Accelerate the attraction of outstanding listed resources, with the ChiNext Board and the STAR Market jointly promoting new policies for the listing of unprofitable enterprises

The simultaneous introduction of new policies allowing unprofitable companies to list on the STAR Market and ChiNext Board emerged as the most attention-grabbing announcement among the heavyweight policy signals released at the 2025 Lujiazui Forum.

"There's a noticeable optimization in review standards, with regulators demonstrating greater inclusiveness toward high-growth companies' listings than before," remarked a mid-level investment banking executive at a securities firm when discussing the latest policies. This sentiment stemmed from the landmark speech delivered by CSRC Chairman Wu Qing at the 2025 Lujiazui Forum.

The exceptional market performance of Hong Kong-listed companies in sectors like new consumption and innovative pharmaceuticals this year underscores how attracting quality listing resources has become a critical factor for high-quality capital market development. The concurrent policy rollout for unprofitable companies on both boards clearly reflects enhanced tolerance for promising growth enterprises.

On June 18, CSRC Chairman Wu Qing delivered a keynote speech at the Lujiazui Forum, unveiling a series of policy signals regarding reforms on ChiNext and STAR Market, as well as mergers and acquisitions.

Wu Qing outlined three major reform directions in his speech:

First, deepening the "1+6" reform on the STAR Market:including establishing a Sci-Tech Growth Tier, reinstating the fifth set of listing standards for unprofitable companies, and piloting an IPO pre-review mechanism;

Second, activating the third set of standards on ChiNext:supporting listings by high-quality unprofitable innovative enterprises;

Third, implementing new M&A regulations:introducing measures such as phased equity payment and simplified review procedures.

Market response has been overwhelmingly positive, with regulatory statements sending strong signals of support for technology innovation firms. This foreshadows increased activity in A-share market capital operations like listings and restructuring for tech innovators. "The policy's core lies in enhancing inclusiveness and service capabilities for genuinely innovative, high-risk, high-growth-potential enterprises," commented an industry insider.

Simultaneous launch of unprofitable company listing policies on STAR Market and ChiNext

Wu Qing stated that the STAR Market's "testing ground" role would be better leveraged through the intensified "1+6" reform measures. These will comprehensively advance investment-financing reforms and investor protection while accelerating the development of a capital market ecosystem more conducive to supporting comprehensive innovation.

The "1" core measure:establishing a Sci-Tech Growth Tier on the STAR Market and reinstating the fifth set of listing standards for unprofitable companies. This will more precisely serve high-quality tech firms with significant technological breakthroughs, substantial ongoing R&D investment, and promising commercial prospects, while implementing arrangements for strengthened information disclosure and enhanced investor suitability management.

"Six" supporting reform measures:

First, for enterprises eligible under the fifth set of criteria for the Science and Technology Innovation Board (STAR Market), a pilot system for introducing senior professional institutional investors will be implemented;

Second, a pilot IPO pre-review mechanism will be launched for high-quality technology enterprises;

Third, the scope of application for the fifth set of criteria will be expanded to support more enterprises in cutting-edge technology fields such as artificial intelligence, commercial space, and the low-altitude economy;

Fourth, support will be provided for unprofitable technology enterprises under review to conduct activities such as capital increase and share expansion targeted at existing shareholders;

Fifth, the refinancing system for STAR Market companies and the criteria for identifying strategic investors will be improved;

Sixth, investment products and risk management tools for the STAR Market will be increased.

Regarding the ChiNext Market, Wu Qing stated that the China Securities Regulatory Commission (CSRC) will officially launch the third set of criteria on the ChiNext Market to support the listing of high-quality unprofitable innovative enterprises.

Further optimization of M&A and restructuring mechanisms

Wu Qing placed great importance on issuance and M&A aspects, and promoted the implementation of relevant new initiatives.

Wu Qing expressed that innovation and development require scientists, entrepreneurs, and investors, and even more so, the collaboration among them. China's capital market has undergone profound structural changes, effectively promoting a virtuous cycle of technology, capital, and industry. In recent years, the CSRC has conscientiously implemented the innovation-driven development strategy, deepened adaptive reforms in issuance, M&A, and restructuring, optimized the supply of systems and products, providing important support for supporting technological innovation and industrial transformation and upgrading.

Wu Qing stated that the CSRC will ensure the implementation of the "Six M&A Guidelines" and the Administrative Measures for Major Asset Restructuring, promote the implementation of new initiatives such as the installment payment mechanism for share consideration and the simplified review process for restructuring, study and improve the implementation procedures for equity incentives of publicly listed firms to enhance convenience and flexibility, and drive publicly listed firms to continuously enhance their core competitiveness and operating performance, thereby better rewarding investors in high-quality development.

Strong market response: Institutional breakthroughs in technological innovation

In the view of Wang Jiyue, a senior investment banker, the capital market is a tool for implementing national strategies to support the real economy. The important statements made by regulators are in line with the requirements of central policies, signaling strong support for science and technology enterprises. The core lies in achieving the primary goal of improving the quality of publicly listed firms by supporting high-quality enterprises and facilitating the development of industry chains. Under this goal-oriented approach, various conditions set by regulations should adhere to the basic principle of "revising regulations if they fail to meet the goal."

He Nanye, another investment banker, pointed out that the CSRC announced a series of new policies today to support the listing of technology enterprises, presenting three core characteristics:

First, it has reopened the channel for unprofitable enterprises to list, allowing them to smoothly apply for listing, and this will be implemented simultaneously on the STAR Market and the ChiNext Market, with a broader scope and greater intensity, covering the two major stock exchanges in Shanghai and Shenzhen, and benefiting the two core regions of the Yangtze River Delta and the Pearl River Delta. This is a restart after the previous suspension of listing for unprofitable enterprises, with significant representative significance, indicating that regulators fully recognize the importance of unprofitable technology enterprises to domestic industrial transformation and technological leadership, and are determined to more vigorously support the listing of high-quality unprofitable enterprises.

Second, further optimize the listing review mechanism for technological innovation enterprises, accelerate the listing process, and enhance the certainty of listing. This once again reflects the regulators' emphasis on technological innovation startups and their anticipation of the sound development of technological innovation companies, the technological innovation industry, and the capital market.

Third, further enrich capital market tools, including science and technology innovation bonds, M&A and restructuring payment tools, etc., and accelerate the activation of the M&A and restructuring market to further promote the overall transformation of publicly listed firms towards technological innovation, enabling them and the capital market to become testing grounds and pioneers for China's technological innovation.

He Nanye emphasized that, from the perspective of regulatory policies and attitudes, the A-share market will see more active listings and restructurings of technological innovation enterprises in the future, which will be conducive to further releasing the support of the capital market for technological innovation development and accelerating the formation of a capital market and industrial structure dominated by technological innovation.

Reform Reshapes the Capital Market Ecosystem

Shen Meng, Executive Director of Chanson Capital, pointed out that advancing the institutional construction and optimization of the Science and Technology Innovation Board (STAR Market) and the Growth Enterprise Market (GEM) can not only help the capital market serve the real economy more efficiently but also create richer participation opportunities for investors and effectively safeguard their legitimate rights and interests. The introduction of new M&A regulations is also aimed at promoting publicly listed firms to optimize their asset quality, enhance profitability, and further strengthen the link between the capital market and the real economy.

"Currently, with the STAR Market taking the lead and the GEM working in coordination, supplemented by M&A and restructuring optimizations, a stimulus policy package {{referring specifically to the economic stimulus policies of the People's Bank of China}} focusing on 'hard technology and genuine innovation' is being implemented. This initiative significantly strengthens the capital market's precise support for core areas of new quality productive forces, particularly providing targeted empowerment for cutting-edge technology enterprises and high-quality unprofitable enterprises," a senior professional with 18 years of experience in the capital market remarked with emotion. The regulators are reshaping the logic of the capital market's favour by emphasizing technological breakthroughs, the authenticity of innovation, and stringent thresholds, with the core being to enhance inclusiveness and professional service capabilities for genuinely innovative, high-risk, and high-growth potential enterprises.

A senior non-banking chief analyst from a leading securities firm stated that establishing a growth tier for science and technology innovation and introducing listing standards applicable to high-quality unprofitable enterprises aim to provide more precise financing and listing pathways for enterprises at different development stages, scales, and with various industry characteristics. This move is not only an inherent requirement for deepening the registration-based IPO system reform and serving national strategies but also a key measure to enhance the competitiveness of mainland stock exchanges.

"High-quality publicly listed firms are the cornerstone of the healthy development of the stock market. After nearly two years of regulatory adjustments, the A-share market is expected to welcome a new round of expansion in the supply of high-quality assets. The active performance of the Hong Kong stock market in both the primary and secondary markets this year fully demonstrates that China is not short of high-quality assets, and that the supply of stocks is not the root cause of the market's weakness. The key lies in how to build a positive interaction ecosystem between capital and assets within the framework of a stock market with Chinese characteristics, which will be the foundation for achieving sustainable development in the stock market and is expected to become the key focus of market reforms in the next phase," said the aforementioned non-banking chief analyst.

Another non-banking analyst from a leading securities firm stated that the proposed "1+6" policy is expected to enhance market inclusivity and adaptability. By implementing measures such as establishing a Science and Technology Innovation Growth Tier, restarting the listing of unprofitable enterprises under the fifth set of criteria for the Science and Technology Innovation Board, and introducing the third set of criteria for the ChiNext Market, more innovative enterprises with development potential but yet to be profitable can enter the capital market for financing, expanding the service scope of the capital market and promoting the integration of scientific and technological innovation with capital. These reform initiatives will effectively drive the deep integration of scientific and technological innovation with capital, providing more adequate financial support for scientific and technological innovation enterprises, accelerating the transformation of scientific and technological achievements into real productivity, and promoting the rapid development of the technology industry.