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The securities regulator in China is intensifying efforts to expedite the listing process for innovative companies that have yet to turn a profit on Shanghai’s Nasdaq-style Star Market. This acceleration follows the relaxation of certain rules implemented in June, with three additional firms receiving approval for initial public offerings.
Wuhan Healthgen Biotechnology, a manufacturer specializing in plant-derived recombinant protein pharmaceuticals, was the first to apply under the newly reinstated fifth listing standard introduced in June. Wu Qing, chair of the China Securities Regulatory Commission, announced during a press briefing that its IPO application was approved on July 1.
Additionally, BeBetter Med, based in Guangzhou, is a research and development company currently in the clinical-stage for seven different drugs and received approval for its IPO on August 7. Xi’an’s semiconductor products manufacturer, ESWIN Material Technology, also secured approval on August 29, Wu added.
Reforms in China’s capital markets, such as reviving the fifth listing standard for the Star Market, aim to better support tech firms with significant breakthroughs, ongoing R&D investments, and promising business prospects. This pathway allows unprofitable companies to go public without traditional profit or revenue requirements, provided their core products or services have official approval and show notable market potential and progress milestones. These measures were announced on June 18.
Several other unprofitable innovative firms, such as Shenzhen-based Insight Lifetech and Zhuhai-based Trinomab Pharmaceutical, are making progress in the IPO process following the reforms. The Star Market is also evaluating applications from other similarly situated companies outside of the fifth standard, including Shanghai’s MetaX Integrated Circuit, Zhaoxin Semiconductor, and Beijing’s Moore Threads Intelligent Technology.
The fifth listing standard offers a specialized route that imposes no profit or revenue hurdles but requires that the company’s core business or products gain approval from relevant government authorities and demonstrate strong market potential along with key development milestones.
Since its launch in July 2019, the tech-oriented Star Market has seen roughly 20 companies go public under this pathway. However, activity on this route slowed significantly, with no listings since June 2023, when Chongqing-based Genrix Biopharmaceutical listed.
Similarly, Shenzhen’s ChiNext board has adopted this approach, approving its first unprofitable applicant, Dapu Microelectronics (also known as DapuStor), on June 27. The company moved to the inquiry stage by July 6.
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