Three companies set for sci/tech innovation board pass Shanghai exchange review

Preparatory work for the science and technology innovation board took an important step forward with the first three companies passing the Shanghai Stock Exchange's review on Friday.

Shenzhen-based small molecule innovative medicines maker Chipscreen Biosciences, semiconductor material provider Anji Microelectronics (Shanghai) Co Ltd and Suzhou-based machine vision technology provider TZTEK saw their applications go public on the new tech board approved at a review conference on Friday as scheduled.

As long as these three companies get the final green light from the China Securities Regulatory Commission, they will become the first companies to be listed on the much anticipated new tech board.

The prospectus shows that Chidamide, which is used for peripheral T-cell lymphoma, contributed about 99 percent to the annual income of Chipscreen Biosciences. The simple product portfolio might indicate risks, said the prospectus.

Anji Microelectronics saw its annual income reach 248 million yuan ($36 million) in 2018, according to its prospectus. With the initial public offering, the company intends to seek 304 million yuan in financing, among which the majority 120 million yuan is planned to expand its polishing agent production base.

Public information shows that TZTEK's product portfolio covers defect detecting and automatic production assembly, as well as smart warehousing and logistics. Income from Apple Inc accounted for 28.5 percent of its turnover in 2018. The reliance on major clients might be a possible risk, the prospectus said.

"It took the Shanghai Stock Exchange about two months to finish the review. In this sense, the review and registration time needed for companies taking an IPO to the new tech board will last about three months, which is much more efficient than that of the other boards in the current A-share market," said Dong Dengxin, director of the Finance and Securities Institute at Wuhan University.

Dong further estimated that the first batch of successful applicants for the tech board are likely to go public at the end of this month or early July, depending on the number of such companies.

President Xi Jinping announced in early November that China would launch a science and technology innovation board at the Shanghai Stock Exchange and pilot a registration system for listed companies. The Shanghai bourse started accepting the first applications on March 22.

Up to this date, a total of 119 companies have sent their applications for the new board, among which 17 companies' applications have been dealt with, 99 companies completed their inquiry by the Shanghai bourse and another three companies' had their applications suspended.

As the Shanghai Stock Exchange has planned, the bourse will hold two more review conferences for six companies on June 11 and 13.