(Yicai Global) June 12 – Yuyue Medical Equipment and Supply, a Chinese maker of devices used in hospitals, has terminated its plan to issue global depositary receipts on the SIX Swiss Exchange, marking the second such withdrawal among Chinese companies this year.

The oxygen concentrator and X-ray machine manufacturer made the decision taking into account changes in domestic and foreign markets, the company’s financial and operating conditions, as well as its long-term strategic planning, the Danyang-headquartered firm said in a statement yesterday.

Yuyue Medical first announced its financing plan in December 2022 to advance the firm’s core business and strategic investment.

After the first Chinese companies made use of the new GDR financing path in Switzerland in July 2022, the pace of such issuances has accelerated with just one cancelation. In March, S.C New Energy Technology, a maker of solar power equipment, said it is taking back its initial scheme of listing shares on the SIX Swiss Exchange. The plan was not yet approved by the board of directors or regulators.

Many firms in emerging industries such as semiconductors, healthcare, and lithium batteries, have completed financing overseas. However, due to the lack of active trading in some companies’ GDRs, investment bankers believe that the Chinese authorities are strengthening regulatory oversight to guide companies to better carry out offshore financing, ChinaFund reported today.

Some actions have already been taken to avoid unhealthy fundraising. On May 16, China’s main securities watchdog revealed new tightened rules for firms that intend to issue GDRs, clarifying that they still need to comply with the domestic refinancing requirements.

On June 2, China’s two mainland bourses announced their own requirements for listed companies that want to issue more shares abroad. For example, firms must have a track record of at least one year of stock trading behind them and their market capitalization should not be less than CNY20 billion (USD2.8 billion) before the application date.

The change of direction was well received as shares of Yuyue [SHE:002223] closed up 0.6 percent at CNY33.02 (USD4.60).

Editor: Emmi Laine