Fifth Listing Standard Adds New Momentum as The SSE STAR Market's Regulatory Framework Grows More Inclusive

Translated from Shanghai Securities News, Qi Doudou

When the SSE STAR Market was first established, it fully considered the actual development of science and technology enterprises and launched fifth listing standards. The fifth standards is specifically aimed at technology companies that are not profitable but have high growth potential. It uses "market value + R&D" as the evaluation method to break the restrictions of traditional capital markets on corporate profits and other aspects, emphasizing that the main business or products of enterprises are approved by the state, have a large market space and have achieved phased results. It opens up financing channels for innovative companies that are in the critical period of R&D and have not yet made a profit.

On June 19, 2024, the "SSE STAR Market Eight Measures" issued by the China Securities Regulatory Commission clearly proposed to strengthen the "hard technology" positioning of the SSE STAR Market and support high-quality unprofitable technology companies to be listed on the SSE STAR Market. At this year's National Two Sessions press conference, Wu Qing, Chairman of the China Securities Regulatory Commission, also said that it is necessary to steadily implement a more inclusive issuance and listing system and accurately support high-quality technology companies.

Inclusiveness Helps Pharmaceutical Companies Innovate and Develop

Several SSE STAR Market pharmaceutical company executives said the fifth listing standards is significant. For innovative drug companies, their development capital investment is large, the technical barriers are high, and the R&D cycle is long. Funds are the key to development. The SSE STAR Market allows unprofitable innovative companies to be listed, opening up diversified financing channels for such companies and providing them with strong financial guarantees after listing. At the same time, the "SSE STAR Market Eight Measures" optimizes the equity and debt financing system, helps enterprises increase investment in R&D and talents, and lays the foundation for high-quality development.

Judging from the results, after the opening of the SSE STAR Market, in addition to 20 innovative biopharmaceutical companies that adopted the fifth listing standards, there were also three unprofitable innovative drug companies, such as BeiGene, Ltd., listed on the SSE STAR Market as red chip enterprises. These companies use the capital market to raise funds, actively deploy cutting-edge technologies such as antibody drugs and ADCs, focus on major disease areas, and improve the accessibility and affordability of innovative drugs. Statistics show that among the 20 listed companies adopting the fifth standards, 19 companies have been approved to sell 45 self-developed drugs (including vaccines), and all companies have achieved core product marketing or marketing applications accepted. In 2024, the total revenue of these 20 companies was 14.21 billion yuan, with a year-on-year increase of 44.17%. Some companies achieved significant breakthroughs in revenue. For example, Dizal (Jiangsu) Pharmaceutical Co., Ltd.'s sales revenue increased by 294.24% year-on-year in 2024. Its self-developed Golidocitinib filled the gap of no innovative drugs in the PTCL field in the past decade. After being listed, Shanghai Allist Pharmaceuticals Co., Ltd. shed the "U" mark in just 2 years and 5 months with the help of financing and commercialization of core products.

The SSE STAR Market Activates Industrial Innovation Ecosystem

The SSE STAR Market not only opens up financing channels for enterprises, but also activates the industrial innovation ecosystem. For example, Shanghai Junshi Biosciences Co., Ltd. uses the SSE STAR Market to showcase innovative achievements at home and abroad, enhance its influence and market recognition, and also cooperate with universities, research institutes and well-known pharmaceutical companies to promote the transformation of scientific and technological achievements. With the help of the SSE STAR Market, Sinocelltech Group Limited has increased its product market share, turned losses into profits and shed the "U" mark, improved its rating in the banking system, made debt financing more convenient, and was able to build a production base to ensure product production. Shanghai MicuRx Pharmaceutical Co., Ltd. raised funds through the SSE STAR Market to resolve financing bottlenecks and increase investment in the research and development of innovative antimicrobial drugs.

The "SSE STAR Market Eight Measures" is about to celebrate its first anniversary. All parties in the market expect it to further stimulate the role of the SSE STAR Market as a "test field", help more innovative companies flourish, and promote the deep integration of scientific and technological innovation and industrial innovation.

The above information is provided for reference purposes only and does not constitute investment advice.