Xi Jinping’s trillion-yuan baby, the Star Market, is poised for the next spurt of growth. Here’s why

In the first of a four-part series, we look at the changes that have propelled China’s stock market into the world’s top performer this year

The Star Market, conceived and created within eight months, has expanded into Asia’s largest growth market after a year in operation, with 133 listed stocks valued at US$400 billion

Reading Time:6 minutes

Daniel Ren,Zhang Shidong,Yujing LiuandEnoch Yiu

Published: 4:00am, 25 Jul 2020Updated: 11:25am, 25 Jul 2020

Ji Xinhua is walking on clouds. Two months before his 41st birthday, his company UCloud Information Technology overcame the hurdle that had tripped up dozens of larger Chinese companies and driven them half a world away to New York to raise funds.

UCloud, which helps customers store computer data in the cloud, became the first company with a dual-class shareholding structure approved to list on China’s Star Market. UCloud’s shares, offered at 33.23 yuan (US$4.73), more than doubled during their trading debut in Shanghai and soared to a record 115 yuan by the 16th trading day.

That made Ji, who owns 50.8 million UCloud shares, or 12 per cent of the company, a multimillionaire, one of more than 130 minted by the Nasdaq-style market in the 12 months it’s been operating.

“We may have opened a floodgate for other promising tech companies to access funding on the domestic market,” Ji said in a phone interview with the South China Morning Post. “Many friends said at that time that they would seek overseas IPOs if we failed to pass through the review.”

Ji Xinhua, founder, chairman and chief executive officer of UCloud Information Technology. Photo: Company handout

The significance of UCloud’s successful initial public offering (IPO) cannot be overstated. Dozens of China’s biggest start-ups including the internet search engine Baidu and this newspaper’s owner Alibaba Group Holding were driven to New York over the past two decades to seek funding.

Now, as relations between the world’s two largest economies deteriorate to their worst in decades, and as US politicians are taking a strident stance to fence off Wall Street, more and more Chinese companies are choosing to stay home.