Revisedguidance Onnewlistingapplications

Our Ref:RW20030527-0013 2 June 2003

To: Allsponsor firms

Attn.: Alldirectorsandcorporatefinanceadvisorystaff

DearSirs

Re: RevisedGuidance onNewListingApplications

On24July2002,theExchangeannouncedinitiativestosimplifyandstreamlinethe listingprocessandtoimprovethequalityofvetting,withtheintentiontoreducethetime requiredforprocessinganewlistingapplication(the"EnhancedProcessFlow").We writetoprovideanupdateonthoseinitiatives andtointroduce newguidanceand documentationtobefiledwhen submittinganew listingapplicationtotheExchange.

EnhancedProcessFlow

Theinitiativesto streamlinethelistingprocessandstrengthentheproceduresforvetting listingapplications includedreorganising ListingDivisionexecutivesintointegrated teamsundertheCorporate FinancesectionoftheListingDivision. Thisreorganisation hasbeencompletedandeach CorporateFinanceteam,ledbyaseniorexecutive,will be responsibleforallaspectsofthelistingprocess,includingaccountancy matters, prospectusvettingandauthorisationforthepurposeofCompaniesOrdinanceregistration. Webelievethatthisintegrated approachshouldmakethevettingoflistingapplications andothertransactions moreefficient.Wehavealsointroducedarrangements in conjunctionwiththeSecuritiesandFuturesCommission tohelpensurethesmooth operationofthedualfilingandvettingsystemintroduced undertheSecuritiesand Futures Ordinanceon 1 April2003.

TheEnhancedProcessFlowisdesignedtoleadtoconsiderably lessdetailedvettingof prospectusesbytheExchange,andacorrespondinglygreaterrelianceontheworkof sponsors. Thisreinforces theneedtoensurethehighestprofessionalstandardsand competenceonthepart ofsponsors. Sponsorsareexpectedtoapply stringentcriteriain selectingandbringingforwardcandidates suitableforlisting,andmustmaintainahigh standardofduediligenceinpreparingthenewapplicantforlisting.Aconsultationpaper settingoutproposalstoenhancetheregimeforSponsorshasbeenpublishedandthissets outingreaterdetailour expectationsinthisregard.

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Aspartofoureffortstoimproveefficiencyinvettingnewlistingapplications,wehave preparedrevisedguidanceonnewlistingapplications. Wealsotakethisopportunityto setoutsomeofourexpectations withrespecttotheapproachtobetakenbysponsors when submittinganew listingapplicationtotheExchange.

RevisedGuidanceandChecklists(the“Guideline”)

WhiletheListingRuleshavesetoutcertaindocumentaryrequirementsandsubmission procedures,inpracticetheExchangehasrequestedsupportinginformationfromsponsors onthenewlistingapplication,andincircumstances whereissuesareidentified, additionalinformationonthoseparticularissues.Wehavepreparedchecklistssettingout indetailmostoftheinformationrequiredateachstageofthevettingprocess,takinginto accountboththedocumentary requirements setoutintheListingRules,andthe supportinginformationgenerallyrequestedbyus. TheGuidelinewillassist sponsorsto assembleinformationrequiredinanewlistingapplicationinanorganisedmanner,andto submitall relevantinformationrequiredtoassessthenewlistingapplicationonatimely basis. Itisexpected thatwiththenewGuideline,theListingDivisionwillbeprovided withthenecessaryinformation,andwillbeinabetterpositiontocommencevettingof a newlistingapplication andidentifyprincipalissuesmoreeasilyuponthelodgementof theapplication.

Sponsorsshouldbeawarethatthelengthoftimetakentoapproveanapplicationislikely toincreaseiftheissuerandsponsordonotprovideallinformationanddocumentswhich theExchangehasrequestedorarerequiredundertheListingRulesinatimelymanner;or raiseasignificantnewissueorincludesignificantnewinformationinconnectionwithan applicationor prospectusafterithas beensubmitted.

InorderfortheExchangetocommencevettingimmediatelyuponthelodgementofanew listingapplication,itisimperativethatallrelevantinformationrelatingtotheapplication isprovidedfromtheoutset.TheexistingListingRulesrequirethatanadvancedproofof theprospectusandcertaindocumentsshouldbesubmittedwiththeadvancebooking form. Thisrequirementwillbestrictlyadheredto,andtheListingDivisionwillnot hesitatetoreturnanynewlistingapplicationiftheprospectusisnotinanadvancedstate, ispoorlydrafted,thedisclosurethereinisfoundtobeinadequate,orifsomeofthe documentsrequiredtobesubmittedareoutstanding.

SeniormembersoftheListingDivisionareinvolvedinreviewingdocumentation atan earlystageand,inthefirstinstancedeterminingwhetheror nottocommenceour review ortoreturnadraftprospectusonthegroundsthatitisnotinanadvancedform.Theywill raisecomments onprincipalmattersrelatingtothesuitability ofthenewapplicantfor listingandseekclarificationof disclosuresinthedraftprospectus.

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Itisyourresponsibility,andthatofthenewapplicant,toensurefulldisclosure ofall materialinformation, includinganyconsequentialchangesnecessitated following responsestoourcomments,inthedraftprospectus. Thetimetableforthenewlisting applicationmaybedelayedifresponsestoour commentsfailtoaddresstheissuesraised by us adequately.

Delaysmayalsooccurwheretherearematerialinconsistencies intheprospectus disclosure(whetherinternaltotheprospectus,orbetweentheprospectus andother information supplied),orwheretherearematerialchangestothemethodoflisting,the composition andstructureofthenewapplicant,ortotheinformationdisclosedinthe draftprospectus.If,duringthe courseofvettingthe newlistingapplication,weidentify materialissueswhich,inourreasonable view,mayaffectthesuitabilityofthenew applicant forlistingandwhichoughttobebroughttoourattentionbythesponsors,we maynotproceed withthevettingofthenewlistingapplication. Underthese circumstances, youarerequiredtoresolvealloutstandingissuesandredraftthe prospectusbeforewe willre-commencevettingtheapplication.

MatterswhichshouldbebroughttotheattentiontotheExchange

Sponsorsshouldassessbeforesubmitting anapplicationwhether,intheiropinion,all relevant matterswhichshouldbetaken intoaccountbytheExchangeinconsideringthe applicationhavebeendisclosedintheprospectusorotherwiseinwritingtotheExchange. Shouldanyfurtherinformation cometothesponsor’sattentionaftersubmittingthe applicationthesponsor mustinformtheExchangewithoutdelay.

Ourexperienceisthatsomesponsorshavenotbeenforthcominginraisingnovelor contentiousissuesandborderlinecasesoninterpretation oftheListingRuleswiththe Exchangeonatimelybasis. Earlyresolutionofsuchissueswillgreatlyfacilitatethe listingprocess.

Inpartanabsence ofclarityaboutwhichmattersshouldbebroughttotheExchange’s attentionmayhavecontributedtothisbehaviour.Toprovidefurtherguidanceonmatters whichasponsorshouldbringtotheattentionoftheExchange weattachasanannexto thisletteranon-exhaustive listofitemswhichshouldberaisedwiththeExchange (whetherrelatingtopotentialissuesoradditionalinformation inrelationtothe application),andwhich,ifidentifiedbyusinthecourseofourvetting,mayresultindelay inthetimetable.Sponsorsarerequestedtocarefullyconsidertheitemssetoutinthislist, andanyotherpotentialissuesrelatingtoanewapplicant’scircumstances.Sponsorsare encouragedtomakeasubmission totheExchange(togetherwiththenewlisting applicationform)onidentifiedissuesonaprudentbasiseveniftheyareoftheviewsthat suchmattershavebeenadequately resolved,orthatsuchmatterswouldnotbringinto questionthesuitabilityfor listingof thenew applicant.

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PleasenotethatthechecklistsandtheGuidelineareprovidedtoassistboththeExchange andnewapplicantsandtheirsponsors inensuringthattherelevantListingRuleshave been considered,andthecompletenessofinformationprovidedanddisclosedinthe prospectus. IncompletechecklistsmaycausetheExchangeto returnanewlisting application,totheextentconcernsareraisedonthecompletenessoftheinformationand documents submitted withthe application. If the Exchange hasconcerns about the mannerinwhichchecklistshavebeencompletedormattershavenotbeenbroughttoour attentionina timelyandprudentmanner,wemayreassessthequalityofinformation provided totheExchange, andmaydelay thelisting application and take anyother actionsasappropriate.

Nextsteps

TheGuidelinereplacesexistingchecklistsfor newlistings,andiseffectivefornew applicationssubmittedfrom16 June2003. ForlistingapplicationsinprogresstheListing Division willseektoimplement thespiritoftheserequirements andmayrequestthe sponsortoprovideinformationsimilartothosesetoutintheGuideline.

Improvingtheefficiencyofthevettingprocessrequiresconcertedeffortfromallparties involvedinthelistingprocess. TheGuidelinehasanimportantroleinthisprocess,and sponsorsareinvitedtoprovideuswithfeedbackontheGuideline. Wewillmonitorthe effectivenessofthis Guidelineandmakefurtherrevisionsbasedonresponsestothe Guidelineandinputfromsponsors. Furtherguidancewillalsobeprovidedtosponsors onthenewlistingprocess.

AcopyoftheGuidelineisattached andwillbeavailableontheHKEx e-Submission system ( We hope that you will find this Guideline useful. Ifyouhaveanyquestionsonthe Guidelineoroninformationthatshouldbe submittedwiththenewlistingapplication,youarewelcometo contactus.

Yoursfaithfully

Forandonbehalfof

TheStockExchangeofHongKongLimited

KarenLee

ExecutiveVicePresident

Listing,RegulationandRiskManagement

Encls.

c.c.:ReportingAccountants(w/oenclosures) LegalAdvisors(w/oenclosures)

Annex

MATTERSWHICH SHOULDBEBROUGHT TOTHEATTENTION OFTHE EXCHANGE

Thefollowingisanon-exhaustivelistofitemsrelatingtonewlistingapplicationswhich, basedonexperience,shouldbebroughttotheattentionoftheExchangewhensubmitting anewlistingapplication. Toavoidunnecessarydelaysinprocessingthenewlisting application,youarerequestedtocarefullyconsidertheitemssetoutinthislistandany otherpotentialissues/peculiarmattersrelatingtoyourparticularcase.Whereapplicable, pleaseprovideaseparatesubmissionsettingoutdetailsandtheproposedresolutions of such matters.

Youareencouraged tomakeasubmission totheExchangeonallpotentialissues, arrangements,informationandanyothermattersdeservingtheExchange'sattention.Asa guide,anegativeresponsetothestatements belowwouldmerittheprovisionoffurther detailedinformationandexplanations. Delayinprocessinganewlistingapplication mayariseifsuch mattersareonlyidentifiedby us duringthecourseof vetting.

Pleaseconfirmtousthatyouhaveconsidered theitemssetoutinthislistandthe particularcircumstances ofthenewapplicant,andtothebestofyourknowledgeand belief,havingmadedueandcarefulenquiryof thenewapplicant,thattherearenoother mattersrelatingtothelistingapplicationexceptforthosesetoutinyoursubmission whichoughttobebroughttotheExchange'sattentionpriortoconsideration ofthe application.

1.The business of the Group has been operated under substantially the same managementthroughoutthethreefullfinancialyearscomprisingthetradingrecord periodunderRule8.05 (the"TrackRecordPeriod") andthereafter.

2.Therewasnochangeincontrolintheoperating companiescomprisingtheGroup withintheTrackRecordPeriodandthereafter.

3. TheGroupdidnotconductanyacquisitionormergeractivitiesduringtheTrack

RecordPeriodandthereafter.

4.ThedateofcommencementofbusinessoftheGroupandthedateofincorporation ofthemajorsubsidiariesin theGroup(orits predecessorcompanieswhichcarried on thebusiness) werepriortothecommencementof theTrackRecordPeriod.

5.ThecontrollingshareholdersanddirectorsoftheCompanydonothaveanyinterest inabusinessapartfromtheGroup’sbusinesswhichcompetes orislikelyto compete,directlyorindirectly, withtheGroup'sbusiness,andwouldrequire disclosureunderRule8.10.

6.TheGroupiscapableofcarryingonitsbusiness(es)independentlyof,anddoesnot placeunduerelianceonitscontrollingshareholdersoranyotherparties(takinginto considerationfactorssuchasprovisionofcriticalservices,actingasthemajor

guarantees),ownershipofsignificantassets(e.g.trademarks,operationalrights)

etc.)

7.TheGroupand/oritsshareholdershavenotconductedanyprivateplacingsor transferof shares withinsixmonthspriortothelistingof theCompany.

8.The Group does nothave any outstanding options, warrants, convertible instruments, pre-IPOshareoptionsorsimilarrightsconvertible intosharesofthe Companyafterlisting.

9.TheGroup(includingitspredecessorcompanies)hasobtainedalllicenses,permits orcertificates necessarytoconductitsoperations fromtherelevantgovernmental bodiesinthejurisdictionswheretheGroupoperates,andthattheGroupcomplies withallapplicablelawsandregulationsinalljurisdictionswhereitoperatessince itsestablishment.

10.TheGroup(includingitspredecessorcompanies)hasnotcommittedany offences, violationsor breachesof laws or regulationsinalljurisdictionswhereitoperates.

11.Therearenodefectsinthetitleofanypropertywhichisthesubjectmatterofa valuation report,andthereisnoothermatterrelationtothetitleofanyproperties whichoughttobebroughttotheExchange'sattention.

12.TheAccountants'Report includestheconsolidated resultsoftheCompanyandits subsidiariesfor thethreefullfinancialyearsas requiredunderRule4.04.

13.Therearenoauditqualificationsinanyofthestatutoryaccountsofthecompanies nowcomprisingtheGroupduringtheTrackRecordPeriodandthereafter,andthat theReportingAccountantshaveattendedallyear-endandperiod-endstocktakes.

14.TheGrouphassufficientworkingcapitaltomeetitspresentrequirements,thatis, foratleastthenexttwelvemonthsafterlistingasdemonstratedbyitsworking capitalforecast.

15.RelatedpartytransactionsduringtheTrackRecordPeriodwereconductedonan arm'slengthbasisandareproperlydisclosed intheprospectus,andtheeffectof suchrelated partytransactionswouldnotdistortthetrackrecordtotheextentthat thehistoricalresultsof theGroup arenotreflectiveof itsperformance.

16.TherearenoactualorthreatenedclaimsorlitigationagainsttheGroupwhichcould materiallyaffectitsfinancialposition,andthatthedirectorsoftheCompanyarenot engagedinanylitigation.

Items17 to19 belowrefertoCompanies withoperationsinthePRC

17.TheregisteredcapitalsofallPRCestablishedjointventuresorwhollyforeign ownedentitiesarefullypaidup,andsuchpaymentsweremadewithintherequired timeframe.

18.TheGrouphasobtainedlong-termtitlecertificatesforallitsownedPRCproperties,

andtherearenoissuesrelatingtothetitlesofthepropertieswhichoughttobe broughttotheDivision's attention.

19.ThePRCentitieswithintheGrouphave madealltherequiredtaxfilingsinthePRC, andhavepaidalloutstandingtaxliabilities.

GUIDELINEFORNEWLISTING APPLICATIONS

InstructionsforcompletingtheListingRulechecklists

Pleasefindattachedasetofstandardcheckliststhatsummarisethedisclosureitems requiredbytheListingRulesandsupportinginformationnormallyrequiredinanew listingapplication. Thechecklistsshouldnotbeconsideredexhaustiveandshouldbe tailoredto meettherequirementsof theCompany.Additionalrulesmayberelevantand theseshouldbeaddedtothebottomofthechecklist(s)whereappropriate.Afinalcopyof eachchecklist, signedbytheSponsor(s),willneedtobesubmitted asoneofthefinal documentapprovalitems. Thechecklist(s) submittedfordocumentapprovalshould containthefinaldocumentpagereferencesfor eachrelevantListingRule.

Whencompletingthechecklists,you mustnotethefollowing:-

1.eachrelevantListingRuleinthechecklistsshouldbereferencedtothepage numberinthedocumentwheretheListingRuleiscompliedwith;

2.tokeepthechecklistsasshortaspossible,onlyasmallamountofspacehasbeenset asideforcomments. Iffurther spaceisrequired,pleaseattachaseparate sheetof papertothechecklistandcross-referenceallcommentstotheappropriate Listing Rule;and

3.whereyouranswertoanitemonthechecklistis"No"or"NotApplicable",the reasonforsuchresponseshouldbeclearlydisclosedinthe"Comment"sectionand ifnecessary,onaseparatepagecross-referencedtothechecklist.Wemayrejectan incompleteapplication totheextentthechecklistsarenotproperlycompleted and/orwherenegativeresponses(i.e."No"or"NotApplicable") arenotproperly explained.

Pleasenotethatwewillonlyacceptdocuments forreviewifallrelevantchecklistsare submittedandtheyaresubstantiallycompleteandaccurate.Checklistsmakingreference todisclosureintheprospectusshouldbeupdatedbeforebulkprintingof theprospectus.

Provisionof InformationinconjunctionwiththeNewListingApplication

WewouldadviseeachandeverydirectoroftheCompany,andanyofficer,representative agentsoradvisersoftheCompanysupplyinganyrecordordocumentinconnectionwith thelistingapplicationoftheCompany,thatsuchrecordordocumentistobeprovidedto theExchangeinconnectionwiththeperformance ofitsfunctionsunderthe“relevant provisions”(asdefinedinPart IofSchedule1totheSecuritiesandFuturesOrdinances, Cap571)andislikelytoberelieduponbytheExchange. Inrelation tothis,relevant personsshouldbeawarethatgivinganyrecordordocumentwhichisfalseormisleading inamaterialparticulartotheExchangewillrenderthemliableforprosecution foran offenceundersubsection384(3) of theSecuritiesandFutures Ordinance.

Impersonation

It hascometoournoticethattherehavebeencasesofpersonsimpersonatingexecutives oftheListingDivisionandsolicitingmonetaryorotheradvantagesfromdirectorsof listingapplicantsinconnectionwiththeirlistingapplications.

Westronglyrecommendagainstrespondingtosuchsolicitations. Wewouldstressthat thereisnobasiswhatsoeveronwhichourstaffcouldrequestsuchadvantages. Any listingapplicantwhichis(or,indeed,hasbeen)solicitedinthiswayisurgedtoreportthe matterimmediatelytotheHeadofCorporateCommunications oftheStockExchange (Mr. Henry Law)or theHeadofListingandalsotothepolice.