Electric Scooter Segway Ninebot passed the screening for listing in the Chinese Star Market
First case of a structured company with a variable equity entity...”China, test whether to accept it in earnest"
target. Demanding measures to strengthen investment
protection" () Reporter Seon Jae-gyu = Segway Nine, one-person electric
scooter maker The bot passed the screening for listing on the “Chinese version
of NASDAQ” (aka Star Market), reported by Chinese economic and financial media,
Chaishin.
Chai-sin said on the 13th that the stock market authorities
approved the application for Segway Nine bots to borrow 2 billion Yuan (about
3412 billion won) by listing on the Star Market.
Chai-shin pointed out that this is the first time that an
overseas registered Chinese base company with a variable equity entity (VIE)
structure has been allowed to issue a Chinese stock depository (CDR) in the
Chinese A-share market.
The VIE structure refers to a method of doing business in
the name of a local after creating a local corporation with a paper company
overseas and 100% investment in the home country. Chai-sin pointed out that the
VIE structure has been used to circumvent government regulations for foreign
capital investment in China's IT sector.
China's Industrial and Commercial Bank, which is the main
bank of Segway Nine bots, sells 750 million A shares issued by Segway Nine bots
as Segway Nine bot CDRs on a 10 CDR basis per common stock, Chaishin explained.
Chaishin analyzed that Segway Nine bot plans to launch robot
delivery services through the) We Chat Small
program or app, and that it has adopted the VIE structure to circumvent Chinese
authorities' regulations on this sector.
Chai-sin pointed out that this is a case to test whether the
stock market authorities will accept VIE-structured companies in the star
market.
Nine bot has emerged as the world's largest electric scooter
maker after acquiring Segway, an American company in 2015.
Chai-sin said the authorities passed Segway Nine bot's
application for listing on the star market, asking for measures to alleviate
concerns about investor protection under the VIE structure. Segway Nine bot,
which is supported by Xiaomi, Sequoia China, Singapore sovereign wealth fund
and China mobile innovation industry fund, has already been listed in the star
market, Chai sin said.
Chai-shin said that Segway Nine bot was still unable to escape from the deficit, with a net loss of 495 million Yuan last year. Related party sales to Xiaomi accounted for more than half of last year's sales.
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