China gives further support for innovative companies in fund-raising

China launched a pilot program to aid innovative companies to go public in the mainland market or issue depository receipts, further strengthening the role of the capital market in implementing the innovation-driven development strategy, according to a government statement released today.

The State Council, China's cabinet, has approved the pilot prorgram for innovative companies in high-tech and strategic emerging industries, raised by the China Securities Regulatory Commission.

The qualified companies include those mastering core technology, having strong market presence, and starying in high-tech or strategic emerging industries such as the Internet, big data, cloud computing, artificial intelligence, software and integrated circuit, high-end equipment manufacturing, and biological medicine, according to the statement.

They are also required to be innovative companies which have reached a considerable scale, with businesses in line with the national strategy in industry development.

Among the pilot companies, the standard for the large-scale foreign-registered Chinese companies ("red chip" companies), is that their market value should be no less than 200 billion yuan (US$31.88 billion). 

As for the innovative companies not listed abroad, including those registered in China and in foreign countries, they should post the operating incomes not less than 3 billion yuan and valuations not less than 20 billion yuan. Or they can also become pilot companies if showing rapid revenue growth, independent research and development, international leading technology, and relative advantages in the horizontal competition.

The pilot companies may, in accordance with relevant regulations and their own practice, choose to apply for listing of shares or depositary receipts.

Pilot red chip enterprises are allowed to issue depositary receipts in the domestic capital market. Red chips with the conditions of going public can apply for issuing shares in the mainland, according to the statement.