Scientific and technological innovations usher in new era for economic development
The Shanghai Stock Exchange launched in November 2019 a sci-tech innovation board, with a registration system being piloted for the listing of companies.
By Dec 12, 2019, 65 companies had been listed on the science and innovation board of the Shanghai Stock Exchange, with total turnover of 1.2 trillion yuan ($168 billion).
This first A-share initial public offering (IPO) allowing dual-class shares resulted from the optimization of listing standards on the sci-tech innovation board, or STAR Market, which debuted on the Shanghai Stock Exchange in July.
Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, said the IPO registration of UCloud reflects the STAR Market's inclusiveness to innovative enterprises, which is unprecedented in the history of the A-share market.
"The biggest innovation of China's capital market in 2019 was the launch of the STAR Market with the registration-based IPO system. This marks the determinant battle of capital market reforms and has profound implications," Dong said.
For many tech firms with strong management teams, the dual-class share structure is critical, as it will guarantee founders' control over a company despite enormous equity financing, Dong said.
In recent years, universities and research institutes have produced many laboratory achievements, which need to be put onto the stock market.
An industry insider said that the scientific and technological achievements of Chinese universities and research institutions are abundant and increasing gradually, but the quantity of transformation is still relatively small, and scientific and technological achievements with high conversion rate are even rarer.
For the STAR Market to become a real success, several reforms should be pushed ahead, such as introducing more long-term institutional investors, and formulating policies to address concerns of red-chip companies considering listing on the new board, said a report from the Evergrande Research Institute.
Shares of five companies debut on the STAR Market Nov 5, 2019. [Photo/Xinhua]
