China's second-largest chip foundry Hua Hong Semiconductor made a stellar trading debut on the country's NASDAQ-style sci-tech innovation board – known as the STAR Market in Shanghai – after raising CNY21.2 billion, the largest IPO in the A-share market so far this year. The company's success signals China's intensified efforts to achieve self-reliance in the semiconductor sector and spur its growth, aiming to break the technology blockade by the U.S. The shares closed at CNY54, an increase of 3.85%, after opening more than 13% higher on August 7. Hua Hong issued 408 million shares at CNY52 each, with the market capitalization reaching CNY89.2 billion. The IPO was the third-largest ever for the Shanghai STAR Market, after the CNY53.23 billion IPO of Semiconductor Manufacturing International Corp (SMIC) in 2020 and BeiGene's CNY22.16 billion in 2021. China's strengthened support for the semiconductor sector – along with other sci-tech industries – has boosted the development of related companies.
Xiang Ligang, Director General of the Beijing-based Information Consumption Alliance, hailed Hua Hong's successful debut, saying that the U.S. suppression of China's technology industry has accelerated the business and technology development of companies like Hua Hong as more domestic enterprises have opted to cooperate with them. Ma Jihua, a Beijing-based senior industry analyst, agreed with Xiang's view, saying that Chinese industrial players have achieved sustainable development potential with market demand. Both Xiang and Ma emphasized China's implementation of support policies in various areas as playing a vital role in continuously promoting the country's progress in high-tech industries. Companies like Hua Hong can catch up on technological development rapidly thanks to these policies, which will enhance their competitiveness, Xiang noted.
On August 7, the Shanghai Stock Exchange STAR 100 Index, a new indicator tracking the performance of companies from the STAR Market, went online. It includes 100 securities from the STAR Market with medium-sized market capitalization and good liquidity. Along with the already launched STAR 50 index, the two indicators currently track companies that account for up to 66% of the total market capitalization of listed firms on the STAR Market. In the first half of 2023, IPO financing for 41 companies on the STAR Market reached CNY87.7 billion. Yi Huiman, Chairman of the China Securities Regulatory Commission (CSRC), said in June that measures targeting the capital market to support high-level scientific and technological independence and self-reliance would be introduced in a timely manner. China's progress in making technological breakthroughs via research and investment support can't be stopped even if the U.S. is unwilling to accept China's progress in science and technology, Dong Shaopeng, Senior Research Fellow at the Chongyang Institute for Financial Studies at the Renmin University of China, told the Global Times.
