Core Viewpoint - The article emphasizes the importance of thorough due diligence in the Hong Kong IPO process, highlighting key operational points to avoid pitfalls during the due diligence phase. Group 1: Third-Party Interviews - Third-party interviews are a crucial part of investment banking due diligence, typically led by investment banks in collaboration with auditors, sponsors, and legal advisors to conduct face-to-face interviews with clients, suppliers, and banks [2] - Client interviews should cover major clients across different sales models to ensure a comprehensive coverage rate [3] - Supplier interviews should be stratified to ensure coverage across different supplier categories [4] - Bank interviews should be selected based on a certain proportion of banks according to their deposit and loan balances [5] Group 2: Management and Internal Control Due Diligence - Management due diligence involves interviews with company management to understand business models, operational status, and internal control management [7] - Internal control assessments are conducted by third-party consultants who provide reports on internal control risks, which investment banks follow up on to ensure all major deficiencies are rectified before listing [7] Group 3: Financial Due Diligence - Financial due diligence involves discussions on performance indicators to analyze the reasons behind financial metric changes during the reporting period [9] - The process includes verifying company data against audit reports to ensure consistency [10] - Building financial models is essential for understanding business operations and future growth drivers, requiring historical performance as a baseline [11] - Valuation analysis is a key component, often using discounted cash flow models and comparable company metrics for comprehensive evaluation [11] Group 4: Legal Due Diligence - Legal due diligence focuses on identifying non-compliance issues that could impact the IPO, such as safety incidents or incomplete business licenses [18] - Independent background checks are conducted on the company, shareholders, and major clients to uncover any significant litigation or penalties [18] - Compliance letters from relevant authorities are required during the IPO process to confirm adherence to regulations [18] Group 5: Course and Learning Opportunities - The article promotes a course titled "Hong Kong IPO Investment Banking Due Diligence and Review Practices," which reviews seven classic failed IPO cases and shares practical due diligence techniques [16] - The course covers various aspects of due diligence, including legal, financial, and business investigations, and emphasizes the importance of collaboration among different parties involved [17]