(Yicai Global) Dec. 4 -- Companies looking to list on Shanghai's upcoming science and technology innovation board will require less strict financial performance requirements compared with those on the city's main index, according to an industry insider.
Listings on the new tech board require that firms meet three criteria regarding performance, which are also more stringent than flotations on the growth enterprise board, National Equities Exchange and Quotations big data platform Wabei reported the insider as saying. Unveiled by President Xi last month, the board aims to attract listings from new economy players through the city's stock exchange.
Would-be listers must have achieved at least CNY50 million (USD7.3 million) in net profit over a period of two straight years, or CNY200 million in the most recent year. This compares to CNY30 million over three years and CNY50 million in cash flow, or CNY300 million in operating revenue, for main board listings.
For listings on the GE index, firms need to have made CNY10 million in profit over the preceding two years, including CNY5 million in the most recent year. They also require revenue of at least CNY50 million in the past two years and a growth rate of at least 30 percent, making new tech board flotations more stringent.
Firms looking to list on the new tech board must also meet requirements in line with China's national strategies, have key technologies and be highly recognized in the market. They should be from high-tech and emerging sectors including internet, big data, cloud computing, artificial intelligence, software and integrated circuits, high-end equipment manufacturing, biopharmaceuticals, new materials and new energy.
The second financial requirement for would-be listers is earnings in excess of CNY200 million in the most recent year as well as a research and development investment margin over three years of at least 10 percent. The third condition is a market value of at least CNY2 billion (USD291.3 million) or, alternatively, business revenue in the past year of over CNY300 million.
The insider also provided details of criteria regarding three more requirements related to company operations. They must be limited liability companies and work in line with regulatory bodies. Listings also require three years of standard audit reports with unqualified opinions from a certified public accountant, while senior company figures should have a clean criminal record for the past three years.
The Shanghai Stock Exchange has completed work on the organizational structure for the new tech board, the insider said, adding that registration and regulatory departments have been set up.
Editor: William Clegg