China’s Nasdaq-style high-tech board unveils first group of companies for IPOs

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Shanghai Stock Exchange, one of the two stock exchanges operating independently in mainland China. (Image credit: Bigstock)

The Shanghai Stock Exchange unveiled last Friday the first group of nine companies that were eligible to file for initial public offerings on China’s new Nasdaq-style high-tech board, the Sci-Tech Innovation Board (STIB).

The list consists of four electronic equipment makers, three high-end equipment manufacturers, and two companies from emerging industries such as new material and biology.

The STIB was initially launched by Chinese President Xi Jinping in his keynote speech at the opening of the first China International Import Expo in Shanghai last November, aiming to experiment a registration-based IPO system.

China’s securities watchdog, the China Securities Regulatory Commission (CSRC), has said that the new sci-tech board in the Shanghai Stock Exchange would focus on companies in high-tech and strategically emerging sectors such as new generation information technology, advanced equipment, new materials and energy, and biomedicine, according to state-run news agency Xinhua.

The CSRC released regulation details on the STIB on March 1, under which eligible companies can become listed by filing required documents, instead of bidding for approval from the securities regulator. Which means the new board also allows companies that haven’t generated a profit to register for an IPO.

Among the nine companies that are ready to go public on the STIB, Jiangsu-based semiconductor manufacturer Hejian Technology is the only one that is not yet profitable. The company seeks to raise RMB 2.5 billion (around $370 million) in its IPO. It reported a net loss of RMB 146 million for the year ended December 31, 2018, and has shown deficits for three years running, according to the prospectus (in Chinese) that the company filed to the exchange.