(Yicai Global) June 25 -- Major ride-hailer Ucar may replace Xiaomi as the first company to list on China's A-share market through China Depositary Receipts, a broker told Yicai Global.

Ucar [NEEQ:838006], the biggest company on China's Nasdaq-like New Third Board, suspended share trading on June 14, citing a major event. The Beijing-based company has been working to resolve issues associated with shareholdings related to contractual private funds, asset management plans and trust plans, said the employee at a Chinese brokerage.

"This indicates that Ucar will very likely seek an A-share listing," he said.

Companies with a higher proportion of shareholdings via contractual private funds, asset management plans and trust plans receive a greater level of scrutiny from regulators because of the associated risks stemming from a lack of transparency on the actual investors. The shareholder make-up of Ucar could affect approvals for inclusion in the CDR pilot program.

Smartphone giant Xiaomi had been expected to become the first to take advantage of the pilot, which allows non-mainland-listed companies to issue A-shares. Ucar also trades in Hong Kong [HKG:0699]. Xiaomi halted its CDR plan on June 19 following consultation with the country's securities regulator.

The CDR scheme marks an ambitious attempt to rejuvenate the mainland market by bringing home overseas-listed tech giants and encouraging new listings. The alternative listing approach skirts legal barriers, such as minimum profit thresholds and restrictions on dual-class shares.

With a market cap of CNY45.2 billion (USD6.9 billion) and CNY9.8 billion in revenue last year, Ucar is the only firm listed on the National Equities Exchange and Quotations to meet the CDR program's requirements. Non-overseas-listed innovative companies wishing to take part need revenue of more than CNY3 billion in the past year and a valuation of at least CNY20 billion.

A CDR issuance would suit Ucar as it has high growth potential and a relatively small market cap, an analyst said, adding that the company is expected to restore profitability this year. 

Editor: William Clegg