Pilot aims to aid companies to list on the mainland

Huang Yixuan
High-tech or strategic emerging companies, including the Internet, big data, cloud computing, and artificial intelligence, are beneficiaries of the program.
Huang Yixuan

Nearly 40 innovative companies qualify for a pilot program launched by the China Securities Regulatory Commission to help them go public in the mainland market or to issue depository receipts, according to its statement.

The program is aimed at helping companies in high-tech or strategic emerging industries, including the Internet, big data, cloud computing, artificial intelligence, software and integrated circuit, high-end equipment manufacturing, and biological medicine, to issue shares or depository receipts on Chinese mainland.

For foreign-listed Chinese companies to become pilot companies, the program requires them to have a market value of no less than 200 billion yuan (US$31.88 billion). This move paves the way for overseas-listed technology giants such as Alibaba, JD.com, Tencent, Baidu and NetEase to issue domestic CDR (Chinese Depository Receipt).

Innovative companies not listed abroad need to have a valuation of no less than 20 billion yuan and an operating incomes of not under 3 billion yuan to qualify for the pilot program.

Meanwhile, around 30 unicorn companies (startup companies with a value of over US$1 billion) also qualify for the program, according to data from the Ministry of Science and Technology.

The Torch High Technology Industry Development Center of the ministry and Greatwall Strategy Consultants jointly released a 2017 development report on Chinese unicorn companies which showed China has 164 unicorn companies with a total valuation of US$628.4 billion.

Ten of them are super unicorns with valuations of over US$10 billion — Ant Financial (US$75 billion), Didi Chuxing (US$56 billion), Xiaomi (US$46 billion), Aliyun.com (US$39 billion), Meituan.com (US$30 billion), CATL (US$20 billion), Toutiao.com (US$20 billion), Cainiao (US$20 billion), Lufax (US$18.5 billion) and Jiedaibao (US$10.77 billion).

Unlisted firms can also become pilot companies if their revenue grows rapidly, conduct independent research and development, boast leading technology, and have relative advantages in their industries, the statement said. CSRC will specify standards for these pilot enterprises.

Companies taking part in the program must treat domestic and foreign investors equally, according to the statement. Their prospectuses should reveal voting right differences and any special company structure arrangements.

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