Shanghai Fudan Microelectronics, the second H-share firm listed on the Growth Enterprise Market (GEM), has received a waiver from the mainland government to issue shares at below HK$1. The company is the first to receive such a waiver, which will make it the first penny H-share counter in Hong Kong. The Shanghai Fudan University-backed integrated circuit design and distribution company plans to sell 125 million shares at 80 HK cents each to raise HK$100 million from an initial public offering on the GEM. The company had originally planned to issue its shares at between 80 HK cents to HK$1.20. Fudan Microelectronics is the ninth GEM company to join the recent penny-stock trend, which attempts to lure investors' interest with a low-price strategy. Shares in Fudan Microelectronics are scheduled to start trading on August 4. Under Company Ordinance rules, mainland registered companies are not allowed to issue shares below HK$1 par value and the number of shares to be issued would be limited to the total paid-up capital. Unlike other H shares, Fudan Microelectronics has successfully applied for a waiver from strict compliance to the mainland's Company Ordinance on par value. It has a par value of 10 HK cents, according to its listing sponsor BOCI Asia. 'If we don't have this waiver, we can only issue about five million shares at about HK$18 each, this will make it very difficult to sell the share and will also affect its liquidity,' said Sandy Yip, vice-president of BOCI Asia's corporate finance unit. 'Unlike H shares on the mainboard, GEM H shares are small in market capitalisation and the HK$1 par-value constraint would have a significant impact on its pricing and liquidity,' she added. Ms Yip said the mainland's regulatory bodies changed their view after the company explained the technical difficulties involved with the par-value constraints. In contrast, the mainland's Company Ordinance forced newly listed Beijing Beida Jade Bird Universal Sci-Tech to issue only 24 million shares at HK$11 each. Beida Jade Bird originally set its pricing range at HK$17.80 to HK$19 but trimmed its issue by as much as 44.4 per cent after fund managers complained its pricing was too expensive. Beida Jade Bird Universal chairman Xu Zhendong said the company was applying for a waiver on the par-value regulation and planned to split its shares after the China Securities Regulatory Commission granted a waiver in a bid to develop liquidity of stock. Yesterday, investors greeted Beida Jade Bird with a 13.18 per cent surge on its debut. The company closed at HK$12.45 a piece, close to its intraday high of HK$12.60. Trading was thin with only 6.48 million shares changing hands. State-owned Sanjiu Enterprise Group plans to float its Sichuan-based traditional Chinese injection medicine-manufacturer - Ya'an Sanjiu Pharmaceutical - on the GEM board later this year. Meanwhile, GEM-listed mobile-phone distributor Fortunetele.com said yesterday it planned to acquire a 30 per cent interest in an Internet service provider Amonic Solutions for HK$7 million, which includes an option to top up its interest to 50 per cent.