Underwriters of the Hong Kong IPOs tend to dictate the choice of PRC firms. So having a designated Hong Kong firm on its side gives Zhonglun W&D more autonomy, and allows it to proactively seek PRC issuers interested in listings across the border, Lin points out.

Besides, partnering with a leading Hong Kong firm in the capital market offers quality assurance to the transactions: P.C. Woo’s senior partner Moses Cheng currently serves as a director on the board of HKEx and has extensive experience in IPO matters.

More foreign issuers to come

With relatively high liquidity and backed by China’s strong growth, HKEx has continued to attract headline-grabbing listings of foreign issuers of the likes of AIA, L’Occitane and Samsonite since 2010.

In the past year, seven international companies were floated at HKEx, including Glencore International’s mega dual listings in Hong Kong and London to raise HK$77.7 billion ($10.3 billion). The bourse has also welcomed the first listings of companies from Japan, Italy and the U.S. The companies are SBI Holdings, Prada, and Coach Inc. respectively.

Many of these foreign issuers have listed at HKEx via Hong Kong depositary receipts (HDRs) in “listings by introduction” in which no capital is raised. The issuer remains poised for future fund raisings and the listing can also be a valuable marketing tool to raise their brand awareness among Asian investors.

Having acted on three HDRs issued by companies such as Brazilian mining giant Vale SA, SBI and Coach last year, Neil Torpey, Paul Hastings’ Hong Kong-based chair and partner, says his firm is fielding many inquiries from overseas clients who are interested in following suit.

Another developing trend, Torpey says, is Asia-based U.S.-listed companies looking to return their listing and trading activity to Hong Kong without undertaking a costly, potentially controversial “take private” transaction in the U.S. “The managements of these companies often consider getting a secondary listing in Hong Kong, and then gradually migrating the trading of their shares (from their primary listing exchange) to Hong Kong,” he explains.

One of the much talked about offerings is the debut of Coach’s HDRs in December 2011. It paved the way for other U.S. companies who are keen on tapping into China’s vast consumer market via Hong Kong. The landmark rollout of the American handbag retailer’s HDRs cleared many regulatory hurdles as it went ahead without the need to register the securities with the SEC.

Coach was advised by Fried Frank, and Paul Hastings served as the counsel for its sponsor J.P. Morgan in this transaction.

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