Recently, someone asked me about Taiwan's Innovation Board and Strategic Innovation Board. Actually, these two sectors are quite interesting and worth paying attention to.

First, let's talk about the background. In July 2021, Taiwan launched the Innovation Board and Strategic Innovation Board, mainly to support innovative companies. The Innovation Board is on the stock exchange, requiring companies to have core technologies and innovative capabilities (such as IoT, AI, big data), with a market value of at least 1 billion New Taiwan Dollars. The Strategic Innovation Board is on the OTC market, targeting small and medium-sized innovative enterprises, with relatively lower thresholds. Interestingly, companies on the Strategic Innovation Board can, after reaching a certain stage of development, transfer to the Innovation Board for listing.

Currently, there are 4 stocks listed on the Innovation Board: NAI Chuang Technology-KY (6854), Hongde Energy (6873), Yunbao Energy (6869), and Yitian Cool Qi (2432). Originally, there were 21 companies listed on the Strategic Innovation Board, but 18 have already transferred to the general OTC market, leaving only Pinyuan (6963), General Stem Cells (7607), and Yijun Environmental Science (6912) still on the Strategic Innovation Board.

Regarding trading systems, because these sectors carry higher risks, there are some restrictions. Day trading, margin trading, and short selling are not allowed. Trading hours are from 9:00 AM to 1:30 PM, with a trading unit of 1,000 shares. The Innovation Board has a 10% daily price fluctuation limit. For the Strategic Innovation Board, there is no price limit for the first 5 days after listing; afterward, it is 20%. Odd lot trading can only be done after hours.

What are the benefits of investing in these stocks? First, you can participate in early-stage and high-tech companies, providing more diverse investment options. Second, these companies are innovative, supported by the government, and have promising prospects. However, the risks are also significant—high failure rates among startups, market volatility, poor liquidity—so investors need to have sufficient risk tolerance.

The most critical point is the investment threshold. To invest in the Innovation Board and Strategic Innovation Board, you must be a qualified investor. This means either having at least 2 years of securities trading experience, proof of assets of at least 5 million NT dollars, or an average annual income of 1.5 million NT dollars over the past 2 years. In simple terms, ordinary retail investors generally cannot access these markets.

If you meet the criteria, how do you invest? I looked at the trends of the four stocks on the Innovation Board. All of them rose on the first day of listing, and three made a profit within a week. But afterward, they started to fluctuate and decline. So, the first strategy is to subscribe early and sell after the initial gains fade. The second strategy is to choose stocks with high trading volume. NAI Chuang Technology-KY has the highest volume, experienced a long decline, but finally rebounded this year, now up slightly by 2%. In an environment with scarce liquidity, trading volume is very important for stocks.

Honestly, compared to the U.S. NASDAQ, Taiwan's Innovation Board still has a gap. NASDAQ's investment threshold is much lower, and it hosts many quality companies, which have quadrupled in value over the past decade. If you can't meet the criteria for the Innovation Board, you might consider investing in the NASDAQ 100 Index to also enjoy the benefits of innovative companies.

In summary, innovative companies are the future trend. The number of qualified investors has already exceeded 190k, and more companies will join. Whether directly investing in stocks on the Innovation or Strategic Innovation Boards or participating through other means, it’s a good choice. The development of innovative enterprises is indeed the future direction of Taiwan’s financial market.