Introduction
The Shenzhen Stock Exchange (SZSE) is one of two stock exchanges in mainland China. It was founded on December 1, 1990, and began trading operations on July 3, 1991. The SZSE's Growth Enterprise Board (GEB) was launched in 2009 to provide a platform for innovative, high-growth companies in China. This board is similar to the Nasdaq in the United States and the AIM Market in the United Kingdom. Companies listed on the GEB are primarily from high-tech, bio-tech, and other emerging industries.
Listing Requirements
In general, companies seeking to list on the GEB must meet the following criteria:
- The company must have existed for at least three years.
- The company must have generated net profits for at least two of the three years preceding the listing application.
- The company's total assets must be valued at no less than RMB 20 million.
- The company must have a net asset value of at least RMB 10 million.
- The company must have no less than 200 shareholders with at least RMB 500,000 in holdings each (or 50 shareholders with at least RMB 5 million in holdings each).
- The company must have a market capitalization of at least RMB 200 million.
- The controlling shareholder or actual controller must have held shares for at least 12 months prior to the listing.
Listing Process
The listing process for companies seeking to list on the GEB is comprised of several stages. First, the company engages an underwriter to manage the listing process. The underwriter conducts a due diligence investigation of the company to ensure that all disclosures are accurate and complete. The underwriter then prepares a prospectus, which contains detailed information about the company and its proposed public offering.
Once the prospectus is approved by the SZSE, the company files an application for examination and approval of the issuance and listing with the China Securities Regulatory Commission (CSRC). The CSRC reviews the application and, if it deems the company to be suitable for listing, approves the offering.
After the CSRC approval, the company conducts a roadshow to market the offering to potential investors. Once the offering is successfully marketed, the company lists its shares on the GEB and becomes a publicly-traded company. The company is required to comply with ongoing financial reporting and other disclosure requirements after listing.
Conclusion
The GEB provides a platform for innovative high-growth companies to obtain capital and resources to continue their growth. The listing requirements are designed to ensure that only qualified companies are eligible to list on the exchange. The listing process is rigorous and transparent, providing investors with confidence in the quality of the companies listed on the exchange.
As an important component of China's capital market, the GEB is expected to continue to play a vital role in supporting the development of innovative startups and high-growth companies in the years to come.
