1. The issuer shall be a company limited by shares that is duly established and validly existing by law.
When a limited liability company is lawfully converted into a company limited by shares with the approval of the State Council, it may issue shares to the public by means of public share offering.
2. Unless otherwise approved by the State Council, the issuer shall be in operation for a continuous period of three years or more after its establishment as a company limited by shares.
Where a limited liability company is wholly converted into a company limited by shares according to the original book value of its net assets, the continuous operating period shall be calculated from the date the limited liability company was established.
3. The registered capital of the issuer shall have been paid up in full, the property right attached to any assets used as capital contributions by the promoter or shareholders shall have been transferred, and there shall be no major dispute over ownership of the issuer's major assets.
4. The business operations of the issuer shall comply with laws and administrative regulations, its articles of association, and the state's industrial policies.
5. There shall have been no significant change in the issuer's principal operations, directors and senior management and no change in its actual controller in the last three years.
6. The issuer's equity structure shall be well-defined and there shall be no major dispute over the ownership of shares held by the controlling shareholder, controlled shareholders and shareholders controlled by the actual controller.
1. The issuer shall have lawfully established sound systems of general meetings, the board of directors, the board of supervisors, independent directors and the secretary to the board of directors and the relevant departments and personnel can perform their duties according to law.
2. The issuer's directors, supervisors and senior officers shall understand laws and regulations related to the issuance and listing of shares and shall be aware of the statutory responsibilities and obligations of a listed company and its directors, supervisors and senior officers.
3. The issuer's directors, supervisors and senior officers shall have the qualifications specified by laws, regulations and rules, and shall not be subject to any of the following circumstances:
(1) Being banned from the securities market by the China Securities Regulatory Commission (CSRC), and such ban has not expired;
(2) Being subject to any administrative penalty imposed by the CSRC within the last 36 months or has been publicly censured by the stock exchange within the last 12 months;
(3) Being investigated by the judicial authorities because of a suspected criminal offence or investigated by the CSRC due to a suspected legal or regulatory violation, where no definitive and conclusive opinion has been issued;
4. The issuer's system of internal controls shall be sound and effectively implemented and can provide reasonable assurance as to the reliability of the issuer's financial reports, the legitimacy of the issuer's business operations, and the efficiency and effects of the issuer's operations.
5. The issuer shall not be involved in any of the following circumstances:
(1) Within the last 36 months, it has issued securities to the public or to the public in a disguised manner without the approval of the statutory authority; or its relevant legal violations that occurred 36 months ago are nevertheless ongoing;
(2) Within the last 36 months, it has been subject to administrative penalties as a result of violation of laws and regulations relating to, among other matters, industry and commerce, taxation, land, environmental protection, and customs, and the circumstances are serious;
(3) It has submitted an application to the CSRC within the last 36 months, but the application documents submitted included any false records, misleading statements, or material omissions; or it has obtained issuance approval by deceptive means while not meeting the issuance conditions; or it has interfered with the examination and verification work of the CSRC or the issuance review committee of the CSRC by improper means; or it has forged or altered the signature or seal of the issuer or the issuer's directors, supervisors or senior officers;
(4) The issuance application documents it submits on this occasion include any false records, misleading statements, or material omissions;
(5) It has been investigated by the judicial authorities due to a suspected criminal offence and no definite and conclusive opinion has been issued; or
(6) Any other circumstances where investors' lawful rights and interests and the public interest are seriously damaged.
6. The issuer's articles of association has specified the limits of authority for the examination and approval of external guarantees and the deliberation procedures for external guarantees, and no guarantee has improperly provided for its controlling shareholder, actual controller or any other enterprise under their control.
7. The issuer has a strict capital management system and has not have its funds used by its controlling shareholder, actual controller or any other enterprise under their control in the name of borrowings, debt repayments, advance payments or by any other means.
III. Finance & Accounting
1. The quality of the issuer's assets is good, its asset-liability structure is reasonable, and it has strong profitability and normal cash flows.
2. The issuer's internal controls are effective in all material respects and the issuer has obtained an unqualified internal control certification report issued by a certified public accountant (CPA).
3. The issuer's basic accounting practice is proper and its preparation of its financial statements is in compliance with the Accounting Standards for Business Enterprises and relevant accounting systems, and fairly reflects in all material respects its financial position, the results of operations and cash flows, and the issuer has obtained an unqualified audit report issued by a CPA.
4. The issuer shall prepare financial statements on the basis of transactions or events which have actually occurred; when confirming, measuring or submitting accounting records, it shall exercise due prudence; for the same or similar businesses, it shall adopt the same accounting policy and shall not change the accounting policy arbitrarily.
5. The issuer shall fully disclose the relationships with related parties and properly disclose related party relationships based on the principle of materiality. The pricing of related party transactions shall be fair and no profits have been manipulated through related party transactions.
6. The issuer shall meet the following conditions:
(1) Its net profit has been positive for the last three financial years, with the aggregate amount exceeding RMB 30 million, and net profits have been calculated based on the lower of the amounts before and after deducting non-recurring losses and profits;
(2) Its cumulative net cash flows from business activities for the last three financial years exceed RMB 50 million; or cumulative business income for the last three years exceeds RMB 300 million;
(3) Its total stock capital before issuance is no less than RMB 30 million;
(4) Its intangible assets (excluding land use rights, marine cultivation rights and mining rights, etc.) do not exceed 20% of net assets at the end of the latest period; and
(5) No loss has not been made up for in the latest period.
7. The issuer has paid tax in accordance with law and the various tax concessions it enjoys conform to the provisions of relevant laws and regulations. The issuer's business results are not heavily reliant on tax concessions.
8. The issuer shall not be subject to any major debt repayment risk or major contingent event such as a guarantee, lawsuit or arbitration proceedings which will adversely affect its continuing operations.
9. The application documents the issuer submits shall not involve any of the following circumstances:
(1) Deliberately omitting or fabricating transactions, events or other important information;
(2) Misusing accounting policies or accounting estimates;
(3) Manipulating, forging or tampering with accounting records or relevant vouchers on which financial statements are based.
10. The issuer shall not be involved in any of the following circumstances which adversely affect its ongoing profitability:
(1) There have been or will be significant changes in the issuer's business model and the variety and structure of its products or services which will have a material adverse impact on the sustainable profitability of the issuer;
(2) There have been or will be significant changes in the issuer's position in its industry or in the business environment of such industry, which will have a material adverse impact on the sustainable profitability of the issuer;
(3) The issuer's business income or net profit for the latest financial year was heavily reliant on any related party or any highly-uncertain client;
(4) The issuer's net profit for the latest financial year was mainly derived from investment income outside the scope of the consolidated financial statements;
(5) There is any risk of a material adverse change in the acquisition or use of major assets or technologies used by the issuer such as trademarks, patents, know-how and franchise rights; or
(6) Any other circumstances that are likely to have a material adverse impact on the sustainable profitability of the issuer.