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Report: China to fast-track tech IPOs

China plans to grant speedy approvals to tech companies seeking domestic initial public offerings, Global Times reported March 4, citing Chinese media reports.

The new IPO procedure will see tech unicorns, or startups that have valuations of over US$1 billion, obtaining regulatory approvals within two to three months.

Chinese regulators have reportedly issued guidelines saying that if unicorns involved in biotechnology, cloud computing, artificial intelligence and high-end manufacturing seek listings, brokers should report this to the China Securities Regulatory Commission.

To evade the IPO queue, tech companies will be given priority by regulators. This significantly cuts the current wait time of two to four years, according to a separate China Money Network report.

Under the revamped IPO procedure, tech unicorns will be allowed to bypass the mandatory revenue and profit threshold to float shares. Currently, companies must have a cumulative net income of more than 30 million Chinese yuan for the last three fiscal years in order to list on the bourse.

The fast-track also means tech companies do not have to wait until they dismantle their variable interest entity structures to apply for an A-share IPO.

As of March 2, US$1 was equivalent to 6.36 Chinese yuan.