Vertex Communications & Technology Group Limited
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IMPORTANT If you are in any doubt about this prospectus, you should consult your stockbroker, bank manager, solicitor, professional accountant or other professional adviser. VERTEX COMMUNICATIONS & TECHNOLOGY GROUP LIMITED 慧㶴集團有限公司* (Incorporated in the Cayman Islands with limited liability) LISTING ON THE GROWTH ENTERPRISE MARKET OF THE STOCK EXCHANGE OF HONG KONG LIMITED BY WAY OF PLACING AND PUBLIC OFFER Number of Offer Shares : 123,050,000 Shares (subject to Over-allotment Option) Number of Placing Shares : 86,050,000 Shares (subject to Over-allotment Option and reallocation) Number of Public Offer Shares : 37,000,000 Shares (subject to reallocation) Offer Price Range : Not more than HK$0.8 per Share and no less than HK$0.6 per Share Nominal value : HK$ 0.01 each GEM stock code : 8228 Sponsor Kingsway Capital Limited Lead Manager Kingsway SW Securities Limited Co-Lead Manager Hani Securities (H.K.) Limited Co-Managers Celestial Capital Limited First Shanghai Securities Limited Shun Loong Securities Company Limited The Stock Exchange of Hong Kong Limited and Hong Kong Securities Clearing Company Limited take no responsibility for the contents of this prospectus, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this prospectus. A copy of this prospectus, having attached thereto the documents specified in the paragraph headed “Documents delivered to the Registrar of Companies” in Appendix VI to this prospectus, has been registered by the Registrar of Companies in Hong Kong as required under Section 342C of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong). The Securities and Futures Commission and the Registrar of Companies in Hong Kong take no responsibility as to the contents of this prospectus or any other documents referred to above. Prospective investors of the Offer Shares should note that Kingsway SW Securities has the absolute right upon giving a notice in writing to the Company to terminate the Underwriting Agreement upon the occurrence of any of the events set forth under the paragraph headed “Grounds for termination” in the section headed “Underwriting” in this prospectus at any time prior to 5:00 p.m. (Hong Kong time) on the business day prior to the Listing Date. Such events include, but without limitation, any act of God, war, riot, public disorder, civil commotion, fire, flood, explosion, epidemic terrorism, terrorist strike, future terrorist strike or act of terrorism anywhere in the world, strike or lockout. The Offer Price is expected to be fixed on or before 6th August, 2002, by agreement between Kingsway SW Securities (on behalf of the Underwriters) and the Company with reference to market demand for the Shares and will not be more than HK$0.8 per Share and will not be less than HK$0.6 per Share. If Kingsway SW Securities (on behalf of the Underwriters) and the Company are unable to reach agreement on the Offer Price on or before 6th August, 2002, the Share Offer will not proceed. An announcement of the Offer Price will be published in the South China Morning Post (in English) and the Hong Kong Economic Journal (in Chinese) and on the GEM website on or before 14th August, 2002. * For identification purposes only 30th July, 2002 CHARACTERISTICS OF GEM GEM has been established as a market designed to accommodate companies to which a high investment risk may be attached. In particular, companies may list on GEM with neither a track record of profitability nor any obligation to forecast future profitability. Furthermore, there may be risks arising out of the emerging nature of companies listed on GEM and the business sectors or countries in which the companies operate. Prospective investors should be aware of the potential risks of investing in such companies and should make the decision to invest only after due and careful consideration. The greater risk profile and other characteristics of GEM mean that it is a market more suited to professional and other sophisticated investors. Given the emerging nature of companies listed on GEM, there is a risk that securities traded on GEM may be more susceptible to high market volatility than securities traded on the Main Board and no assurance is given that there will be a liquid market in the securities traded on GEM. The principal means of information dissemination on GEM is publication on the Internet website operated by the Stock Exchange. GEM-listed companies are not generally required to issue paid announcements in gazetted newspapers. Accordingly, prospective investors should note that they need to have access to the GEM website in order to obtain up-to-date information on GEM-listed issuers. – i – EXPECTED TIMETABLE 2002 (Note 1) Application lists open (Note 2) . 11:45 a.m. on Friday, 2nd August Latest time to lodge WHITE and YELLOW application forms . 12:00 noon on Friday, 2nd August Application lists close . 12:00 noon on Friday, 2nd August Price Determination Date on or before (Note 3) . Tuesday, 6th August Allotment of Offer Shares on or before . Wednesday, 14th August Announcement of the Offer Price, the level of interests in the Placing, the results of applications and the basis of allotment of the Public Offer Shares and the number of Shares, if any, reallocated between the Placing and the Public Offer and the identification numbers of successful applicants in the Public Offer to be published in South China Morning Post (in English) and Hong Kong Economic Journal (in Chinese) and on the GEM website at www.hkgem.com on or before . Wednesday, 14th August Despatch/collection of share certificates and refund cheques in respect of wholly or partially unsuccessful applications on or before (Notes 4 to 6) . Wednesday, 14th August Deposit of share certificates into CCASS on or before . Wednesday, 14th August Dealings in the Shares on GEM commence on . Thursday, 15th August Notes: 1. All dates and times refer to Hong Kong local time. 2. If there is a “black” rainstorm signal warning or a tropical cyclone warning signal number 8 or above in force in Hong Kong at any time between 9:00 a.m. and 12:00 noon on Friday, 2nd August, 2002, the application lists will not open on that day. Further information is set out in the paragraph headed “Effect of bad weather on the opening of the application lists” under the section headed “How to apply for Public Offer Shares” in this prospectus. 3. The Price Determination Date is expected to be on or before Tuesday, 6th August, 2002. If, for any reason, the Offer Price is not agreed on or before 6th August, 2002, the Share Offer will not proceed. 4. Applicants who apply on WHITE application forms for 2,000,000 Shares or more under the Public Offer may, by indicating in their application forms that they wish to collect refund cheques (where applicable) and/or share certificates in person, collect them in person from the Company’s branch share registrar, Secretaries Limited, from 9:00 a.m. to 1:00 p.m. on 14th August, 2002. Identification and (where applicable) authorisation documents acceptable to Secretaries Limited must be produced at the time of collection. – ii – EXPECTED TIMETABLE 5. Applicants who apply on YELLOW application forms for 2,000,000 Shares or more under the Public Offer may collect their refund cheques, if any, in person but may not elect to collect their share certificates, which will be deposited into CCASS for credit to their designated CCASS participants’ stock accounts or CCASS investor participant stock accounts, as appropriate. The procedure for collection of refund cheques for YELLOW application form applicants is the same as those for WHITE application form applicants. 6. Uncollected share certificates and/or refund cheques will be despatched by ordinary post at the applicants’ own risk to the addresses specified in the relevant application forms. Further information is set out in the paragraph headed “Collection/posting of share certificates/refund cheques and deposit of share certificates into CCASS” under the section headed “How to apply for Public Offer Shares” in this prospectus. 7. If there is any change to the above expected timetable after the date of this prospectus, the Company will make an appropriate announcement to inform investors. For details of the conditions of the Share Offer, please refer to the section headed “Structure and conditions of the Share Offer” in this prospectus. – iii – CONTENTS You should rely only on the information contained in this prospectus and the application forms to make your investment decision. The Company has not authorised anyone to provide you with information that is different from what is contained in this prospectus and the application forms. Any information or representation not made in this prospectus must not be relied on by you as having been authorised by the Company, the Sponsor, the Underwriters, any of their respective directors or any other person involved in the Share Offer. Page CHARACTERISTICS OF GEM . i EXPECTED TIMETABLE . ii SUMMARY . 1 DEFINITIONS . 26 GLOSSARY . 38 RISK FACTORS . 44 WAIVER FROM COMPLIANCE WITH THE GEM LISTING RULES . 61 INFORMATION ABOUT THIS PROSPECTUS AND THE SHARE OFFER . 62 DIRECTORS AND PARTIES INVOLVED IN THE SHARE OFFER . 65 CORPORATE INFORMATION . 69 INDUSTRY OVERVIEW . 71 BUSINESS Group and shareholding structure . 81 History and development . 85 Statement of active business pursuits . 87 Description of business . 89 Revenue model . 104 – iv – CONTENTS Page Strategic alliances . 106 Strengths of the Group . 111 Sales and marketing . 113 Research and development . 114 After-sales service and technical support . 114 Procurement . 116 Largest customers and suppliers . 116 Competition .