The Shanghai Stock Exchange Science and Technology Innovation Board, known as the Star Market, is an attempt by China to kill two birds with one stone: lay a foundation for a healthy financial ecosystem with world-class regulatory mechanisms, while also galvanizing the local technology sector by opening a direct channel to capital. The latter aim is a truly vital one amid the private equity ‘capital winter’ and the recent global trade and tech tussles.
Many novelties appeared with the new venue. Previously, it normally took Chinese companies two to three years, a huge stock of patience and a tiny bit of luck to successfully go public locally. The new vetting system has shrunk the review process duration to just a few months. At the same time, the tech startups experienced a huge relief from the specific terms of the listing standards. For one, the Star Market is the first board in the country’s financial sphere that doesn’t require its applicants to be profitable.
EqualOcean analyzed these and other traits of the new board in the research report ‘China’s ‘Star Market’: A New Engine for the Budding Tech Sector.’
As for this, our first quarterly overview, it is designed to provide insights on the marketplace ‘at runtime.’ Here, we focus on both the technical and fundamental aspects:
• Chapter 1 (‘First steps of the ‘Chinese Nasdaq’: numbers, patterns and industries’) is devoted to the market performance in the last quarter of 2019; it also includes a comprehensive cross-industry comparison.
• Chapter 2 (‘The path of market reform: rules, upgrades and stories’) presents a complete picture of the recent regulatory shifts and the most important narratives affecting the Star Market as well as the whole Chinese financial ecosystem.
• To top it all off, we’ve chosen a handful of well-performing stocks (‘Standing out from the crowd’) and several selected firms from the current IPO pipeline (‘The rising stars’), dissecting the businesses behind them.
Note: to compile lists for chapters 3 and 4, EqualOcean used a diverse set of variables falling into a dozen categories, including PE/VC investment history, financial records and R&D footprint. These selection criteria were not affected by any commercial links between the firm and its existing clients.