Jul 24, 2019 08:25 PM

Another Company Walks Away From New Tech Board

HeJian was the only one of the nine initial applicants to the new board to be operating at a loss. Photo: IC
HeJian was the only one of the nine initial applicants to the new board to be operating at a loss. Photo: IC

A second company has withdrawn its application to list on China’s new Nasdaq-style high-tech board, which debuted this week to much fanfare.

By bowing out, chipmaker HeJian Technology (SuZhou) Co. Ltd. has followed in the footsteps of Beijing Papaya Mobile Technology Inc., the first company to withdraw its application to the so-called STAR Market on the Shanghai Stock Exchange.

The new high-tech board was created in part to lure technology firms to list in Shanghai rather than overseas. It offers a registration-based listing process designed to have less regulatory red tape than other major mainland boards and will allow listings by money-losing companies.

The stock exchange’s website showed on Tuesday that HeJian’s application status was “terminated.” Papaya Mobile, a Beijing-based internet marketing company, dropped its application on July 8.

Taiwan-based United Microelectronics Corp. (UMC), which currently holds an indirect stake of 98% in HeJian, issued a statement Sunday that said it agreed with HeJian’s proposal to withdraw from the listing. It said the decision came after the exchange made multiple inquiries about HeJian’s listing with its sponsor, which finally suggested the withdrawal because the parties were unable to reach any “satisfying consensus.”

HeJian was the only one of the nine initial applicants to the board to be operating at a loss. In 2018, the company reported an annual net loss of 2.6 billion yuan ($385 million), more than double its loss in the previous year. It had aimed to raise 2.5 billion yuan through its initial public offering (IPO) on the board.

UMC is the world’s third-largest contract chipmaker, behind Taiwan Semiconductor Manufacturing Co. Ltd. and the U.S.’s Global Foundries Inc.

Based in East China’s Jiangsu province, HeJian was founded in 2001 and started producing chips in 2003. It currently has a monthly capacity of 60,000 wafers and employs more than 2,000 people, according to its website.

It is worth noting that the government has been supporting HeJian and its two subsidiaries through generous grants as part of its policy to develop the domestic integrated circuit industry. The manufacturer received 1.76 billion yuan in government subsidies in 2018 alone.

Papaya Mobile withdrew its listing application after the bourse said it had concerns about Papaya’s core technology and business model, as well as whether the operational and financial details reported by the company were accurate.

In May 2016, Papaya Mobile went public on China’s over-the-counter stock market. That December, it decided to delist for “operation and development strategy adjustments.”

Isabelle Li contributed to this report.

Contact reporter Jason Tan (

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