China's capital market reform spurs listing on Shanghai's sci-tech board
Shanghai Stock Exchange will have its first review session of the Science and Technology Innovation Board on June 5. Since the board was introduced, it has propelled venture capital and private equity funds into various science and technology firms.
According to data from China's Asset Management Association, so far over 100 companies have applied for board listing, and around 80 percent of them are backed by PE or VC funds. The companies have accumulated over 22 billion yuan from 200 institutions.
During an interview with CGTN in this year's Yale U.S.-China Forum, Li Qiushi, managing partner of GTJA Investment Group, said the new tech board is widely regarded as China's Nasdaq, and would definitely facilitate the country's science and technology innovation.
He further elaborated that startups like bio-pharmaceutical enterprises could hardly gain revenue or cash flow when they're developing the clinical trial of new medicine, hence it's obviously impossible for them to list on A-share market.
"While based on the cases we've invested, the ones who're processing series B and C rounds of funding are very suitable to file applications for the new board. The first priority we'll consider about investing in the company is its capacity to innovate, and then comes the corporate governance," he added.
Abel Halpern, who founded a London-based private equity investment company named KETERM, noted that it's important for China to aim for the future and invest for a longer term. He listed digital infrastructure as a priority that would deeply shape China's future in the long run.
As the new trading platform will experiment with a registration-based system for listed companies, these value investors are also calling for regulators to require stricter information disclosure for IPO.
Cheng Houbo, the president of CMAF Management Company, told CGTN that with the registration system, investors must decide by themselves about which companies are worthy of investment. That's different from the past when the government decided what companies are qualified for listing or not. So now all they can rely on to make their decision are corporate disclosures.
Cheng emphasized that information such as company basics and prospectus details must be completed and made accurate for investors' check. "With the gradual implementation of multi-faceted capital market, I'm positive that problems like absence of institutional investors and long-term capital participation could be solved," he said.