Shanghai Securities News｜Listing of SOEs and Central SOEs Pick up Pace on SSE STAR Market to Pool Capital in Advanced Technology

Edited and Translated from Shanghai Securities News and www.cnstock.com

As the latest state-owned enterprise (SOE) reforms continue to deepen, state-owned capital has expedited efforts to leverage the SSE STAR Market, turning it into a crucial platform for supporting the high-quality development of SOEs. According to data from Tonghuashun, the SSE STAR Market has facilitated the listing of 59 SOEs, raising over 158.6 billion yuan in IPO. In 2024, new policies were introduced to support leading enterprises in strengthening their core businesses and integrating industrial chains. SOEs and central SOEs responded positively to these policies and utilized their strength to inject momentum into the high-quality development of listed companies.

China Merchants Group makes strategic investment in Cathay Biotech Inc., thereby enhancing its presence in the synthetic biology industry. Cathay Biotech, a constituent of the STAR 50 Index, was listed on the SSE STAR Market on August 12, 2020. The company specializes in developing innovative biological materials through synthetic biology. Its biological long-chain diacid products are among the leading products globally. On June 26, 2023, China Merchants Group (CMG) announced its intention to indirectly participate in Cathay Biotech's private placement for up to 6.6 billion yuan, which has received approval. Following this transaction, CMG, as an indirect significant shareholder will collaborate with Cathay Biotech on bio-based polyamides, allowing subsidiaries of CMG to reduce carbon emissions and Cathay Biotech to benefit from a wide array of application scenarios.

China Telecom takes control of Quantumctek, beginning a new chapter for the company. Quantumctek Co., Ltd. (Quantumctek) has made remarkable strides in quantum communication but its application is limited. In May 2023, China Telecom Corporation Limited (China Telecom) invested 3 billion yuan to establish the China Telecom Quantum Group (CTQG). On March 12, 2024, Quantumctek announced its plan to issue shares to CTQG, making it a subsidiary controlled by CTQG, with the actual controller shifting to the State-owned Assets Supervision and Administration Commission of the State Council. This transaction holds significant synergies, as China Telecom will help Quantumctek tackle promotional challenges, while Quantumctek will support China Telecom in integrating quantum technology into vital digital infrastructure, thereby further strengthening sovereign information security.

Guangzhou's state-owned capital takes control of Farasis Energy to integrate into the regional industrial chain. On January 4, Farasis Energy announced that its controlling shareholder had signed a share transfer agreement with Guangzhou Industrial Investment Holding Group (GIIHG). The plan involves transferring 5% of shares and waiving 5.34% share voting rights. Additionally, Shenzhen Anyan Investment Partnership intended to transfer no more than 2% of its shares in the company to GIIHG Capital Management. Once the transaction is finalized, the company's controlling shareholder may shift to GIIHG, with the actual controller likely changing to the People's Government of Guangzhou Municipality. GIIHG, with its considerable strengths, and Farasis Energy, a leader in the power battery sector, are poised to benefit from this transaction. Farasis Energy may alleviate its cash flow pressure and achieve better integration with Guangzhou's new energy vehicle industrial chain, while Guangzhou state-owned capital can be channeled into in the new energy vehicle industry.

Excerpted from Shanghai Securities News and www.cnstock.com on January 8, 2025

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