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Modern Investment Banking(六版) 謝劍平 著 ISBN 978-

957-511-959-1

Chapter 2 Domestic Underwriting

Modern Investment Banking(六版) 謝劍平 著 ISBN 978-
957-511-959-1

Chapter Outline
❑ 2.1 Role and Function of Underwriters
❑ 2.2 Underwriting Business and Underwriting Methods
❑ 2.3 Underwriting Procedures
❑ 2.4 Conclusion: Future trends in underwriting
Modern Investment Banking(六版) 謝劍平 著 ISBN 978-
957-511-959-1

Table 2.1 Overview of Funding Sources of

Taiwan Enterprises (2/2)
Overview of Financing of Listed (OTC) Companies
2016 2017 2018 2019 2020
Total proportio Total proporti Total proporti Total proporti Total proport
numbe n numbe on numbe on numbe on numbe ion
r of r of r of r of r of
pieces pieces pieces pieces pieces
General 23.92% 24.04% 21.45% 20.16% 34.54%
Corporate
Debt

Conversio 347 366 387 387 443

19.88% 16.67% 16.80% 25.58% 20.99%
n

Domest Cash Capital 23.92% 26.78% 28.94% 19.12% 21.67%

ic Increase

private 16.14% 21.58% 17.31% 9.04% 16.93%

placement
 (in share
dealing)

IPO 16.14% 10.93% 15.50% 26.10% 5.87%

Overseas 100.00% 28.57% 50.00% 25.00% 62.50%

oversea 6 7 6 4 8
Corporate
s
Debt

DR 0.00% 71.43% 50.00% 75.00% 37.50%

Source: Financial Market Statistics Information System of the FSC.

Modern Investment Banking(六版) 謝劍平 著 ISBN 978-
957-511-959-1

Table 2.2 Listing Requirements for Taiwan

Depositary Receipts (TDRs)
(as of 2020)
Business like Technology/Agricultural
Technology
Established More than 3 years of business record More than 1 year of business record

years
Company Size Paid-in capital or net worth of $600 million Paid-in capital or net worth of $300 million or
or market capitalization of $1.6 billion market capitalization of $800 million
� Type 1: General Conditions of The net value of the most recent financial
Profitability report certified by an accountant is not less
� Net income before tax for the last than 2/3 of the share capital, and there must
Profitabil three fiscal years totaled 2.5 percent. be sufficient working capital for 12 months
ity and Net income before income tax of after listing.
others $120 million or more for the most
recent fiscal year with no
accumulated losses.
� Type II: Those with a market

capitalization of NT$5 billion or more.

Compliance with revenue/cash flow/net
worth criteria
� Type III: Those with a market

capitalization of NT$6 billion or more.

Compliance with revenue/net worth
 criteria

1,000 or more registered shareholders, and 500 or more registered shareholders,

Diversification not less than 500 registered excluding corporate shareholders with
shareholders other than corporate more than 50% of shares held by
of shareholders holding more than 50% of insiders, whose shares in aggregate
the shares by insiders, and the total account for more than 20% of the total
shareholding number of shares held by such number of issued shares or 500 shares.
shareholders reaches 20% of the issued
shares or more than 10 million shares.
1. The Board of Directors shall consist of no fewer than five members, and shall have no
fewer than three independent directors and no fewer than one-fifth of the number of
corporate seats on the Board, of which at least one of the independent directors shall be domiciled
in the Republic of China.
governance 2. The qualifications of independent directors, restrictions on shareholdings and concurrent
positions, and the recognition of independence shall be governed by the Securities Act of
the Republic of China.
3. The number of members of the remuneration committee shall not be less than three, and
the qualifications of the members and the exercise of their powers and functions shall be
in accordance with the Securities Laws and Regulations of the Republic of China.

Source: 2020 First Listing Brochure for Foreign Companies, Taiwan Stock Exchange.
Modern Investment Banking(六版) 謝劍平 著 ISBN 978-

957-511-959-1

Figure 2.2 TDR issuance and listing process

Mr. Maki, the issuer of
the listing application,
applied to the
Exchange.

Issuer Apply to
the China
Snail Service
Bank with an
application
form

12

Letter of concurrence from China Snail Trout NON

The issuer applies to the SFC for a

supplemental issue of video monitors and Wang Jin Jin 7

or

Within 3 El of completion of contracting

Modern Investment Banking(六版) 謝劍平 著 ISBN 978-
957-511-959-1

Table 2.3 Overview of TDR Issuance in Taiwan

since 2009
(1/2)
Code Name Recognition of Launch date delisting date
Original Market
Shares
910069 new picture 3 2011/10/5 2015/5/13
9101 Foraiden 0.01 1998/1/8 2008/7/14
9102 EAST ASIACO 2 2001/4/25 2011/1/17
9103 Medi-Med-DR 1 2002/12/13
910322 Master Kang-DR 0.5 2009/12/16
9104 WAN YU KE 1 2003/1/20 2012/8/28
910482 St. Martin DR 1 2009/12/18 2020/6/15
9105 Tai Jinbao-DR 1 2003/9/22
910579 O'Shaughnessy 1 2009/12/31 2013/7/30
9106 New Focus-DR 1 2009/10/12 2017/6/27
910708 Everest Health-DR 5 2011/7/19 2019/6/10
910801 Goldwell-DR 2 2011/1/24 2017/12/13
910861 Shenzhou-DR 0.5 2010/11/24
910948 Ronda 1 2010/12/3 2015/3/1
9110 Vietnam Control-DR 2 2009/12/3
911201 OCW Controls 1 2010/2/4 2014/12/30
911602 Wah Fung Tai 6 2010/2/8 2013/12/3
911606 superlative 0.5 2010/9/9 2012/11/6
Modern Investment Banking(六版) 謝劍平 著 ISBN 978-
957-511-959-1

Table 2.3 Overview of TDR Issuance in Taiwan

since 2009
(2/2)
Code Name Recognition of Launch date delisting date
Original Market
Shares
911608 Ming Fai-DR 0.5 2010/10/20
911609 Yangtse River 0.5 2010/9/8 2015/6/17
911610 Union Ring 1.25 2010/10/22 2014/1/28
911611 Zhongtai Shan-DR 0.1 2010/10/6 2016/11/29
911612 Shanghainese 1.25 2010/10/28 2016/1/26
911613 Special Art-DR 0.5 2011/2/25 2021/9/3
911616 Dukang-DR 1 2011/3/9 2021/8/31
911619 Yiu Kit-DR 3 2011/6/24 2019/8/19
911622 Taijuhang-DR 2 2011/9/29
911626 MSH-DR 3 2011/12/30 2016/11/1
911868 Tongfang Youyou- 0.5 2009/12/22
DR
912000 Morningside News- 2 2011/4/25
DR
912398 Yoga-DR 1 2010/3/18
9136 Ju Teng - DR 1 2009/5/25
913889 dacheng sugar 2 2010/3/25 2015/12/29
9151 (onom.) booming 1 2009/4/28 2013/10/15
9157 Sunshine Energy- 1 2009/12/11 2019/11/12
 DR
916665 Elpida 0.05 2011/2/25 2012/3/28
9188 Seikhee-DR 1 2009/10/8

Source: TEJ Taiwan Economic Newswire database and compiled by the author of this book.
 Modern Investment Banking(六版) 謝劍平 著 ISBN 978-

957-511-959-1

Table 2.4 Criteria for examination of the first

listing of the radio station

The c o m p a n y ' s appointment. According to the law,

there are 3 years, 2 years, 1 year, 1 year, and 1 year.
Above Tenth year Woods

Huangshintai
16 letters or
more Not subject to]
the ability of
The former benefit of Kritsky's new station, the the general
former benefit of Zeus. public
In addition to the NT$2.5 to NT$400 apartments and above, the recent report on
the floating of the NT$2.5 to NT$400 apartments is also a good example.
and the proportion of the share capital of such shareholders in the capital of
such shareholders for the last five years shall not be less than the proportion of
the share capital of such shareholders. not less than the share capital
The following benefits have been realized by the end of the year. 2/,3 and must be demonstrated to have sufficient
Kui NT$ L2 stiff recently In the
past few years, Huangshi has contributed 4% of
the total amount of the listed company's shares
 to the market, and the company's share of the
listed company's shares has been reduced by 4%.
4% of the total amount of the
shares of the Company, and the Company's share
in the total amount of the shares
of the Company.
擅。2.最近2年度均 燕面 或每股面
逵 3% 或卒均湮 非 新台俘…元的
3%，且最近l年度 外圃噩行人，其滓
年度焉佳 Not less than the
capital plus
The Ten Dongs of
Benjamin
Tan_The
Harmonizatio
n of Bad News
and the Three
Points of the
Divided City
Modern Investment Banking(六版) 謝劍平 著 ISBN 978-

957-511-959-1

Figure 2.3 Application and Listing Timeline for

Initial Listing in Taiwan

2 Halt Industry H

Chinese Invitation
"I've got to get
Application Potato

back to I've got a daylily.

the
office."
= Exchange Centralized
Zhaoxing Bank I12
first (of two)
Individual
 Terms and
Conditions Sell 2 sharecroppers
Date of Listng business day
Listing Date
 Table 2.5 Comparison of Underwriting
Methods

_ shu specific person jiaxing line ' private solicitation _ _

fertilize Public collection
"m2- Undertake
Mm Sub Function
mountain
peak

Collection of heirs _ Function

Xigui _.
WW b white seal W afraid of white. com.tw '_D' "
Modern Investment Banking(六版) 謝劍平 著 ISBN 978-

957-511-959-1

Figure 2.5 Procedures for Auction Processing

(All by competitive bidding)

9 10 13 days 14 Axiomaticremaininpartofheg
days
plicatonfrhe eyeballallocation
for
sale
float rigid release
Modern Investment Banking(六版) 謝劍平 著 ISBN 978-
957-511-959-1

Innovative Version
❑ https://www.twse.com.tw/TIB/zh/requirement.html
Modern Investment Banking(六版) 謝劍平 著 ISBN 978-
957-511-959-1

Tactical New Edition

❑ See slides