Beijing bourse will shorten IPO process time and reduce costs

Tong Honglei, chairman of a Beijing-based smart archive provider, was pleasantly surprised when he heard of China's decision to set up a stock exchange to improve financial services for small and medium-sized enterprises like his business.

"I was excited to hear the country was establishing the Beijing Stock Exchange," said Tong, chairman of the Beijing Roit Intelligent Technology Co Ltd, which provides digital archive search solutions as well as services that enable automatic location and fetching of physical materials.

"The Beijing bourse is undoubtedly the first-choice listing venue for innovative SMEs like Roit," Tong added. "It will help us access capital in an easier, faster and more cost-efficient way."

The new bourse is projected to shorten the time it will take for Roit to get listed from three or four years to about two years, Tong said. It will also halve the financial costs of doing so, to more than 10 million yuan ($1.55 million).

President Xi Jinping announced on Sept 2 that China will set up a stock exchange in Beijing and build it into a major base for serving innovative SMEs. It will bring the total number of national stock exchanges to three in the Chinese mainland, including those in Shanghai and Shenzhen, Guangdong province.

Officials, experts and business leaders said setting up the Beijing bourse marks a major milestone for China in perfecting its multilayered capital market system while also supporting innovative SMEs and deepening the "dual-circulation "new development paradigm, the cornerstone of the country's latest five-year plan.

Xiao Chunan, executive director and sponsor representative of the China Renaissance Securities' investment banking department, said he has included the BSE as a new listing option for his corporate clients who are under pre-IPO tutoring.

"This is not only about adding one more listing option. It means that SMEs can consider filing an IPO earlier than before, thanks to the Beijing bourse's easing of listing requirements," Xiao said.

"Many of them no longer need so many rounds of pre-IPO financing as before. Instead, they are considering obtaining finance after getting listed, which will be much easier than as an unlisted company."