investors will ask this question: it is relatively easier and cheaper to get debt/bank financing in China, why bother to go overseas as a public company listed in US? In post-SOX world, it means more legal risk and higher professional fees. All fees together can easily takes away 10% of the IPO money. Why finance with USD? There is currency risk here and one may face foreign exchange restriction from the gov.
One quick conclusion: this firm is kind of desperate to get cash to lower leverage for SURVIVAL.
I audited one Chinese firm before for NYSE listing and I knew what a big hassle it is for the domestic firm. The mere translation of various documents and the preparation of a thick prospectus takes away a lot of working time for executives.
To be frank, I am not confident in firms from HeiNan. I am not confident in the trustworthiness of the books of real estate firms in China.
Tell me how to hide your huge gov bribery in your book? Any Big 4 CPA will ask you. That is a huge internal control deficiency.
One big 4 in Beijing has completely avoid clients from the whole real estate developer sector.
