Suppose mainland Chinese incorporated entity SINOCMP is about to list on HKEX via a global offer. The IPO comprises a primary offer of 2,000 million H-shares at a final offer price of $10 per share. Just prior to the global offer, SINOCMP has 5,000 million shares outstanding, all of which are in tradable A-share form and listed in Shanghai. Of the 5,000 million A-shares, 4,200 million are held by state investor ST. The remainder (800 million shares) of the tradable A-stock is held by a large number of retail and domestic institutional investors.

Within the H-share global offer of 2,000 million shares, 500 million shares are earmarked for a group of ten cornerstone parties (CPs). Each of the CPs has agreed to lock-in its equity investment for 12 months. Note that the global coordinator to the H-share IPO plans to borrow 300 million shares from the CPs so as to generate an over-allocation. In addition to the offering of 2 billion H-shares, a further 200 million shares originally held by ST are to be converted from domestic, tradable A- into H-share form and transferred to Chinas NSSF. Note that in this Share Reduction Scheme no funds are generated from such share transfers. Moreover, the NSSF commits to retain the shares transferred to it for the foreseeable future. Compute: (*)

(a) The percentage of equity retained by ST in SINOCMP immediately after full GreenShoe exercise (Round to two decimal places).

(*) Assume the over-allotment option is fully exercised, leading to 15 percent enlargement of the offer (i.e., a new issue of 300 million H- shares at $10.00 per share) and a further conversion (into H-share form) and transfer of 30 million domestic shares from ST to the NSSF.

(b) Assume that the NSSF holds 50 million tradable A-shares in SINOCMP prior to the H-share IPO. Furthermore, it arranges to buy 20 million H-shares from the global offering and 3 million H-shares from the over-allocation. Accordingly, compute the NSSFs percentage holding in SINOCMP (as rounded to three decimal places) after full Green-Shoe exercise?

(c) What is the market capitalization value of SINOCMPs outstanding stock after full Green-Shoe exercise (based on an end of Stabilization Period secondary market price for SINOCMPs H-stock of HK$11 per share and a tradable A-share market price as of that point in time of RMB12).

Tradable A-share market capitalization (RMB)

Tradable H-share market capitalization (HK$)

Total market capitalization (HK$)