Is it make or break for the Initial Public Offering (IPO) application by Foxconn Industrial Internet in China's A-share market? The answer will be known on March 8.
If the greenlight is given, it will become another testament to the regulator's resolve to overhaul China's IPO approval system, which aims to boost the overall quality of listed firms.
Foxconn Industrial Internet, a subsidiary of the Taiwanese manufacturer Hon Hai led by billionaire Terry Gou, is the world's largest contract electronics manufacturer and a major Apple supplier.
China's securities watchdog is tightening scrutiny of listing applicants to boost the overall quality of listed firms. The passing rate has fallen by half, and piles of companies have to queue up for hundreds of days before the review process is completed.
However, the last thing that the regulator wants to do is to turn away a tech giant that is highly profitable and creates many jobs for the country.
Foxconn took an unprecedented short period of time for it to go through the review procedure.
"The reform signal is clear," said He Fei, a senior researcher with the financial research arm of the Bank of Communications, adding that the regulator had shown "resolve to break the institutional barriers to reform the IPO approval system."
The government has considered helping emerging and creative businesses tap into the country's capital market as the country aims to build a modernized economy.
The State Council said in a guideline in 2015 that it would look into ways to allow the listing of Internet and high-tech companies, which were still unprofitable, on the ChiNext, the NASDAQ-style board.
The guideline also called for the acceleration of a pilot program allowing a number of Internet and technology companies that have not yet turned a profit to list on the ChiNext after staying in the national equities exchange and quotations system for a certain period.
Baidu, Alibaba and Tencent, the three Chinese Internet heavyweights, went public overseas. Their combined market value accounts for nearly 74 percent of the total market value of Chinese listed Internet firms, according to the China Internet Information Center.
Qihoo 360, China's largest Internet security company once listed on the New York Stock Exchange, returned to China's A-share market in late February. More returns could become a trend in the future, analysts said.
The IPO of Foxconn could also reveal regulator's bold steps on opening up.
If permitted, Foxconn will become the first overseas-funded company to go public in the A-share market.
The government released a guideline in 2016 that it would permit overseas firms to be listed on domestic stock exchanges to expand their financing channels.
The firms will be able to go public on the main board, the SME board, the ChiNext board and debut on the National Equities Exchange and Quotation system.
The policy is part of China's efforts to level the playing field for foreign firms, attract foreign investment and promote opening up.
Foxconn Industrial Internet plans to use the proceeds of the flotation to fund eight new projects, according to a prospectus filed in early February.
The projects include 5G, the Internet of Things and artificial intelligence, according to the the prospectus.
The total investment for the eight projects will reach 27.3 billion yuan (4.3 billion U.S. dollars).
The prospectus gave no details on share pricing and the number of shares to be listed.
In 2017, Forxconn Industrial Internet posted a revenue and a net profit of 354 billion yuan and 15.9 billion yuan, respectively, rising from 273 billion yuan and 14.4 billion yuan in 2016.
