(Yicai Global) Jan. 7 -- Shanghai Stock Exchange-listed Shengyi Technology, an electronic circuit board supplier, has become the first Chinese company to win approval from regulators to calve out a subsidiary for a separate listing on the mainland bourses.

The China Securities Regulatory Commission approved the application for unit Shengyi Electronics to go public on the Shanghai Stock Exchange’s Nasdaq-style Star Market on Jan. 4, seven months after the application was first filed, the Shanghai bourse said yesterday.

Shengyi Electronics aims to raise CNY4 billion (USD619.4 million) in the initial public offering. It will issue 166 million shares, around 20 percent of its total capital stock. Dongguan, Guangdong province-based Shengyi Tech will keep a 62.93 percent stake in the unit.

In December 2019, the CSRC announced that it will start allowing companies already listed on the mainland to spin off subsidiaries for a separate, independent listing in Shanghai or Shenzhen. So far, over 50 firms have declared such an intention, mostly eyeing the Star Market and Shenzhen’s ChiNext Board which use the quicker registration-based system, but Shengyi Tech is the first to do so.

The funds will be used to upgrade its high-speed and high-density fifth-generation printed circuit board projects, develop its multi-layer printed circuit board capabilities, set up a research and development center and replenish working capital.

Shengyi Tech posted a 20 percent leap in net profit in the first three quarters last year from the same period the year before to CNY360 million (USD55.7 million) on revenue of CNY2.8 billion (USD433 million).

Shares of Shengyi Tech [SHA:600183] closed up 1.16 percent at CNY28.02 (USD4.34).

Editors: Xu Wei, Kim Taylor