YICAI | China Approves Star Market IPOs for More Unprofitable Tech Firms in Wake of Reforms
(Yicai) Sept. 23 -- Regulators have cleared the way for three more unprofitable technology companies to go public on Shanghai's Nasdaq-style Star Market, following reforms announced in June to fast-track the listing of innovative firms that are yet to turn a profit.
Healthgen Biotechnology, a Wuhan-based producer of plant-derived recombinant protein pharmaceuticals, was the first to apply for an initial public offering under the Star Market's fifth listing standard, Wu Qing, chairman of the China Securities Regulatory Commission, said at a press briefing yesterday. Its listing application was approved on July 1.
The fifth standard is a special listing pathway that imposes no requirements on an applicant's profit or revenue. Instead, it requires the company's core business or products to have been approved by central government authorities and the firm needs to demonstrate significant market potential and milestone progress.
China's capital market reforms -- notably the revival of the Star Market's fifth listing standard -- are intended to better support science and technology firms that deliver major technological breakthroughs, sustain R&D investment, and show strong business prospects, Wu said on June 18.
The other two businesses recently given the green light were BeBetter Med, a new drug application stage researcher and developer with seven treatments in clinical trials, and chip products maker Eswin Material Technology. Guangzhou-based BeBetter Med got approved on Aug. 7, while Eswin, headquartered in Xi'an, was cleared on Aug. 29.
Several other unprofitable innovators, including Insight Lifetech and Trinomab Pharmaceutical, have made headway in the post-reform IPO queue.
In addition to those applying via the fifth standard route, the Star Market is also reviewing filings by other unprofitable businesses, including chip producers MetaX Integrated Circuit Shanghai, Zhaoxin Semiconductor, and Moore Threads Intelligent Technology.
Since the Star Market was launched in July 2019, around 20 companies have gone public using the fifth standard, though the channel was inactive for nearly two years. The previous successful candidate was Genrix Biopharmaceutical in June 2023.
Beyond the Star Market, the ChiNext board in Shenzhen, also a Nasdaq-style stock market, accepted its first unprofitable applicant, Dapu Microelectronics, better known as DapuStor, under its parallel rules on June 27. The firm moved to the inquiry stage on July 6.