25 Apr 2023

Partner Gordon Tsang Lecturer for LexOmnibus’s “Rules and Regulations on IPOs and Updates on SPACs” CPD Webinar

On 20 April 2023, our Partner Gordon Tsang and Associate Ben Chan were invited by LexOmnibus to give a CPD course on “Rules and Regulations on IPOs and Updates on Special Purpose Acquisition Companies (SPACs)”.

During the 3-hour webinar, Gordon and Ben gave a comprehensive introduction to the rules and practice of Hong Kong’s IPO market by sharing the latest updates on listing requirements, the reorganization of Red-Chips listing, H-shares listing, trust arrangements, and VIE structures. They also provided a summary on the listing rules in relation to SPACs and discussed the advantages and potential risks of Hong Kong SPAC listing.

Please contact Mr. Gordon Tsang for any enquiries or further information.

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24 Apr 2023

Stevenson, Wong & Co. acted for Neijiang Investment Holding Group Co., Ltd. on its successful issuance of CNY$300 million 6% Free Trade Zone Bonds due in 2026

Stevenson, Wong & Co. acted for Neijiang Investment Holding Group Co., Ltd. (the “Issuer”) in its successful issuance of CNY$300 million 6% bonds due in 2026 (the “Bonds”). The Bonds were issued in the China (Shanghai) Pilot Free Trade Zone and are cleared through the China Central Depository & Clearing Co., Ltd.

The Issuer is a state-owned enterprise 90% owned by the State-owned Assets Supervision and Administration Commission of Neijiang Municipal Government and 10% owned by Sichuan Provincial Department of Finance. It is the major investment and financing entity of the development and construction in Neijiang City.

Donghai International Securities (Hong Kong) Limited acted as the sole global coordinator, joint lead managers and joint bookrunners. China Zheshang Bank Co., Ltd. (Hong Kong Branch) and Zhongtai International Securities Limited acted as the joint lead managers and joint bookrunners.

Our team was led by our Partner Mr. Rodney Teoh, supported by team members including Associates Ms. Angela Lau, Ms. Audrey Ng, Trainee Solicitor Mr. Austin Kot and Paralegal Mr. Gabriel Yu.

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21 Apr 2023

(中文) 本所出席锦天城东京办公室开业典礼

(中文) 2023年3月31日, 本所合伙人郑炎潘律师﹑劳恒晃律师﹑徐凯怡律师﹑张源辉律师﹑洪玉晖律师和许懿律师, 出席了于东京帝国饭店举行的锦天城东京办公室开业典礼。

左起: 本所合伙人洪玉晖律师﹑劳恒晃律师﹑郑炎潘律师﹑张源辉律师﹑许懿律师和徐凯怡律师

本次开业典礼邀请了多位嘉宾出席，其中包括中国驻日本国大使馆施泳公使﹑日本众议院副议长（原经产省大臣）海江田万里先生﹑锦天城主任顾功耘先生﹑第二东京律师协会菅沼友子会长﹑上海市律师协会会长季诺先生﹑锦天城高级合伙人章晓洪博士﹑锦天城东京办公室首席代表、高级合伙人裘索博士﹑以及上海市律师协会副会长、锦天城高级合伙人朱林海律师致辞祝贺。

锦天城东京办公室的隆重开业标志着继伦敦、西雅图、新加坡办公室后，锦天城正式开设的第四家海外办公室。本所在此向锦天城东京办公室致以热烈的祝贺，并期待未来与锦天城通过更紧密地合作，共同推进法律服务的创新与发展，为客户提供更优质、更全面的法律服务。

如有任何查询，请联络本所合伙人郑炎潘律师。

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19 Apr 2023

THE HONG KONG STOCK EXCHANGE PUBLISHED THE CONSULTATION PAPER ON ENHANCEMENT OF CLIMATE DISCLOSURE UNDER ITS ESG FRAMEWORK

On 14 April 2023, The Stock Exchange of Hong Kong Limited (the “Hong Kong Stock Exchange”) published the consultation paper (the “Consultation Paper”) seeking public feedback on the proposed enhancement of climate-related disclosures under the environmental, social and governance (“ESG”) framework. The public consultation period (the “Consultation Period”) will end on 14 July 2023.

Subject to responses during the Consultation Period, the revised ESG Reporting Guide (the “ESG Reporting Guide”) set out in Appendix 27 (“Appendix 27”) to the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (“Listing Rules”) will come into effect on 1 January 2024 (the “Effective Date”), and apply to ESG reports in respect of financial years commencing on or after the Effective Date.

Key Proposals

As an update from the current “comply or explain” mechanism for climate-related disclosures in ESG reports, the new climate-related disclosures based on the ISSB Climate Standard ¹ will be introduced as a new Part D of Appendix 27. These disclosures will be categorised under four core pillars, namely Governance, Strategy, Risk management and Metrics and Targets. The key proposed disclosures are set out in the table below, including interim provisions for an issuer’s first and second reporting periods following the Effective Date (the “Interim Period”).

Key proposed disclosures	Key proposed disclosures for the Interim Period
A. Governance
Disclose the issuer’s governance process, controls and procedures used to monitor and manage climate-related risks and opportunities, including: (1) the identity of any board committee or board members responsible for oversight of climate-related risks and opportunities; (2) how the board ensures that the appropriate skills and competencies are available to oversee strategies designed to respond to climate-related risks and opportunities; (3) how and how often the board and its committees are informed about climate-related risks and opportunities; and (4) a description of management’s role in assessing and managing climate-related risks and opportunities, including (i) the scope of climate-related responsibilities and duties performed by management-level position(s) or committee(s); (ii) how the board’s oversight is exercised over such management-level position or committee; and (iii) whether dedicated controls and procedures are applied to the issuer’s management of climate-related risks and opportunities.	Not applicable.
B. Strategy
Climate-related risks and opportunities
Disclose climate-related risks and, where applicable, opportunities faced by the issuer and their impact on the issuer’s business operations, business model and strategy, including: (1) description of each of climate-related risks identified and the time horizon over which each could reasonably be expected to have a material effect on the issuer; (2) the method for the issuer to define short, medium and long term and how they are linked to the issuer’s strategic planning horizons and capital allocation plans; and (3) current and anticipated effects of any climate-related risks identified on the issuer’s business operations, business model and strategy, products or services and/or suppliers and other parties in its value chain.	Not applicable.
Transition plans
Disclose issuer’s response to the climate-related risks and, where applicable, opportunities identified in B. Strategy above, including: (1) any current or anticipated changes to the issuer’s business model, strategy and resource allocation to address climate-related risks and opportunities identified; (2) any adaptation and mitigation efforts (direct or indirect) undertaken or to be undertaken by the issuer; (3) how the aforementioned plans will be resources; (4) information in respect of any climate-related targets the issuer has set and any greenhouse gas (GHG) emission targets the issuer is required to meet by local legislation such as specific target set by the issuer for addressing climate related risks and opportunities, scope and objective of the target, base period from which progress is measured and any milestones or interim targets; and (5) comparison of the progress made in the most recent reporting year in respect of plans disclosed above.	Not applicable.
Climate resilience
Disclose information that enables investors to understand resilience of the issuer’s strategy (including its business model) and operations to climate-related changes, developments or uncertainties, including: (1) the extent assets and business activities at risk covered by the issuer’s strategy, mitigation actions, implications of the issuer’s findings for its strategy and the significant areas of uncertainty considered in the analysis of climate resilience; and (2) description of the climate-related scenario analysis used to assess the effect of climate-related risks, opportunities on the issuer’s business model, strategy and cash flows, access to finance and its cost of capital including inputs used in the analysis and how the analysis has been conducted.	Not applicable.
Financial effects of climate-related risks and opportunities
Disclose the current (quantitative where material) and anticipated (qualitative) financial effects of climate-related risks and opportunities on the issuer’s financial position, financial performance and cash flows; For current financial effect: (1) description of effect of climate-related risks and opportunities identified on the issuer’s financial position, financial performance and cash flows for the most recent reporting period; and (2) description of whether and how much risks and opportunities may result in a material adjustment to the carrying amount of assets and liabilities reported in the financial statements within the next financial year. For anticipated financial effect: (1) how the issuer expects its financial performance to change over the short, medium and long term (and how the issuer defines them), considering its strategy to address significant climate-related risks and opportunities; and (2) how the issuer expects its financial position to change over the short, medium and long term, considering funds (e.g. capital expenditure, R&D expenditure) required to pursue its current and committed plans and its planned sources of funding to implement its strategy to address significant climate-related risks and opportunities; and	For current financial effect: (1) allow qualitative disclosures. For anticipated financial effect: (1) information that enables investors to understand the aspects of financial statements that are most affected; and (2) work plan, progress and timetable for full disclosure.
C. Risk Management
Disclose the process the issuer used to identify, assess and manage climate-related risks (and opportunities), including: (1) how the issuer assesses the likelihood and effects associated with such risks (such as qualitative factors, quantitative thresholds and other criteria used); (2) how the issuer prioritises climate-related risks relative to other types of risks, including its use of risk-assessment tools; and (3) how the issuer monitors and manages its climate related risks.	Not applicable.
D. Metrics and Targets
Greenhouse gas (GHG) emissions
Disclose: (1) absolute gross GHG emissions generated during the reporting period, expressed as metric tons of CO2 equivalent, classified as scope 1 emissions, scope 2 emissions and scope 3 emissions; and (2) information in relation to GHG emissions including a statement describing the standard in accordance with which the issuer’s GHS emissions have been measure, the GHG emissions consolidation approach used and a summary of specific exclusion of sources, facilities and/or operations with a justification for their exclusion.	For Scope 3 emissions: (1) information that enables investors to understand the issuer’s relevant upstream or downstream activities along the value chain; and (2) work plan, progress and timetable for full disclosure.
Other cross-industry metrics
Transition risks
The amount and percentage of assets or business activities vulnerable to transition risk.	For issuers who have yet to provide quantitative disclosure: (1) description of the assets or business activities identified to be vulnerable to transition risk with the location, nature of asset/business activity and the transition risk involved; and (2) disclosure of the work plan, progress and timetable for making the required disclosure.
Physical risks
The amount and percentage of assets or business activities vulnerable to physical risk.	For issuers who have yet to provide quantitative disclosure: (1) description of the assets or business activities identified to be vulnerable to physical risk with the location, nature of asset/business and the physical risk involved; and (2) disclosure of the work plan, progress and timetable for making the required disclosure.
Climate-related opportunities
The amount of capital expenditure, financing or investment deployed towards climate-relate risks and opportunities.	For issuers who have yet to provide quantitative disclosure: (1) description of the assets or business activities identified to be aligned with climate-related opportunities with the location, nature of the asset/business activity and the opportunity involved; and (2) disclosure of the work plan, progress and timetable for making the required disclosure.
Capital deployment
The amount of capital expenditure, financing or investment deployed towards climate-relate risks and opportunities.	For issuers who have yet to provide quantitative disclosure: (1) description of the types of activities requiring capital expenditure, financing or investment towards climate-related risks and opportunities; and (2) disclosure of the work plan, progress and timetable for making the required disclosure.
Internal carbon prices
For issuers who maintain an internal carbon price: (1) the price for each metric tonne of GHG emissions that that the issuer uses to assess the costs of its emissions; and (2) an explanation of how the issuer is applying the carbon price in decision-making (for example, investment decisions, transfer pricing and scenario analysis).	Not applicable.
Remuneration
Description of how climate-related considerations are factored into remuneration policy.	Not applicable.
Industry-based metrics
Issuers are encouraged to consider the industry-based disclosure requirements prescribed under other international ESG reporting frameworks such as the SASB Standards ² and the GRI Standards³ , and make disclosures as they see fit.	Not applicable.

Analysis and Takeaways

Recently, thematic investment has become a popular trend and ESG investment is undeniably one of the major investing themes among investors, shareholders and other stakeholders. The Hong Kong Stock Exchange also notes the importance of promoting high standards of ESG practice and disclosure, and has incorporated certain elements of the Recommendations of the Task Force on Climate-related Financial Disclosures (“TFCD“) in the ESG reporting requirements that became effective in July 2020. In November 2021, the Hong Kong Stock Exchange further published a Guidance on Climate Disclosure to promote TCFD-aligned climate change disclosures.

While the Hong Kong Stock Exchange aims to keep up with international developments, it should also take into account the particular circumstances of the Hong Kong market when formulating the ESG reporting framework. The diversified business profile, specialised industry sectors and operating locations of Hong Kong-listed issuers, as well as their applicable laws and regulations, are all key concerns that the Hong Kong Stock Exchange should take into consideration.

In the future, it is expected that ESG and corporate governance matters would continue to be the key focus of the Hong Kong Stock Exchange. The Hong Kong Stock Exchange should also provide more guidance or training to cater for different levels of sophistication for ESG matters of the issuers. The Hong Kong Stock Exchange also encouraged issuers to visit its ESG educational platform, ESG Academy, for guidance materials. Issuers are advised to seek professional support for ESG advisory and reporting to meet the increasingly stringent and granular ESG requirements.

Please contact our Partner Mr. Rodney Teoh for any enquiries or further information.

This news update is for information purposes only. Its content does not constitute legal advice and should not be treated as such. Stevenson, Wong & Co. will not be liable to you in respect of any special, indirect or consequential loss or damage arising from or in connection with any decision made, action or inaction taken in reliance on the information set out herein.

¹ The IFRS S2 Climate-related Disclosures Exposure Draft, as supplemented or modified by deliberations of the ISSB available on https://www.ifrs.org/news-and-events/updates/issb.

² A set of industry-based standards that guide the disclosure of financially material sustainability information by companies to their investors. Effective from 1 August 2022, the SASB Standards are under the oversight of the ISSB.

³ A set of interrelated sustainability reporting standards that enable organisations to report publicly on their economic, environmental and social impacts and contribution towards sustainable development developed by the Global Sustainability Standards Board of the GRI.

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5 Apr 2023

Stevenson, Wong & Co. advised Millennium Group International Holdings Limited(NASDAQ: MGIH) on its successful listing on the Nasdaq Capital Market

Stevenson, Wong & Co. acted as the Hong Kong legal advisers to Revere Securities, LLC, the underwriter of Millennium Group International Holdings Limited (NASDAQ: MGIH) (“Millennium Group”) in their successful listing on the Nasdaq Capital Market on 4 April 2023. Millennium Group offered a total of 1,250,000 Ordinary Shares, priced at US$4.00 per share. The aggregate gross proceeds from the Offering was US$5 million.

Founded in 1978, Millennium Group is a long-established paper packaging solutions provider. Headquartered in Hong Kong, Millennium Group has two production facilities in Guangdong, China and a supply chain management office in Vietnam to provide their global clients with packaging solutions from Vietnam and other ASEAN countries.

Our Partners, Mr. Hank Lo and Mr. Gordon Tsang, together with Associate Mr. Bun Chan, acted as the Hong Kong legal counsel for the underwriter in the Nasdaq Listing.

Please contact Mr. Hank Lo or Mr. Gordon Tsang for any enquiries or further information about this transaction.

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3 Apr 2023

Senior Associate Terence Lau Appointed to the Appeal Panel (Housing)

Our Senior Associate Terence Lau has been appointed by the Government of the Hong Kong Special Administrative Region as a member of the Appeal Panel (Housing) with effect from 1 April 2023 for a term of two years.

The Appeal Panel (Housing) is established under section 7A of the Housing Ordinance (Cap. 283) to determine appeals lodged by tenants against the termination of leases by the Hong Kong Housing Authority. For more information on the Appeal Panel (Housing), please see here.

Terence specialises in corporate finance law and has been advising listed issuers, sponsors and/or underwriters in a broad range of transactions, including initial public offering on The Stock Exchange of Hong Kong Limited, general offer and regulatory and compliance matters. Terence is also a panel solicitor of the Free Legal Advice Service on Building Management under the Home Affairs Department and a member of the Membership & Corporate Affairs Committee of the Hong Kong Tennis Association.

For more information, please contact Terence Lau at terence.lau@sw-hk.com.

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