IPO In China: Made-In-China.com President Joseph Wong (Part 6)

SM: Is Made-In-China a public company?

JW: Yes, we went public last year. We went public in China.

SM: Can you talk about the IPO market in China? What was the decision- making process to take your company’s profits public in the Chinese market? What revenue level does it take to go public in China?

JW: Different countries have different IPO rules. The basic requirement in China is that the company must be profitable for three years. The revenue required is over 10 million renminbi (RMB), which is about $1.5 million. If a company meets those two minimum requirements, then they have met the regulatory requirements to allow them to have an IPO and go public.

SM: So you need to have over 10 million RMB, and the company must be profitable for three successive years. Is that correct?

JW: Yes. Those are the minimum requirements. That does not mean you will go public or that you will do well if you do go public. It is just a standard to be met.

SM: So you went public last year after you had been profitable for three years. How did the Chinese market respond to an Internet-based stock?

JW: The Chinese government keeps strict control over the Internet, so there have not really been many Internet-based companies going public. Our company is the second such company to be listed on the stock market through 2009. There are very few companies that can be listed on the Chinese markets because they must ensure their businesses do not compromise Chinese government standards in any way. When we listed on the markets, there were a lot of investors who were very interested in us for the sole reason that we were able to meet all government requirements and regulations. In that aspect we have a good business plan, and investors found our value proposition to be unique.

SM: What was the first company to go public?

JW: The first company is a B2B Internet company as well. Its main category is chemistry. It supports chemical B2B suppliers.

SM: When did they go public?

JW: They went public in 2005. We were second in 2009.

SM: What about Alibaba? I thought they were a public company.

JW: I don’t consider Alibaba to be on that list because they listed on Hong Kong markets. There are a lot of Internet companies on the Hong Kong markets. The Chinese markets are distinct from the Hong Kong markets.

SM: In the Chinese market, do Internet companies just go list themselves in Hong Kong instead of in China?

JW: Yes, that was a trend. The Chinese government keeps very strict control over the Internet. For a lot of websites that provide services that may be a problem [in the view of] the government, it would be very difficult for them to go public in China.

This segment is part 6 in the series : IPO In China: Made-In-China.com President Joseph Wong
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