BEIJING, Aug. 24 (Xinhua) – Registration-based initial public offering (IPO) reform on ChiNext, China's Nasdaq-style board of growth enterprises materialized Monday alongside the listing of 18 new IPO companies on the board.
The reform is carried out upon IPO applications filed both before and after it was announced early in June, and it accrued experience for expected all-around implementation of registration-based IPO reform in China's capital market.
-- Better facilitation to real economy
Zeng Peng, integrated investment and research director for equity investment with Bosera Funds held that registration-based IPO reform on ChiNext loosened listing conditions for companies and enabled some new modes and new businesses to participate in financing on the board, allowing ChiNext from system design to serve the real economy in a broader manner.
The ChiNext, where a registration-based IPO reform already took effect since mid June, will still be positioned to servicing business innovation by supporting development of strategic emerging industries and high-tech sectors and profound integration of traditional industries with new technologies, new sectors, new modes and new business.
On the board, distribution and supply of key factors needed in innovation-driven development such as capital and talents are also optimized, including comprehensive improvement of mechanisms for IPO and refinancing registration, thresholds, pricing, etc. to better satisfy the flexible financing demand of innovation-driven businesses and startups.
Taking listing conditions as an example, diversified listing conditions are formulated after the registration-based IPO reform to support innovation-driven businesses and startups of different growth stages and different types to go public on ChiNext.
For instance, requirements for new IPO companies having no losses to offset by the end of the latest fiscal year are canceled while listing of qualified companies with special ownership structure and red-chip companies are supported.
The successful materialization of registration-based IPO reform on ChiNext will further improve the capacity and efficiency of capital market in serving the real economy, help optimize direct financing system and increase equity financing, and enhance risk resilience of enterprises, said Cai Zhiwei, manager with Rongtong ChiNext index fund.
-- Improving quality of listed companies
Wu Ying, board chairman of Yangling Metron New Materials Inc. (300861.SZ), a Chinese electroplated diamond wires manufacturer which went public on ChiNext on Monday, thought that under the registration-based IPO system, enhanced corporate information disclosure will make market players be able to see more transparent listed firms on ChiNext and reformed delisting rules will shorten and simplify the delisting process of listed companies.
These reform measures, together with others, are all reflections of a maturing capital market and will facilitate competitive quality firms in gaining rapid financial resources for business expansion, added Wu.
Generally, the registration-based IPO reform on ChiNext will significantly propel systemic fairness ahead and as firms with competitive strengths will obtain more financial resources, a pleasant market-oriented resource distribution pattern can be formed, noted Xiao Ruijin, fund manager with a sci-tech innovation-themed fund of Bosera Funds.
For China's innovation-driven businesses and startups, the registration-based IPO reform on ChiNext means enterprises do not have to realize accounting profit in the current period, said Xiao.
In Xiao's opinion, as main regulatory and supervisory rules are more in line with those of developed capital market abroad,China's sci-tech-driven industries will enter a new stage and market-oriented cultivation will greatly speed up sector development, Xiao believed. (Edited by Duan Jing with Xinhua Silk Road, duanjing@xinhua.org)
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