China to loosen IPO restrictions by reinstating listings of unprofitable start-ups: CSRC

South China Morning Post

5 hours ago

China plans to resume listings of unprofitable start-ups on its technology boards in an effort to support the nation's drive toward technological self-sufficiency and roll back curbs on
the initial public offering (IPO) market , according to the head of the stock market regulator.
At the Lujiazui Forum in Shanghai on Wednesday, Wu Qing, chairman of the China Securities Regulatory Commission (CSRC), said listings would be restarted for pre-profit firms seeking to trade on the Shanghai exchange's Technology and Innovation Board,
also known as the Star Market . The watchdog would also apply the rule to Shenzhen's ChiNext board, which hosts smaller companies.
The relaxation came as a surprise to investors after two years of strict IPO approvals by the CSRC, which sought to arrest a decline in China's US$10.5 trillion stock market by reducing equity supplies. The move is seen as a supportive measure for China's start-ups at a time when Beijing is seeking to reduce its tech reliance on the US amid simmering trade tensions.
'Innovation requires alliance among scientists, entrepreneurs and investors,' Wu said.
The Star Market 50 Index, which tracks the 50 biggest stocks on the board, including Semiconductor Manufacturing International and artificial intelligence (AI) chipmaker Cambricon Technologies, reversed a loss of as much as 0.4 per cent before trading little changed. A gauge of the ChiNext board dropped 0.4 per cent.
The relaxation was meant to 'better and more precisely' serve high-quality tech companies that have breakthroughs, big spending on research and development, and promising business outlooks, Wu said. A wider array of unprofitable companies – including firms engaged in AI, commercial aviation and the low-altitude sector – could apply for listings on the Star Market before they became profitable, he said. The CSRC would also kick off a trial programme introducing 'seasoned' professional investors to trade the stocks after listings, Wu said.