May 27, 2019 08:27 PM

High Tech Isn’t a Must for China’s High-Tech Board, Experts Say

Investors monitor stock prices at a securities company in Shanghai in May 2018. Photo: VCG
Investors monitor stock prices at a securities company in Shanghai in May 2018. Photo: VCG

Some applicants to China’s highly anticipated high-tech board may not be very high tech, but that might not matter, tech industry observers said.

When the final rules for the board were announced in March, regulators laid out the financial requirements for companies to list, but didn’t exactly define what it means to be high-tech. Since then, some have wondered if some applicants, based on their limited spending on research and development, don’t exactly count as innovative companies developing advanced technology.

Even though neither the regulators nor initial public offering (IPO) sponsors have specified what it means to be a high-tech company, that doesn’t mean specific qualifications are necessary, Tu Zhengfeng, director of the strategic department of Shenwan Hongyuan Securities Co. Ltd., said at a forum in Shanghai over the weekend.

Among the high-tech board applicants, some have very advanced technology while some don’t, but valuing these firms depends more on the market than the review process, Tu said at the forum. “The companies have to be technology- or innovation-related, but we shouldn’t judge the companies’ valuation by the level of innovation,” he said.

Chen Weiwei, a deputy manager of state-owned Shanghai Zhangjiang Group Co. Ltd., which operates science and technology industrial parks, agrees with Tu. The high-tech board’s focus is on financial returns, rather than on pure innovation, and therefore, apart from technology and research and development capabilities, companies also need the potential to expand quickly in the market, she said at the forum.

The high-tech board was designed to support the development of not only companies with new technologies in emerging industries, but also high-quality enterprises with new business models in areas highly desirable to investors, according to a Shanghai Stock Exchange news release in March.

As of Friday, the exchange has accepted listing applications from 111 companies. Four of the applications have been suspended, three of which were from companies whose auditor was involved in a recent scandal.

Contact reporter Liu Jiefei (

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