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New Shenzhen exchange to open

Companies approved for listing on China’s new NASDAQ-style Growth Enterprise Board will begin selling shares in their initial public offerings from this Friday, as regulators prepare to review more applications.

By yesterday, 10 companies had issued a prospectus for listing on the new board, run by the Shenzhen Stock Exchange, which is meant to nurture private companies that struggle to get financing in a system favoring big state enterprises.

The China Securities Regulatory Commission has approved all 13 companies that have applied to list shares. Two more batches are to be reviewed this week, Chinese state-run television reported.

No date has been announced for the start of trading on the new exchange, but news reports say it could be as early as next month.

It will be located in Shenzhen, the southern financial center near Hong Kong that is the site of the smaller of China’s two stock exchanges.

The companies that have issued a prospectus on the Shenzhen Stock Exchange’s Web site are: Qingdao Tgood Electric Co (青島特銳德電氣), Beijing Ultrapower Software Co (北京神州泰嶽軟件), Lepu Medical Technology (Beijing) Co (樂普北京醫療器械), Nanfang Ventilator Co (南方風機), Beijing Toread Outdoor Product Co (北京探路者戶外用品), Chongqing Lummy Pharmaceutical Co (重慶萊美藥業), Henan Hanwei Electronics Co (河南漢威電子), Shanghai Bestway Marine Engineering Design Co (上海佳豪船舶工程設計), Anhui Anke Biotechnology (Group) Ltd (安徽安科生物學工程集團) and Beijing Lanxum Technology Co (北京立思辰科技).

The companies — trading in pharmaceuticals, technology and software — plan to issue a total of 246.1 million shares and hope to raise more than 2 billion yuan (US$300 million), state media have reported.

The government received 108 applications for listing on the new board the day it started accepting proposals, July 26.

Although the size of the share offerings is dwarfed by those of much bigger companies on the main boards in Shenzhen and Shanghai, the exchange offers a new option for Chinese investors. Foreign investors are largely excluded from trading in yuan-denominated shares.
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