Number, variety of STAR companies to increase

The number and variety of listed firms on the Shanghai Stock Exchange's STAR Market are expected to grow rapidly this year due to clarified standards and government support, Shanghai Daily learned on Thursday.

Shanghai will encourage more companies and capital to participate in the STAR Market, as a step toward boosting “integrated development” and building the city into a finance, technology and innovation center, said Shanghai Party Secretary Li Qiang.

At present, 94 firms are listed on the STAR Market, including two firms with market value over 100 billion yuan (US$14.3 billion). They are Beijing Kingsoft Office Software and Montage Technology Co, a Shanghai-based semiconductor firm.

According to information on the Shanghai exchange's website, candidates for STAR Market listing now include financial technology and technical services firms.

This was the first time the exchange has offer such clarification regarding listing candidates for the new board since its debut last year. 

The board already includes companies in the information technology, biomedicine, high-end equipment and new-energy industries.

Also last month, China's securities regulator launched a new policy on valuation standards for “high-technology and innovation firms” on the SSE STAR Market, which are expected to accelerate new offerings. 

The evaluation standard comprises three requirements: research spending over 5 percent of revenue or over 60 million yuan annually; over five invention patents related to major business; and revenue growth over 20 percent annually in the latest three years, or over 300 million yuan in the latest year.

The valuation standards clarify the IPO process, which will cut costs and time for IPO preparation in the STAR Market, said securities analysts.