Themed “The future is here, the new path of the science and technology innovation board,” a forum focused on the sci-tech board was held at Qianhai SZ-HK Fund Town on Friday, gathering over 200 attendees including industry experts in finance and technology.
“The launch of the science and technology innovation board has a special background. Our head of State announced it during the first China International Import Expo in Shanghai, so I believe it’s a national strategy. The guideline on establishing a science and technology innovation board focuses on six strategic emerging sectors, most of which are products that others don’t sell us or that our country lacks,” said a general manager of an investment company who wished not to disclose his name.
The anonymous general manager said that the biggest highlight of the sci-tech board is the registration-based system. “Under the pilot registration system, eligible companies can become listed by filing the required documents. What’s the benefit for the primary market? I think it will help crash the bubbles of the primary market and help investors return to rational investment and value investment because people will evaluate how valuable a company is.”
For Liu Yimin, managing director of Cowin Capital, the sci-tech board is of great benefit for venture capital institutions. It will also provide a great opportunity.
“The sci-tech board is more tolerant in terms of the amount of enterprise profit required, which is in line with the large amount of investment in research and development in the early stage of hard and core technologies. These types of companies may not generate sales revenue or profit very fast,” said Liu.
“Also, regarding new medicine, it takes at least 10 years and US$1 billion to develop a new medicine. During these 10 years, there is basically no profit. [In the past] Companies couldn’t get listed on the Chinese mainland, but lots of these companies are on NASDAQ,” said Liu.
“We need to stick to long-term investment. The rules of the sci-tech board will push investment organizations to prolong their investment cycle and look forward, not just follow suit,” said Jin Yuhang, CEO of Rising Investments.
President Xi Jinping announced in his keynote speech at the opening of the first China International Import Expo in Shanghai on Nov. 5 last year that the Shanghai Stock Exchange would launch a new science and technology innovation board, and the new trading platform would experiment with a registration-based system for listed companies.
China’s securities regulator released a guideline on establishing a science and technology innovation board at the Shanghai Stock Exchange on Jan. 30.
According to a statement by the China Securities Regulatory Commission, the board focuses on companies in the high-tech and strategic emerging sectors, such as new-generation information technology, advanced equipment and new materials.
The establishment of the science and technology innovation board is an important move for improving the basic system of the capital market, carrying out new development ideas and deepening supply-side structural reform.