Chinese Companies Are Rushing Back to IPOs Even Without Profits
China’s domestic stock markets are seeing a revival in IPO activity after a prolonged slowdown, and the companies leading the comeback have something unusual in common: many of them aren’t profitable. What they are is strategically aligned with Beijing’s long term industrial and technological goals — and in today’s policy environment, that matters more than earnings.
IPO Activity Rebounds After Two Quiet Years
For nearly two years, China’s IPO market stalled as regulators tightened scrutiny and investors grew cautious amid economic uncertainty. Now listings on the mainland are picking up again, especially on innovation focused boards like Shanghai’s STAR Market and Shenzhen’s ChiNext.
New filings are coming from companies in biotechnology, advanced materials, clean energy and semiconductors all sectors that Beijing considers essential for China’s future competitiveness. Regulators appear more willing to greenlight these listings even when financial performance is weak because the firms serve broader national objectives such as technological self sufficiency and industrial upgrading.
New IPO Filings Highlight Government Priorities
Three recent IPO applicants demonstrate this trend clearly:
Healthgen Biotechnology, a company that produces blood plasma proteins derived from genetically modified rice, is seeking to raise 2.4 billion yuan on the STAR Market. Its technology fits China’s push to strengthen domestic biomedical capabilities and reduce reliance on imported medical materials.
Xi’an Eswin Material Technology, which manufactures silicon wafers used in semiconductors, also initiated its IPO process. China has ramped up support for semiconductor supply chains as it faces ongoing export restrictions from the United States.
BeBetter Med, a Guangzhou based biotech firm working on cancer drug development, is another company attracting investor interest despite not yet turning a profit. Its research aligns with national goals to expand high value pharmaceutical innovation.
None of these companies is profitable but all of them operate in sectors central to China’s industrial strategy. That alignment has become a key criterion for IPO approval.
Profitability No Longer a Barrier If You Fit the Vision
Domestic markets, especially STAR and ChiNext, were originally designed to support innovation by easing listing requirements compared to traditional exchanges. Now those looser rules are being used more strategically.
China wants to shift its economy toward advanced manufacturing, biotech, clean tech and hard tech. Allowing early stage companies to access funding through IPOs gives them the capital needed to scale, even if their business models are still developing.
This approach marks a departure from past cycles in which regulators were wary of speculative listings. Today, the priority is to accelerate innovation even if profitability comes later.
Risks for Investors but Rewards for Policy Goals
For retail investors, this trend brings both opportunity and risk. High growth industries can deliver strong returns, but pre-profit companies come with uncertainty and are vulnerable to market fluctuations.
For policymakers, however, the benefits are clearer: IPOs provide financing for companies operating in sectors that Beijing wants to dominate globally. The listings also help deepen capital markets and shift funding away from debt heavy bank loans toward equity investment.
A New Phase in China’s Capital Market Strategy
China’s return to IPO growth is not a signal of broad market reopening but a targeted, strategic mobilization. Firms that contribute to national priorities chips, biotech, materials, clean energy — are getting green lights. Others may continue to face stricter scrutiny.
The message is clear: in China’s evolving economic landscape, alignment with state priorities now matters as much as, if not more than, traditional financial performance.
