(Yicai) Dec. 30 -- Shanghai’s Star Market, which opened for trading with 25 companies in 2019, carved another milestone today as MaxOne Semiconductor Suzhou became the 600th business to list on the Nasdaq-like exchange.

Since its first day in July 2019, Star Market-listed firms have banked CNY955.7 billion (USD136.5 billion) through initial public offerings and CNY213.9 billion via additional capital raises, bringing the total to more than CNY1.1 trillion (USD157.2 billion).

A Star Market with 600 technology companies can create significant industrial clustering and foster a healthy ecosystem for mutual growth, Tian Xuan, head of Tsinghua University’s National Institute of Financial Research, told Yicai. It also attracts capital, talent, and other resources into hard-tech sectors, encouraging more firms to pursue core tech research and innovation.

The companies traded on the board are mainly in high-tech and strategic emerging industries such as new-generation information technology, biomedicine, high-end equipment, new energy, new materials, as well as energy conservation and environmental protection.

Some 389 are recognized as “Little Giants,” a prestigious national list of “specialized, refined, distinctive, and innovative” small and medium-sized  businesses. They lead in niche markets with advanced technologies, and often fill gaps in China’s industrial chain.

Sixty-five have been named “Manufacturing Single Champion” demonstration firms, which are companies recognized as global leaders in specific product categories, commanding top worldwide market share, cutting-edge core technologies, and strong brands in their fields.

The main products of 49 have earned “Manufacturing Single Champion” status. In total, 418 companies, or 70 percent of all Star Market-listed firms, hold one or more of these titles.

Thanks to its flexible and inclusive listing rules, the Star Market has supported 60 unprofitable companies and 22 that went public under its fifth listing criteria, which allow cutting‑edge hard‑tech firms, even ones with no revenue, to go public so long as they meet a minimum projected market value of CNY4 billion (USD552 million).

Since listing, 22 previously loss-making companies have turned a profit, while 21 of those that floated under the fifth listing criteria have bought out products, and the remaining one has filed for product approval. Sixteen of the 22 firms listed under the fifth criteria have annual revenue of over CNY100 million (USD14.2 million) and four have already crossed the CNY1 billion mark.

A defining feature of Star Market-listed firms is heavy investment in research and development. They poured a combined CNY132.8 billion (USD19 billion) into R&D in the first three quarters, 2.7 times their total net profit. Median R&D spending accounted for 12.5 percent of operating revenue, much higher than in other segments of China’s stock market.

Last year, Star Market companies spent CNY168.1 billion (USD24 billion) on R&D, more than three times their combined net profit.

The investment appeal of Star Market firms has increased along with their growth. There were more than 100 exchange-traded funds tracking major indexes of the Star Market as of Nov. 30, with a combined scale of over CNY310 billion (USD44.3 billion). Onshore and offshore funds tracking the Star 50 Index have nearly CNY180 billion in assets under management.

Editors: Tang Shihua, Kim Taylor