(Yicai Global) Feb. 5 -- Shengyi Electronics, a unit of Shanghai Stock Exchange-listed Shengyi Technology, is proceeding with its initial public offering on the Shanghai bourse’s Star Market in the first spin-off listing on the mainland bourses.

The Dongguan, Guangdong province-based printed circuit board maker announced an offer price of CNY12.42 (USD1.92) per share yesterday and is eyeing a windfall of CNY2.1 billion (USD324.5 million). Shengyi Tech will keep a 62.93 percent stake in the unit.

Shengyi Tech became the first Chinese company last month to win approval from regulators to calve out a subsidiary for a separate listing on the mainland bourses.

More companies will follow in Shengyi Tech’ footsteps as spin-offs are a good way for listed firms to seek diversified financing, an investment banker told Yicai Global. Spin-off listing can help companies that have already gone public revitalize their internal technological innovation strengths, such as providing more flexible equity incentive plans to employees, he said.

Spin-off listing will become a trend and there remains a lot of room for development as the Shanghai and Shenzhen stock markets become increasingly global and market-oriented, said Fu Lichun, chief economist at Yti Capital.

In December 2019, the China Securities Regulatory Commission announced that it will start allowing companies already listed on the mainland to split off subsidiaries for a separate, independent listing in Shanghai or Shenzhen. So far, over 60 firms have declared such an intention, mostly eyeing the Star Market and Shenzhen’s ChiNext Board which use the quicker registration-based system. Most are in emerging industries such as information technology and medicine.

Shares of Shengyi Tech [SHA:600183] closed up 3.09 percent at CNY22.68 (USD3.51) apiece today after rising as much as 4.36 percent earlier in the day.

Editors: Tang Shihua, Kim Taylor