China's new board may have flexible listing standards

Source:Cfbond 2018-12-06 19:35

By Yin Lei

China's hi-tech companies planning to float their shares at the forthcoming science and innovation board may see relatively flexible listing requirements, according to a report of Securities Times on Thursday based on its multiple sources.

The science and innovation board, aiming to attract China's innovative hi-tech firms that could not get listed under the existing initial public offering (IPO) rules, would parallel the NASDAQ Stock Exchange in the U.S. and the Stock Exchange of Hong Kong Ltd., said a senior investment manager with knowledge of related issues.

By analogy, this means that a hi-tech applicant may stand a chance for a successful IPO at the new board as long as it performs well enough in only some of a range of indicators, including profit record, assets, valuation and period of existence, among others. Other indicators specific to certain industries may also apply, such as the clinical progress for a pharmaceutical company.

This senior investment manager said China's securities regulator might prefer industry leaders for this new board, or the "hidden champions" that can hardly get listed under the current IPO system.

Specifically, a qualified applicant for the new board must possess certain core technologies. The odds are bad for companies that are based only on dubious new business models, adopt only some trendy devices, e.g. using drones for food delivery, or apply immature technologies, such as the blockchain technologies which are not yet fully developed.

Another investment professional disclosed that possibly the listing requirements of the science and innovation board may vary with the different sizes of the IPO applicants' valuation. Based on their specific valuation, several levels of standards may apply to their profit record, revenues, cash flows, market prospect and shareholders, said this professional.

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