China’s new tech board accepts first three applicants for IPO

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A concierge collating documents at the Shanghai Stock Exchange located at the Lujiazui Financial District in Pudong, China on April 4, 2019. (Image Credit: TechNode/Eugene Tang)
A concierge at the Shanghai Stock Exchange located at the Lujiazui Financial District in Shanghai, China on April 4, 2019. (Image Credit: TechNode/Eugene Tang)

The Shanghai Stock Exchange has approved its first three companies to go public on the bourse’s new Nasdaq-style high-tech board, according to a statement published Wednesday by the exchange.

Shenzhen Chipscreen Biosciences Co., Suzhou TZTEK Technology Co., and Anji Microelectronics Technology (Shanghai) Co. have been approved, said the exchange. The three companies are respectively biotech, semiconductor, and artificial intelligence companies, and are expected to list on the Science and Technology Innovation Board at the beginning of July.

After receiving the final approval document signed by the Shanghai Stock Exchange, the three companies will need to file applications to register with the China Securities Regulatory Commission (CSRC), the country’s securities watchdog. The CSRC will decide whether the registrations will be accepted within 20 days, according to listing rules (in Chinese) published by the regulator.

The new board is a testing ground for China’s experiment with a registration-based IPO system to attract Chinese technology companies looking to raise funds on domestic exchanges.

Before the new tech board was proposed, strict listing criteria forced China’s biggest tech firms, including Tencent, Alibaba, Baidu, and JD, to list on exchanges overseas. Tencent is listed in Hong Kong while Baidu, Alibaba, and JD are registered in New York.

The CSRC has said the new board will focus on companies in high-tech and strategic emerging sectors such as new-generation information technology, advanced equipment, new materials and energy, and biomedicine, according to state-run news agency Xinhua.

The priority sectors echo the 10 advanced industries highlighted by Made in China 2025, a government-led industrial program at the center of the contentious US-China trade dispute. The US has said the program aims to surpass western technological prowess in advanced industries by using subsidies and pursuing intellectual property acquisition.