Beijing SinoHytec Co. Ltd., which makes hydrogen fuel cell engine, is set to be listed on Shanghai’s Nasdaq-like high tech STAR market, after its IPO plans were approved by regulators earlier this week.

SinoHytec, which filed its IPO prospectus to the Shanghai Stock Exchange in July last year, was green lit by the regulators on Thursday. The company aims to raise up to 1.2 billion yuan ($170 million), according to its prospectus.

The money raised will be used to “ramp up productions” and for “research and development programs”, as well to replenish a total of 500 million yuan in reverses used in cash flow expenditure, according to the company.

Founded in 2004, SinoHytec was listed on China’s New Third Board, a Beijing-based over-the counter trading system, in 2015. The company specializes in research and development of hydrogen fuel cell technology and has partnered with a series of companies that include automakers such as SAIC Motor and public bus-makers like Foton. In 2019, SinoHytec posted net loss of 14 million yuan on annual reported revenues of 553 million yuan.

The Chinese government has over the past decade promoted the use of hydrogen fuel cell technology, touting it as one of the three major “new-energy” technologies to replace traditional petroleum-based engine technology.

However, over the past two years, Beijing has gradually moved to reign in subsidies that were given out to the new-energy car industry since 2009, amid criticism that such industrial policy has failed to effectively kick create a competitive and efficient industry. Last month, a document released by four Chinese ministries, that include Ministry of Finance, said only those companies that have made breakthroughs in key technologies of components will qualify to be eligible for government incentives.

Amid policy uncertainty, the approval committee at the Shanghai Stock Exchange issued a note on Thursday demanding SinoHytec offer a more detailed explanation on “policy stability” and “market development room” cited in its prospectus as it relates to the hydrogen fuel cell industry.

In 2019, China sold just 2,737 units of hydrogen fuel cell vehicles, up 629 units in 2016, according to data from China Association of Automobile Manufacturers. They were largely public buses and commercial vehicles used for logistics purposes. Overall, China sold a total of 1.2 million units of new-energy vehicles, with 972,000 were purely-electric vehicles, according to the association.