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United States securities and exchange commission logo
April 7, 2022
Larry Wu
Chairman and Chief Executive Officer
GigaCloud Technology Inc.
Unit A, 12/F, Shun Ho Tower
24-30 Ice House Street
Central
Hong Kong
Re: GigaCloud
Technology Inc.
Amendment No. 5 to
Draft Registration Statement on Form F-1
Submitted March 15,
2022
CIK No. 0001857816
Dear Mr. Wu:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Amendment No. 5 to Draft Registration Statement on Form F-1 Submitted
March 15, 2022
Cover Page
1. We note your amended
disclosure in response to comment 1, but the disclosure does not
fully comply with the
comment. Where you note that you are a Cayman Islands holding
company, please also
disclose that you are not a Chinese or Hong Kong operating
company. In addition,
revise your disclosure to clarify that your corporate structure
involves unique risks
to investors based on the fact that investors are purchasing equity
securities in a Cayman
Islands holding company with operations conducted by your
subsidiaries based in
China and Hong Kong. In this regard, the current disclosure on your
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prospectus cover page only indicates that your "corporate structure
involves unique risks
to investors" based on the fact that "they are purchasing equity
securities in a Cayman
Islands holding company." Please also acknowledge that Chinese
regulatory authorities
could disallow this structure, which would likely result in a material
change in your
operations and/or a material change in the value of the securities you
are registering for
sale, including that it could cause the value of such securities to
significantly decline or
become worthless. Include similar disclosure in your risk factors and
provide cross-
references here to the specific risk factors that provide a detailed
discussion of each of the
risks facing the company and the offering as a result of this
structure.
2. We note your amended disclosure in response to comment 2. Please
further revise the
prospectus cover page to specifically state that your operations in
Hong Kong are subject
to political and economic influence from the Chinese government.
Please also include
disclosure addressing how recent statements and regulatory actions by
China s
government related to China s extension of authority into Hong Kong
have or may impact
the company s ability to conduct its business, accept foreign
investments, or list on a U.S.
or other foreign exchange.
3. We note your amended disclosure in response to comment 3, and reissue
the
comment. Please revise your disclosure in the third paragraph of your
cover page and
elsewhere as appropriate to use different defined terms for the
holding company and
its subsidiaries in the PRC and Hong Kong so that it is clear to
investors which entity the
disclosure throughout the document is referencing and which
subsidiaries or entities are
conducting the business operations. In revising your disclosure, you
should refrain from
using terms such as we or our when describing activities
or functions of a PRC or
Hong Kong subsidiary, as you do in the current disclosure included in
the third paragraph
of the cover page and elsewhere throughout the filing. You should also
revise the
disclosure in the third paragraph of your cover page and elsewhere as
appropriate to
clarify whether you will refer to the subsidiaries that conduct your
operations in China as
PRC subsidiaries and the subsidiary that conducts your
operations in Hong Kong as the
Hong Kong subsidiary, as you have elsewhere throughout the
filing.
4. We note your amended disclosure in response to comment 4. In addition
to cash flows,
please also quantify any transfers of other assets by type that have
occurred between the
holding company and its PRC and Hong Kong subsidiaries, and direction
of transfer.
Your disclosure should make explicitly clear if no such transfers have
been made to date.
In addition, please expand the disclosure to cover transfers,
dividends, or distributions that
have been made between the holding company and its PRC and Hong Kong
subsidiaries,
or to investors, during your fiscal year ended December 31, 2019.
Further, please revise
your disclosure to clarify whether any transfers, dividends, or
distributions have been
made between your former PRC-based VIE and the holding company, its
subsidiaries and
principal consolidated VIEs during your fiscal years ended December
31, 2019, and
2020. As a related matter, please amend your disclosure to state that,
to the extent cash in
the business is in the PRC or a Hong Kong entity, and may need to be
used to fund
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operations outside of the PRC or Hong Kong, the funds may not be
available due to
limitations placed by the Chinese government. Lastly, please make
conforming revisions
to the "Cash Transfers and Dividend Distribution" sub-section of your
prospectus
summary.
5. We note the disclosure included in the ninth paragraph of your cover
page indicates
that Our Class A ordinary shares may be delisted under the HFCA Act
if the PCAOB is
unable to inspect auditors who are located in China. Please revise
this paragraph to
disclose that the Commission adopted rules to implement the Holding
Foreign Companies
Accountable Act and that the United States Senate has passed the
Accelerating Holding
Foreign Companies Accountable Act, and discuss the related inspection
timeframes under
both Acts, as you do on pages 12-13 and 73.
Prospectus Summary
Summary of Risk Factors
Risks Related to Doing Business in China, page 8
6. We note your amended disclosure in response to comment 5. However,
your amended
disclosure does not fully comply with the comment. Please expand the
fourth bullet point
of this sub-section to clarify that the Chinese government may exert
more control over
offerings conducted overseas and/or foreign investment in China- and
Hong Kong-based
issuers, which could result in a material change in your operations
and/or the value of the
securities you are registering for sale. In addition, expand the
second to last bullet point
of this sub-section to clarify that any actions by the Chinese
government to exert more
oversight and control over offerings that are conducted overseas
and/or foreign investment
not only in China-based issuers, but also in Hong Kong-based issuers,
could significantly
limit or completely hinder your ability to offer or continue to offer
securities to investors
and cause the value of such securities to significantly decline or be
worthless. Please also
describe the significant liquidity risks that your corporate structure
and being based in
Hong Kong and having the majority of your operations in China and Hong
Kong, poses to
investors. Finally, please provide cross-references to the specific
risk factors that provide
a detailed discussion of each risk included here.
Recent Regulatory Development
Cybersecurity Measures and Potential CSRC Filing For Overseas Listing, page 10
7. We note your amended disclosure in response to comment 6, and we
reissue it as follows:
Please ensure your discussion of permissions and approvals
required to be obtained
from Chinese authorities to offer the securities being registered
to foreign investors
also covers you and your Hong Kong subsidiary. In that light,
please revise to use
clearly stated definitions. In this regard, we note disclosure
that "we are currently not
required to file with the CAC for a cybersecurity review," "we
are currently not
required to make a filing with the CSRC," and "our PRC
subsidiaries (i) are not
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required to submit an application to the CAC, CSRC or any other
PRC authorities for
the approval of this offering . . . ." In addition, please
affirmatively state whether you
or your Hong Kong subsidiary are covered by permissions
requirements from the
China Securities Regulatory Commission (CSRC), Cyberspace
Administration of
China (CAC) or any other PRC authorities, and state affirmatively
whether you and
your Hong Kong subsidiary have received all requisite permissions
or approvals and
whether any permissions or approvals have been denied. To the
extent you believe
that you and your Hong Kong subsidiary are not subject to such
permissions
requirements, please disclose the basis for your belief that such
permissions are not
required.
Please revise your disclosure to clearly distinguish between
each of the three
scenarios of consequences in our prior comment to you and your
investors. Please
ensure that you address the consequences, if any, for you, your
Hong Kong
subsidiary, and your PRC subsidiaries in each scenario.
As applicable, please make conforming revisions to your Risk Factors.
8. Please indicate to what extent, if any, you are relying upon your
opinion of your "PRC
Legal Counsel" to make conclusions with respect to all permissions and
approvals
necessary to operate your business and offer the securities being
registered to foreign
investors. In this regard, we note that your disclosure only
references PRC Legal Counsel
in the context of M&A Rules; however, the legal opinion filed as
Exhibit 99.2 adopts as
its opinion the disclosure summarizing matters of PRC Law throughout
your registration
statement.
9. We note your amended disclosure in response to comment 7, and your
belief that your
"PRC subsidiaries are not subject to such record-filing requirements
with the NDRC and
MOFCOM under the Measures for the Security Review of Foreign
Investment." Please
also affirmatively state whether you believe that you or your Hong
Kong subsidiary are
subject to these measures. Additionally, if you do not believe that
you and such entity are
subject to these measures, please explain why. As applicable, make
conforming revisions
to the disclosure in your risk factors.
10. We note your disclosure that, "As the Draft Overseas Listing Rules
have not been enacted,
we are currently unaffected and we believe that we are currently not
required to make a
filing with the CSRC for this offering and listing under the Draft
Overseas Listing
Rules." Please also affirmatively state whether you believe that you,
your Hong Kong
subsidiary, and/or your PRC subsidiaries would be subject to the CSRC
s Draft Overseas
Listing Rules if they were enacted before the completion of this
offering and listing. To
the extent you do not believe you and such entities would be subject
to this regulation if
it were enacted before the completion of this offering and listing,
please explain why.
Lastly, please revise your disclosure in this section to explain why
you believe CSRC
approval under the M&A Rules is not required in the context of this
offering, as you do on
pages 55 and 147.
Larry Wu
GigaCloud Technology Inc.
April 7, 2022
Page 5
Risk Factors
Risks Related to Doing Business in China
The PRC government may exercise significant oversight and discretion over . .
.., page 52
11. We note the additional disclosure you have provided in response to
comment 9. Please
revise the body of your disclosure in this risk factor to specifically
highlight the risk that
the Chinese government may intervene or influence your operations at
any time,
which could result in a material change in your operations and/or the
value of the
securities you are registering. Please make conforming changes to the
risk factor
disclosure on page 55. In addition, we note your disclosure on page 53
that "the PRC
government has recently indicated an intent to exert more oversight
and control over
overseas securities offerings and other capital markets activities by,
and foreign
investment in, companies with operations in the PRC." Please revise
this disclosure to
clarify that the PRC government's intent to exert more oversight and
control applies not
only to companies with operations in the PRC, but also to Hong
Kong-based issuers.
Finally, please acknowledge the risk that any such action by the
Chinese government to
exert more oversight and control over offerings that are conducted
overseas and/or foreign
investment in China- and Hong Kong-based issuers could significantly
limit or completely
hinder your ability to offer or continue to offer securities to
investors and cause the value
of such securities to significantly decline or be worthless.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Liquidity and Capital Resources
Operating Activities, page 120
12. The disclosure here appears to repeat information already provided in
the statement of
cash flows. Please provide a quantitative and qualitative analysis of
the reasons
underlying changes in operating cash flows from period to period. Refer
to Item 5 of
FirstName LastNameLarry Wu
Form 20-F, in particular instruction 9 to instructions to Item 5,
section III.D of Release
Comapany NameGigaCloud
No. 33-6835, Technology
section IV.B.1 Inc. No. 33-8350 and Release No.
33-10890 for
of Release
April 7,guidance.
2022 Page 5
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Larry Wu
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You may contact Keira Nakada at 202-551-3659 or Doug Jones at
202-551-3309 if you
have questions regarding comments on the financial statements and related
matters. Please
contact Nicholas Lamparski at 202-551-4695 or Jennifer L pez Molina at
202-551-3792 with
any other questions.
Sincerely,
Division of Corporation
Finance
Office of Trade &
Services
cc: Benjamin Su