Questions Relating to Our Proposed Hong Kong IPO and Subsequent Decision to List in the USInvestors have raised questions regarding our decision to abort our proposed Hong Kong IPO in 2008, and our subsequent decision to list instead in the U.S. through an RTO SPAC transaction. We began the HK IPO process with high hopes, having secured Goldman Sachs as our lead underwriter, and Ernst & Young as our auditor. The support from these two industry leaders is itself a strong testament to our healthy financial and operational position at the time. However, the IPO market in Hong Kong was severely affected by the economic downturn in the second half 2008 and many IPOs were withdrawn. We were one of them. One of our competitors, Xtep, was listed on the HKEX in May 2008. However, the share price of Xtep dropped approximately 30% within one month after its listing. This clearly had a negative impact on investor confidence in the PRC sportswear market at that time. In fact, the HK IPO window was essentially closed for Chinese sportswear companies during the period we had considered our listing. As noted, Xtep listed in May 2008, and the next sportswear company listing was not until July 2009, with the IPO of 361. In the interim, with limited visibility into when the market conditions in Hong Kong would be more conducive to a listing, we made the decision to list in the U.S.
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