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China Fund News reporter Shao Hao

In April 1983, a white sedan slowly drove out of an old factory in Anting, Shanghai. All the parts of this car were imported from Germany. The car could be "assembled" without files or hammers. It had a name taken from the Colorado Tornado in the United States - Santana.

Over the next decade, Santana, which was first imported with parts and then manufactured in a joint venture factory, became popular all over the country and "enlightened" the Chinese automobile industry along with a number of joint venture models.

Over the past 40 years, the whirlwind created by Chinese auto companies is now sweeping the world. After becoming the world's largest auto exporter for the first time in 2023, China's auto exports continued to grow rapidly in the first half of this year. At the same time, a group of new energy auto industry chain companies with core technologies are competing to build factories overseas, many of which are from the Science and Technology Innovation Board.

In the five years since the market opened, companies in key industrial chains such as new energy, integrated circuits, and biomedicine have gathered on the Science and Technology Innovation Board. They have gathered together to build an industrial highland for scientific and technological innovation; they have set off trends, and the concept that "hard technology is hard truth" has been deeply rooted in the hearts of the people; they shine like stars, illuminating the way forward for China's high-quality development.

Only because of hope can we forge ahead. To create new momentum and new advantages, more scientific and technological enterprises need to strive to be the first, and to develop new quality productivity, more scientific and technological innovation talents need to work hard. This is a must-answer question for high-quality development. The Science and Technology Innovation Board, which just turned 5 years old, is giving more resounding answers.

Stars and moon shine together

China's scientific and technological innovation forces are gathering

Strategic emerging industries represent the direction of a new round of scientific and technological revolution and industrial transformation, and are the key force in promoting changes in the quality, efficiency and driving force of economic development.

"The major reform of the Science and Technology Innovation Board's pilot registration system provides a good platform for leading companies like us to play the role of question setters." Yu Yuehui, chairman of Shanghai Silicon Industry, said that breakthroughs in the field of semiconductor materials depend on multi-disciplinary and multi-field "hard technology" research and development support, and that leading companies should take the lead in promoting the integrated collaborative research and development of key projects.

As of the end of May 2024, there are 572 companies listed on the Sci-Tech Innovation Board, with a total fundraising of over RMB 1 trillion, which has expanded the capital market's direct financing support for "hard technology" companies. A large number of "hard technology" companies represented by SMIC, China Railway Signal & Communication Corporation, and United Imaging Medical have been able to grow rapidly with the help of the Sci-Tech Innovation Board.

"There are currently hundreds of semiconductor equipment companies in China, and about 20 relatively mature ones. We are pleased to see that everyone is developing rapidly in their respective fields. We are confident that we can achieve independent control and reach international advanced levels. The key lies in having sufficient financial support, the accumulation of high-end R&D talents, and the support of new-quality production relations that match the new-quality productivity." Yin Zhiyao, chairman and general manager of AMEC, made such a statement at the "New-Quality Productivity Industry Salon" held recently.

Over the past five years, a number of "hard technology" companies in the field of "stuck neck" technology have landed on the Science and Technology Innovation Board, and a complete industrial chain has been initially established in the six major industrial fields. At the same time, the demonstration effect and agglomeration effect of the Science and Technology Innovation Board in key industrial chains such as integrated circuits, biomedicine, and new energy have become increasingly significant, promoting the construction of a matrix-type industrial cluster led by industry "chain leaders" and coordinated by upstream and downstream companies, helping to accelerate the construction of a modern industrial system.

Among them, there are 113 listed companies in the integrated circuit field, bringing together industry leaders such as SMIC, AMEC, and Shanghai Silicon Industry, forming a development pattern with a complete chain and collaborative innovation.

There are a total of 111 listed companies in the biopharmaceutical field, focusing on the treatment of cancer, AIDS, hepatitis B, hepatitis C and other fields, making it a major global listing place outside of the United States and Hong Kong, China.

New energy fields such as photovoltaics and power batteries, new materials fields such as carbon fiber and superconducting materials, and high-end equipment fields such as industrial robots and rail transit equipment have all begun to take shape.

At the same time, a number of companies on the Science and Technology Innovation Board continue to promote the development of cutting-edge technologies and industrial transformation, and are accelerating their layout in future industries such as artificial intelligence, genetic technology, and quantum information.

A set of data may be able to show the efforts of companies listed on the Science and Technology Innovation Board in filling in the gaps in the industrial chain and clearing bottlenecks.

As the "vanguard" and "fresh force" of new-quality productivity, companies on the Science and Technology Innovation Board focus on key areas to accelerate scientific and technological research. A total of 136 projects led or participated by companies have won major awards such as the National Science and Technology Awards. A total of more than 100,000 invention patents have been generated, with an average of 185 invention patents per company. 60% of the companies' core technologies have reached international or domestic advanced levels.

At present, a total of 341 listed companies on the Science and Technology Innovation Board have been selected into the national list of specialized and new "little giants" enterprises, 49 companies on the Science and Technology Innovation Board have been rated as "single champion" demonstration enterprises in the manufacturing industry, and 40 companies' main products have been rated as "single champion" products in the manufacturing industry, accounting for more than 60% of the total number of companies in the board, effectively connecting the "break points" and unblocking the "blocking points" in the industrial chain, and strongly supporting the process of independent and controllable modernization of my country's industries.

In terms of financial data, taking 2019 as the base, the average annual compound growth rate of the total operating income and net profit of the Science and Technology Innovation Board companies in the past four years was 23% and 25% respectively, and the overall performance showed stable and rapid growth.

Sparks that spread

The trend of innovative ecology has become

The first bell to open the market, the first multi-standard enterprise to go public, the first company to become profitable and "get a U" rating - each historic moment marks the shaping of the scientific and technological innovation ecosystem.

In the five years since the establishment of the Science and Technology Innovation Board, with the joint efforts of all market parties, the effects of the Science and Technology Innovation Board and the registration system have continued to expand.

Over the past five years, the Science and Technology Innovation Board has adhered to its "hard technology" positioning and has formed a significant industrial agglomeration effect in key areas such as integrated circuits, innovative drugs, and photovoltaics. It has become the preferred place for my country's "hard technology" companies to go public.

The one-board connection facilitates the "technology-industry-capital" cycle, and a market ecology with high-level services for technological innovation has been initially formed.

The Science and Technology Innovation Board focuses on supporting high-tech industries and strategic emerging industries such as new-generation information technology, high-end equipment, new materials, new energy, energy conservation and environmental protection, and biomedicine. The industry structure is highly consistent with the key development areas of new quality productivity. Among them, companies in the new-generation information technology, biomedicine, and high-end equipment manufacturing industries account for more than 80%.

The Science and Technology Innovation Board has stimulated the enthusiasm of scientists for innovation and entrepreneurship. More than 60% of the founding teams of companies listed on the Science and Technology Innovation Board are scientific research talents or industry experts such as scientists and engineers. Nearly 30% of the actual controllers of the companies also serve as core technical personnel, and a research and development talent team of more than 230,000 people has been gathered. The second type of restricted stock created by the Science and Technology Innovation Board has become an effective tool for companies listed on the Science and Technology Innovation Board to attract, retain and motivate talents. At present, the equity incentive coverage rate of the board has reached 69%, involving nearly 100,000 incentive targets.

Over the past five years, the Science and Technology Innovation Board has effectively played the role of a "test field" for reform. A series of institutional innovations have provided useful reference for the stock market reform of the main board and the ChiNext, and have also accumulated useful experience for the registration system reform from pilot to full implementation.

As a "test field" for capital market reform, the Science and Technology Innovation Board adapts to the characteristics of science and technology innovation enterprises, coordinates the reform of basic systems such as issuance, listing, trading, and continuous supervision, and takes the lead in trying out a series of innovative systems such as refinancing, mergers and acquisitions, and equity incentives. It also replicates and promotes relevant experience in the reform of the Growth Enterprise Market and the Beijing Stock Exchange, laying a solid foundation for a comprehensive registration system.

Over the past five years, the Science and Technology Innovation Board has brought together a research and development team of nearly 400,000 people, with a financing scale of over 1 trillion yuan, stimulating the enthusiasm of innovative capital to "invest early, invest in small companies, and invest in technology."

As of the end of May 2024, there are 572 companies listed on the Science and Technology Innovation Board, with a total market value of 5.17 trillion yuan and a total IPO financing of more than 900 billion yuan, accounting for more than 40% of the total IPO financing of the A-share market during the same period. In terms of guiding funds, the Science and Technology Innovation Board has driven venture capital to "invest early, invest in small companies, and invest in technology", and nearly 90% of the companies on the Science and Technology Innovation Board received venture capital support before listing.

At the same time, the "institutional market" characteristics of the Science and Technology Innovation Board have been initially formed, and it has become the most institutionalized and indexed sector in the country. Institutional investors account for nearly 70% of the holdings, the number of Science and Technology Innovation Board indexes has reached 15, and the scale of domestic and foreign index products exceeds 170 billion yuan, of which the scale of the Science and Technology Innovation 50 ETF products is nearly 130 billion yuan, and its market influence and recognition continue to increase.

Moreover, the Science and Technology Innovation Board has attracted the attention of global investors since its opening due to its adherence to the capital market positioning, and its high-quality internationalization process has been steadily moving forward. Since the inclusion of Science and Technology Innovation Board stocks in the Shanghai-Hong Kong Stock Connect in February 2021, the number of Science and Technology Innovation Board stocks in the Shanghai-Hong Kong Stock Connect has increased from 12 to 315, and the market value coverage of the Science and Technology Innovation Board has increased from 15% to 80%.

On the occasion of the fifth anniversary of the establishment of the Science and Technology Innovation Board, the China Securities Regulatory Commission issued the "Eight Measures for the Science and Technology Innovation Board", which is not only a task book for the construction of the Science and Technology Innovation Board, but also a roadmap for the development of the Science and Technology Innovation Board. With the continuous implementation of the "Eight Measures for the Science and Technology Innovation Board", the Science and Technology Innovation Board is expected to grow from a reform "experimental field" to a development "demonstration field".

Starry sky

Deepen reform and start again

If we regard the Science and Technology Innovation Board as a child born in 2019, he is now 5 years old, has a strong physique and can run with big strides.

In the absence of a mature path or transferable experience, the Science and Technology Innovation Board started with incremental pilot projects and gradually formed a complete and substantial institutional supply in terms of issuance, listing, information disclosure, trading, and continuous supervision, paving the way for the expansion of existing pilot projects and the full implementation of the registration-based reform with Chinese characteristics.

After five years of exploration, a series of forward-looking and practical systems have taken root, enabling the Science and Technology Innovation Board to serve scientific and technological progress and innovation-driven development more efficiently.

Taking the 2019 performance as the base, the average annual compound growth rate of operating income and net profit of 572 companies on the Science and Technology Innovation Board in the past four years was 23% and 24% respectively.

Faced with global technological competition, complex economic situation and cyclical adjustments in the industry, in 2023, the companies listed on the Science and Technology Innovation Board withstood the pressure and rose to the challenge, achieving steady growth in operating income. The performance of sub-industry chains such as innovative drugs and high-end equipment manufacturing was outstanding, demonstrating strong resilience and vitality.

What is gratifying is that the system is constantly evolving and improving.

On June 19, the China Securities Regulatory Commission issued the "Eight Measures on Deepening the Reform of the Science and Technology Innovation Board to Serve Technological Innovation and the Development of New Productivity" (hereinafter referred to as the "Eight Measures for the Science and Technology Innovation Board") to further play the role of the Science and Technology Innovation Board as a "test field" for reform, enhance its inclusiveness of new industries, new business models and new technologies, and better serve technological innovation and the development of new productivity.

On June 19, the day when the "Eight Measures for the Science and Technology Innovation Board" were released, the Shanghai Stock Exchange answered reporters' questions and clarified that the Science and Technology Innovation Board would implement a 3% highest bid elimination ratio on a pilot basis, marking the beginning of the implementation of the "Eight Measures for the Science and Technology Innovation Board".

Over the past month, new products have been introduced in initial public offerings, mergers and acquisitions, index products, etc., and driven by all market players, the "Eight Articles of the Science and Technology Innovation Board" have moved from paper to practice.

Wealth is a great cause, and daily improvement is a great virtue. According to relevant persons in charge of the Shanghai Stock Exchange, in the next step, the Shanghai Stock Exchange will thoroughly implement the important instructions of General Secretary Xi Jinping on the capital market, take the implementation of the new "Nine National Policies" as an opportunity, adhere to the political and people-oriented nature of capital market work, and focus on strengthening supervision, preventing risks, and promoting high-quality development. It will enhance the inclusiveness of new industries, new formats, and new technologies, and promote the development of new quality productivity; give full play to the synergy between science and technology and capital, and promote the continuous advancement and in-depth implementation of the reform of the stock issuance registration system.

Only by knowing where we have come from can we know where we are going. The past five years have been a wonderful start for the continuous deepening of reforms in China's capital market. As the reforms continue to advance, China's capital market is expected to generate greater momentum and continue to provide momentum for the high-quality development of China's economy.

Editor: Xiaomo

Audit: Wooden Fish

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