China opens ChiNext exchange to pre-profit tech firms in push to boost innovation
Beijing widens IPO access for emerging tech companies while tightening oversight, as it seeks to balance innovation with market stability
China will allow pre-profit technology companies to list on the ChiNext board in Shenzhen and introduce market makers to improve liquidity, as regulators step up efforts to bolster the mainland’s second-largest stock exchange and advance the country’s push for technological self-reliance.
Under the new rules, emerging-industry companies with an estimated market value of at least 3 billion yuan (US$439 million) and revenue no less than 200 million yuan in the most recent financial year would be eligible to apply for initial public offerings (IPOs) on ChiNext, the China Securities Regulatory Commission (CSRC) said in a statement on Friday.
The reforms form part of a broader overhaul of the 16-year-old board, with measures aimed at curbing volatility and attracting a wider pool of investors. The regulator said it would expand the range of exchange-traded funds and options linked to ChiNext, and introduce related index futures in due course.
“The deepening of ChiNext reforms will attract more high-quality listed companies and bring in long-term, patient and strategic capital,” the CSRC said. “This is significant in strengthening the foundation for stable market operations.”
The measures echo pledges made last month by CSRC chairman Wu Qing to extend to ChiNext the reform framework of Shanghai’s Nasdaq-style Star Market, which hosts leading domestic technology firms such as Semiconductor Manufacturing International Corp, known as SMIC, and AI chipmaker Cambricon Technologies.
Promoting technological innovation remains a core priority under China’s latest five-year plan approved in March.