The fourth set is implemented, with the ChiNext board welcoming another "unprofitable" listing standard.

After countless calls, it finally emerges.

On April 10, the China Securities Regulatory Commission (CSRC) officially released the "Opinions on Deepening the Reform of the ChiNext Board and Better Serving the Development of New Quality Productive Forces," marking the official implementation of the fourth set of listing standards for the ChiNext Board.

Specifically, the newly introduced fourth set of listing standards includes two indicators:

First, "Expected market value no less than 3 billion yuan, operating revenue in the past year no less than 200 million yuan, and a compound annual growth rate of operating revenue over the past three years no less than 30%," mainly applicable to companies in emerging industries;

Second, "Expected market value no less than 4 billion yuan, operating revenue in the past year no less than 200 million yuan, total R&D investment over the past three years no less than 100 million yuan and accounting for no less than 15% of revenue," mainly applicable to companies in future industries.

This is also the first time since the third set of listing standards that the ChiNext Board has introduced listing standards that do not require profitability.

In fact, the market has long anticipated the implementation of the fourth set of standards.

In March this year, CSRC Chairman Wu Qing revealed that in the upcoming reform of the ChiNext Board, a more precise and inclusive set of listing standards will be added to support the development of new industries, new business models, and new technology enterprises, as well as high-quality and innovative companies in new consumption and modern services sectors to issue and list on the ChiNext Board.

With enhanced inclusiveness on the ChiNext Board, the market inevitably worries whether this will lead to competition with the STAR Market.

According to the CSRC spokesperson, the fourth set of listing standards added to the ChiNext Board focus on the introduction, transformation, and application of cutting-edge technologies, forming a certain differentiation from the relevant listing standards of the STAR Market in terms of indicator settings, applicable industries, and stages of industrial development.

"Going forward, the CSRC will guide the Shanghai and Shenzhen stock exchanges to actively leverage the respective characteristics and advantages of the two innovation boards ('Two Boards'), develop collaboratively and form synergy, further expand the capital market's coverage for serving the real economy, and strive to achieve a reform effect of '1+1>2'." according to the CSRC.

Improved inclusiveness does not mean a substantial lowering of the review threshold.

For the uncertainty risk connected to high-growth companies not yet profitable, those not profitable at the time of IPO will have a special "U" marker added before profitability is achieved, continuously alerting investors to risk; controlling shareholders, actual controllers, and directors, supervisors and senior managers will also be subjected to restrictions that prohibit them from reducing pre-IPO shares within three full accounting years from listing.

The institutional exploration receiving much attention in this round of reforms also includes piloting the practice of local governments pushing information about companies proposed for IPOs to the CSRC and Shenzhen Stock Exchange.

This is because local governments have a better understanding of the business operations, compliance, and reputation of enterprises within their jurisdiction; by providing company information as a reference, review departments can more timely and fully grasp the status of companies planning to list, further improving the quality and efficiency of the review and registration process.

It is worth mentioning that the scope of this pilot is limited to companies that have applied for IPO counseling record and intend to submit their IPO application under the third or fourth set of listing standards for the ChiNext Board, and the pilot is not mandatory.

The CSRC clearly points out that local government-information submission is not a required procedure for companies to issue and list. The CSRC, Shenzhen Stock Exchange and local governments do not set targets for submitting company information, nor do various levels of local governments force subordinate units to submit company information, and companies cannot be required to treat government submission of information as a necessary procedure for IPO. For companies not submitted by local governments, the CSRC and Shenzhen Stock Exchange will continue to conduct reviews and registrations according to existing procedures.

With the introduction of the fourth set of standards, who will be the "first to eat the crab" is currently a focus of attention.

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