Start-ups at hi-tech park in Shanghai quicken IPO preparation plans after CSRC reforms to domestic listing rules

President of Shanghai Shibei Gaoxin says three to four firms based in the Shibei Hi-Tech Park are expected to float each year between 2024-2028

Remarks come three weeks after CSRC announced sweeping changes to the rules governing new domestic share sales

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Shibei Hi-tech Park by Shanghai Shibei Gaoxin Group. Photo: Handout

Published: 6:30am, 23 Feb 2023

Technology start-ups at a major hi-tech park in Shanghai are expected to be some of the leading beneficiaries of China’s reformed initial public offering (IPO) mechanism as they fast track preparations for fundraising, according to an executive from the group that operates the park.

Chen Jun, president of state-owned Shanghai Shibei Gaoxin Group, told reporters in a media briefing on Wednesday that three to four companies based in the Shibei Hi-Tech Park it manages are expected to float shares on the mainland’s stock market each year between 2024 and 2028, compared to just one prospective IPO this year.

“The pace of stock market listings is set to pick up amid the implementation of the registration-based IPO system,” said Chen. “Promising tech start-ups will actively seek to raise funds on the domestic stock exchanges.”

Chen’s remarks come three weeks after the China Securities Regulatory Commission (CSRC) announced sweeping changes to the rules governing new share sales, which will facilitate fundraising for companies while giving market forces full sway over share pricing.

The securities regulator solicited public opinion on the new rules until February 16, before officially implementing them the next day. The CSRC said it would fully relinquish its role in reviewing IPOs, transferring the vetting power to the country’s stock exchanges.

Companies selling shares on the Shanghai and Shenzhen stock exchanges will for the first time be given the freedom to price their shares based on market demand. Listing requirements, such as track records for revenue and profit, have been eased to pave the way for companies from fledgling industries to go public.