What Are the New Opportunities in Singapore's Capital Markets? | A Recap of the Dalton Venture x CICC Qimenghui Event

The Dalton Learning Series

From founding a company to taking it public is a long journey of cultivation. Healthcare startups, while pursuing technological breakthroughs, also face challenges spanning corporate strategy, business models, capital operations, and management.

To better support the steady growth of portfolio companies, we have launched the Dalton Learning Series — a post-investment initiative designed to build a platform for entrepreneurs to exchange ideas with industry pioneers and innovators, fostering collaboration and synergistic innovation across the value chain.

In this edition of the Dalton Learning Series, Dalton Venture joined hands with CICC Qiyuan, a repeat LP across multiple of our previous funds, to host an in-person dialogue with Singapore Exchange Group, exploring the "new" windows and opportunities in Singapore's capital markets.

As domestic IPO policies have tightened in phases, companies have been actively seeking alternative paths to go public overseas. Singapore has emerged as a focal point for Chinese companies "going global," thanks to its stable political environment, favorable business climate, mature financial policies and infrastructure, and position as a gateway to Southeast Asian markets.

To help Dalton portfolio companies understand diverse listing options and the advantages and opportunities of Singapore's capital markets, on the afternoon of November 1, 2024, Dalton Venture and CICC Qiyuan — a repeat LP across multiple of our previous funds — co-hosted an offline Dalton Learning Series session themed A Detailed Guide to Singapore as a New Listing Destination. The event featured in-depth discussions and exchanges on topics including "the advantages of Singapore's capital markets," "Singapore listing rules and processes," "financial regulatory requirements," and "case studies of Chinese companies listing in Singapore."

Opening Remarks by Host

Qi Sun, Founding Managing Partner, Dalton Venture

Opening Remarks by SGX Representative

Caihan Xie, Senior Vice President, Singapore Exchange Group; Head of Capital Markets, Greater China

Opening Remarks by Co-Host

Yuxi Wang, Executive Director, CICC Qiyuan

Keynote Speech

Haoyu Wei, Chief Representative, Beijing Representative Office, Singapore Exchange Group

Qi Sun, Founding Managing Partner of Dalton Venture; Caihan Xie, Senior Vice President of Singapore Exchange Group; Haoyu Wei, Chief Representative of SGX Beijing Representative Office; and Yuxi Wang, Executive Director of CICC Qiyuan were joined by over 30 founders and senior executives from more than ten Dalton portfolio companies. Additionally, 70+ partners from the Dalton Venture and CICC Capital ecosystems participated online.

01

Singapore:

The Preferred Destination for Chinese Companies Exploring New Markets

Singapore has garnered significant global attention in recent years, particularly attracting numerous Chinese companies seeking international opportunities. Caihan Xie, Senior Vice President of Singapore Exchange Group and Head of Capital Markets for Greater China, shared in her opening remarks why Singapore has become an important platform for corporate internationalization:

(The following content is excerpted and adapted from the speaker's remarks)

- Cultural Proximity

The cultural affinity between Singapore and China facilitates companies' integration into the local market, making it easier for them to adapt to and understand the business environment.

- Global Business Hub

The unique appeal of Singapore's capital market lies in its openness to diverse business models and philosophies. Beyond providing capital support, it offers an ideal environment for growth, successfully attracting companies from around the world to explore development potential together.

- Diverse Investment Environment and Capital Market Opportunities

Investors from Europe, the US, Asia, and China continue to expand their networks in Singapore, creating a diversified investment landscape and varied financing channels. Meanwhile, Southeast Asian investors have gradually become an important market force, currently accounting for approximately 20% to 30% of the market — predominantly institutional investors (80%). This creates opportunities for companies to secure substantial investment in relatively short timeframes.

- Neutral Market Recognition

Singapore's neutral market environment provides companies with unique credibility and helps them gain broader support.

- Talent and Business Internationalization

Singapore's international talent pool offers Chinese companies a platform to find suitable employees and technical professionals. The Singapore capital market not only drives capital inflows but also helps companies expand into new markets and recruit local talent, thereby achieving business internationalization.

- Soft Infrastructure and Regional Cooperation

Singapore excels in soft infrastructure, with laws, regulations, and policies that are highly supportive of foreign enterprises. Its harmonious relations with neighboring countries provide a stable environment for regional development. The "Singapore+" concept emphasizes collaboration between Singapore and countries such as Indonesia and Malaysia, combining hard and soft infrastructure to support corporate development across the region.

02

Features of Singapore's Capital Market:

The Dual Engine of "Fundraising Capability + Business Development"

According to statistics, as of the first half of 2024, 40% of companies listed on the Singapore Exchange were foreign companies, of which 35% were from Greater China. In recent years, leaders of China and Singapore have maintained close communication and attach great importance to bilateral relations, which have been elevated to an all-round high-quality forward-looking partnership. Haoyu Wei, Chief Representative of SGX Beijing Representative Office, provided a detailed overview of the characteristics and advantages of Singapore's capital market, listing methods, conditions and processes, financial regulatory landscape, and financing policies in his keynote presentation.

(The following content is excerpted and adapted from the speaker's remarks)

Singapore is situated within reach of half the world's population. It has signed double taxation avoidance agreements with 85 countries and free trade agreements with 23 regions. The growing convergence of companies here has made Singapore a global connectivity hub, an international financial center, and a leading global business platform. Singapore ranks among Asia's top performers across metrics including business environment, competitiveness, and urban wealth index.

At the same time, the Singapore Exchange stands as the most internationalized exchange globally, with overseas issuers accounting for as much as 33% of listings. Approximately 40% of the total market capitalization of SGX-listed companies comes from foreign firms — a figure that reflects the relative friendliness of Singapore's capital market toward overseas issuers.

Wei pointed out that for any capital market, "providing capital and fundraising capability" is a basic function. Beyond this, the ability to "open a second growth curve for companies and provide business development opportunities" is equally important and even more valuable. Singapore's advantageous geographic position, safe and stable rule-of-law environment, proven track record in corporate internationalization, and substantial demographic dividend — among other favorable conditions — provide dual assurance for both corporate financing and business development.

A large capital pool and multi-tiered investor structure represent another distinctive feature of Singapore's capital market. Statistics show that assets under management in Singapore have exceeded S$5.4 trillion, with the majority of global investors having established offices there. On the other hand, the incremental investor base in Singapore's capital market has grown rapidly in recent years, with increasing numbers of high-net-worth individuals, family offices, and wealth management firms entering the country. The multi-tiered investor structure and the relatively flexible investment decision-making characteristics of this growing investor force have, to some extent, contributed to improved market liquidity and valuations on the SGX.

Currently, all methods available for Chinese companies to list overseas are applicable in Singapore's capital market, and companies can make different choices depending on their stage of development. For example, mature companies with substantial scale and stable performance may consider a Mainboard listing; small and medium-sized, high-growth companies may opt for Catalist. Specifically, companies applying for a Mainboard listing must meet one of the following conditions:

a) Profitable companies: Profit in the most recent financial year, at least three years of operating history, and a market capitalization of no less than S$150 million based on the issue price; or

b) Non-profitable companies: If only operating revenue was recorded in the most recent financial year, a market capitalization of no less than S$300 million based on the issue price; or

c) Profitable companies: Pre-tax profit of S$30 million in the most recent financial year, and at least three years of operating history.

Generally, the listing review can be completed within eight weeks after a company submits its application. Notably, the "pre-listing consultation" communication mechanism in the SGX listing process ensures effective communication on key issues, enhances approval efficiency, and improves the success rate of listings.

During the Q&A session, attending companies engaged in extensive exchanges with the speakers, with lively discussions throughout.

Going forward, Dalton will continue to provide support and empowerment tailored to the specific questions raised by portfolio companies, working hand in hand with entrepreneurs to navigate complex and evolving market environments and achieve value growth.

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