Frost & Sullivan insights
2022year7month22Today marks the third anniversary of the launch of the Sci-Tech Innovation Board. Over the past three years, there have been a total of [X] listed companies on the Sci-Tech Innovation Board.439home,IPO listingThe financing amount exceeds6,400100 billion yuan, total market value exceeds5.5trillion yuan. Compared with other sectors, the Sci-tech Innovation Board has becomeAThe sector with the fastest growth in R&D investment and the highest intensity of investment over the past three years.
The institutional innovation of the Sci-tech Innovation Board in the past yearAWhat impacts and lessons can be drawn from the equity capital market ecosystem? What more promising changes are expected for the Sci-tech Innovation Board in the next three years? Frost & SullivanFrost & Sullivan,Dr. Wang Xin, Global Partner and President of Greater China at Frost & Sullivan (hereinafter referred to as 'Frost & Sullivan'), was interviewed by China Securities Journal to discuss the three-year journey of the Sci-tech Innovation Board and its future development trends.
China Securities Journal
Tides rise on the shores of the East China Sea. The theme of the era of technological innovation surges in the capital market, riding the waves, while on the land of China, tides are high and the waves are rough. The Sci-Tech Innovation Board was born to meet this trend, playing the role of a brave adventurer in the tide's current.
Three years ago, as the sound of gongs rang along the banks of the Huangpu River, the team for the Sci-tech Innovation Board gradually grew stronger, and a "hardcore technology" era that integrated national strategies for self-reliance through science and technology with high-quality capital markets quietly arrived.
Looking back on the three-year growth journey of the Sci-Tech Innovation Board, changes have quietly “descended upon us”. Today's Sci-Tech Innovation Board features a more open and inclusive system, a more prominent focus on “rugged technology”, stronger growth potential, industrial chain clusters with more concentrated effects, and market-oriented new share pricing. The word “rugged” at the forefront attracts investors, and the Sci-Tech Innovation Board, which has embarked on a path of distinctive development, continues to attract the attention of more innovative technology companies. Enterprises in various sub-sectors carry dreams and passion, moving from fields, production lines, laboratories to the capital market, eager to nurture new vitality and strength through the fertile soil of the Sci-Tech Innovation Board.
Seize the opportunity to forge ahead into a new chapter, and set sail anew with renewed vigor. For the Sci-tech Innovation Board (STAR Market), which was born for the innovation-driven development strategy, three years have marked the beginning of a "full market cycle" operation. With unchanging original aspirations and relentless dedication, in the context of an era that relies on innovation to improve development quality, the STAR Market, as a "test field" for capital market reform, will continue to move forward swiftly, taking on the mission of leading economic development towards innovation-driven transformation, and further promoting a virtuous cycle of scientific and technological innovation, capital, and industry.
Over the past three years:6348100 million yuan for R&D of "living water" irrigation technology
437Listed company,5.56trillion yuan total market value,6348.34100 million yuanIPO listingFundraising amount...…&hellip>As of2022year7month21Today, the report card of the three-year-old Sci-Tech Innovation Board.
From the perspective of industry distribution,437The company is highly concentrated in high-tech industries and strategic emerging industries. Among them, the new generation information technology industry150Home (Proportion34.32%), high-end equipment manufacturing industry99Home (Proportion22.65%), biomedicine industry93Home (Proportion21.28%), new material industry39Home (Proportion8.92%), energy conservation and environmental protection industries32Home (Proportionality7.32%), new energy industry24Home (Proportion5.49%).
at6348.34100 million yuanIPO listingBehind the fundraising amount is the "development process" of hard technology companies that rely on the Sci-Tech Innovation Board to break through capital "bottlenecks," devoting themselves wholeheartedly to R&D and innovation.2018Based on the annual R&D investment amount, the compound growth rate of R&D investment in the Sci-Tech Innovation Board over the past three years is29%The average R&D investment per company has decreased from2018year0.95RMB billion growth to2.05Yuan, with the R&D investment intensity maintained at nearly13%at a high level. Compared with other sectors, the Sci-tech Innovation Board has becomeAThe sector with the fastest growth in R&D investment and the highest intensity of investment over the past three years.
China Securities Journal reporters have noticed that the fundraising projects of companies listed on the Sci-tech Innovation Board (STAR Market) are generally focused on the field of technological innovation, with all companies arranging for R&D-related fundraising projects. After going through the 'polishing and tempering' process following listing, some STAR Market companies' fundraising projects have achieved phased results.
Listed in the first year of the market opening70Taking a company listed on the Sci-tech Innovation Board as an example, as of2021At the end of the year, the overall progress of these companies' initial public offering fundraising was approximately54%At the same time, companies on the Sci-tech Innovation Board have leveraged fundraising and investment projects to achieve capacity expansion and upgrading, with initial economic benefits emerging. For example, Jiayuan Technology5000ton/The technical transformation project for high-performance copper foil for new energy power batteries in the year has been basically completed.2021Realize economic benefits in the year1.41100 million yuan.
2020The companies listed on the Sci-tech Innovation Board in 2023 have also seen "good news after good news" regarding fundraising and investment projects. Wu Yunkun, President of Qianxin Information Technology Co., Ltd., said: "The company's fundraising and investment projects mainly consist of R&D projects, with most of the project implementation cycles being..."2Around the year 2023, most projects will enter the final phase, and individual fundraising investment projects have been completed. The implementation of fundraising investment projects has greatly enhanced the company's technical capabilities, strengthened its channel construction, and improved its digital management level.
"One of the company's fundraising projects is an annual output of40,000ton/The annual production of sebacic acid by biological method has currently entered the commissioning phase, but it still takes some time from commissioning to full production. 'Liu Xiucai, chairman of Kaesai Bio, revealed.
In the view of listed companies on the Sci-tech Innovation Board, current R&D investment, including fundraising projects, will transform into a driving force supporting the sustainable development of enterprises. Liu Xiucai introduced that several products that Kaisai Biotech has industrialized are based on independently developed achievements, which provide efficient and strong guarantees and support for the company's sustainable development. At the Shanxi production base, Kaisai Biotech is building an annual output of50Ten thousand tons of glutaraldehyde and annual output90The ten-thousand-ton bio-based polyamide project will elevate the company's overall production capacity and scale.
Yin Zhiyao, Chairman of Zhongwei Company, said bluntly: 'Continuous high-level R&D investment is the key for the company to maintain its core competitiveness. This provides assurance for the company's independent research and development and innovation in advanced technologies globally, focusing on high-end micro-processing equipment. The company is accelerating the construction of projects such as Shanghai Lingang and Nanchang production bases, further expanding the capacity of high-end equipment, and continuously improving the level of R&D investment and product technological innovation.'
This Year: Releasing New Momentum for Reform through Institutional Innovation
Innovation and reform are the permanent 'vitality' of the Sci-Tech Innovation Board. Over the past three years, the Sci-Tech Innovation Board has been pioneering, not only creating one remarkable achievement after another but also supporting a new world for 'hard technology' enterprises.
In the first two years of its operation, the Sci-tech Innovation Board (STAR Market) has continuously made institutional innovations in information disclosure, mergers and acquisitions, refinancing, equity incentives, inquiry-based transfers, and other areas. In the past year, the "experimental field" has achieved another fruitful result, with a series of innovative systems being implemented and yielding tangible benefits.
This year, the new rules for new share inquiry and pricing were officially implemented. Entrusting the market with its own selection is the essence of the registration-based reform, and market-oriented issuance pricing is the core link of this reform. The implementation of the new rules for new share inquiry and pricing last year9Since the implementation of the policy, buyer competition has intensified, effective bid ranges have expanded, and the pricing efficiency of new shares has further improved. The phased 'group bidding' phenomenon in the early stages has also significantly improved.
This year, the first stock from the Beijing Stock Exchange's transfer listing to the Sci-tech Innovation Board was listed on the Sci-tech Innovation Board. This year5In January, Guandian Defense Technology was listed on the Sci-tech Innovation Board, marking the true interconnection of China's multi-level capital market. As the first company to achieve a transfer of listing status at the operational level, Guandian Defense Technology has not only become a demonstration case for effective connectivity between China's multi-level capital markets but also provided a new model for high-quality small and medium-sized enterprises to develop through the capital market, which helps to further stimulate market vitality.
In this year, the guidance on the application of the fifth set of listing criteria for medical device companies on the Sci-Tech Innovation Board was released. The fifth set of listing criteria supports companies in the R&D phase that have not yet generated a certain level of revenue and fully reflects the inclusive charm of the Sci-Tech Innovation Board. With the expansion of the fifth set of criteria to the medical device industry, it can encourage more medical device companies in the R&D breakthrough stage to carry out research and development of key core technologies.
This year, the market maker system for the Sci-tech Innovation Board (STAR Market) was implemented. Currently, the trading systems in mature overseas stock markets are mainly a hybrid of market maker and competitive bidding trading systems. As an emerging market facing internationalization, it is an unshirkable mission for the STAR Market to align with international systems. The introduction of the market maker system on the STAR Market helps to further enhance the liquidity of STAR Market stocks, strengthen market resilience, and better promote sector construction.
This year, Sci-Tech Innovation BoardESGThe disclosure of information is in the ascendant. This year1In January, the Shanghai Stock Exchange clearly stated that companies listed on the Sci-tech Innovation Board should disclose in their annual reportsESGRelevant information, which shall be compiled and disclosed separately as appropriate.ESGReports, etc. As of2021The annual report disclosure has ended, and all companies on the Sci-tech Innovation Board have disclosed it in their annual reportsESGRelevant information,95The company compiles and publishes its own social responsibility report orESGReport, presenting investment value to investors in multiple dimensions. This is also the first time in China that a listed companyESGExploration of information disclosure norms has had a positive exemplary effect on the main board, ChiNext, and other markets.
Wang Xin, Global Partner at Frost & Sullivan and President of the Greater China Region, said: 'The institutional innovation related to the Sci-tech Innovation Board in the past year has been beneficial to China's capital market, especiallyAFurther improvement of the stock market supervision system. The innovation of the Sci-tech Innovation Board (STAR Market) system provides more detailed document guidance for enterprises seeking initial public offerings or transfer listings, and the refinement of the system has created a better investment environment for a wide range of investors. The innovative provisions of the STAR Market effectively constrain financial market investment activities while ensuring reasonable market liquidity, which is conducive to the long-term sustainable development of China's capital market ecosystem.
Looking ahead: more international first-class technology companies will emerge
As clusters of scientific and technological innovation stars shine, the level of attention from international investors to the Sci-tech Innovation Board has quietly changed. From initial interest at the beginning of its launch to active research, participation in strategic investments, and even heavy positions today, the focus of international investors on the Sci-tech Innovation Board has been increasing year by year.
For international investors, the Sci-tech Innovation Board (STAR Market) presents high growth potential, high liquidity, and a strong scientific and technological innovation attribute that serves national development strategies. These are the 'comparative advantages' of the STAR Market that they have identified when looking at global markets.
Lian Peikun, Director of Research at UBS Securities Company, stated that over the past three years, the new economy has gained more attention and capital support globally without prior agreement. In terms of the Chinese market, China boasts a large number of technology companies and vast development potential. Helping startups achieve long-term development through financing is crucial for the future development of China's new economy.
"The steady performance of listed companies on the Sci-tech Innovation Board, the convenience of investment, and the listing and trading mechanisms that align with international capital markets continue to attract international investors," said Lu Tian, deputy general manager of Goldman Sachs' Gao Hua Securities.
It is reported that currently, international investors can either participate through Qualified Foreign Institutional Investors (QFII), Qualified Foreign Institutional Investors in RMBRQFII) Mechanisms participate in the primary and secondary markets of the Sci-Tech Innovation Board, and can also participate in trading on Sci-Tech Innovation Board stocks through the Shanghai-Hong Kong Stock Connect (as of now, there are a total of58Only Sci-tech Innovation Board stocks are included in the scope of SSE Connect targets), and investors can also invest in Sci-tech Innovation Board stocks issued in overseas marketsETFand other product configurations to target the Sci-tech Innovation Board. Lu Tian said: 'We are seeing an increasing number of overseas investors throughQFII,RQFIIParticipation in investing in the Sci-tech Innovation Board has increased; investment and trading through interconnect channels into the Sci-tech Innovation Board have also become more active.
Judging from the data, the internationalization level of the Sci-tech Innovation Board is increasing day by day. In terms of the secondary market, since the beginning of this year, the proportion of transactions by foreign institutional investors on the Sci-tech Innovation Board has been9%relatively2020year,2021Year-on-year increase7one,2Percentage points. Currently, overseas investors hold more than1000Yuan, accounting for nearly5%relatively2020Rise at the end of the year1.6percentage points, and2021Remains flat at the end of the year.
In terms of the primary market, as of7month8Today, the Sci-tech Innovation Board has listed stocks435In the company, a total35home hasQFIINumber of shares allocated upon successful participation in the new share inquiry and allocation453310,000 shares, amount of bonus9.59Yuan. In terms of strategic placement participation,4homeQFIIParticipated in7The strategic placement of shares by a company listed on the STAR Market has been completed, with a total allocation obtained1.58100 million shares, amount of shares allocated45.3Yuan. In the view of market participants,QFIIThe participation of funds in strategic placements on the Sci-tech Innovation Board has played a positive role in boosting market confidence, ensuring corporate issuance, and strengthening strategic cooperation with overseas investors.
Persevere through long-term efforts, never ceasing in pursuit. With the continuous advancement of the market construction for the Science and Technology Innovation Board (STAR Market), its international attractiveness and influence are expected to further enhance. At the same time, the attention and participation of international investors are also greatly beneficial for STAR Market companies to improve their internationalization level. Technological innovation intelligenceSaaSGuan Dian, co-founder of Service Provider Smart Seed, said: 'In the three years since the opening of the Sci-tech Innovation Board, we have seen an unprecedented market focus on 'technological innovation' and 'hard technology'. In the future, we believe that driven by the Sci-tech Innovation Board, more and more Chinese technology enterprises will emerge at an international advanced level.'
*This article is reprinted from China Securities Journal, with the reporter being Huang Yiling, Original title: Three years since the market opened! The brilliance of science and innovation continues to highlight China's new economic strength ">
Frost & Sullivan Insight & Extended Readings
QThe institutional innovations of the Sci-tech Innovation Board in the past year (such as new share inquiry, market makers, and delisting)AWhat impacts has the equity capital market ecosystem brought about and what experiences can be learned from it?
A: In the past year, the Sci-tech Innovation Board has successively introduced a series of innovative systems, mainly covering aspects such as new share inquiry, market makers, and transfer to the main board.
In terms of new share inquiry ,2021year9month18On the same day, the Shanghai Stock Exchange issued the "Implementation Measures for the Issuance and Underwriting of Stocks on the Sci-Tech Innovation Board of the Shanghai Stock Exchange (2021Announced for Revision in [Year]》(Revised) and the 'Guidelines on the Application of the Issuance and Underwriting Rules for Sci-Tech Innovation Board of the Shanghai Stock Exchange No.1Initial Public Offering (IPO)2021Annual revision)». The two documents, following the principles of marketization and legalization, propose more detailed rule revisions taking into account aspects such as fairness and efficiency in new share issuance under the registration-based system. They provide policy guidance for further optimizing the underwriting system for new shares issued on the Sci-Tech Innovation Board, promoting a more balanced game between buyers and sellers, and guiding investors to participate prudently in offline issuance. In the context of China as a wholeAFrom the perspective of the stock market, the formulation of such systems It is conducive to strengthening the supervision of offline investors' quotation behavior, improving the efficiency of capital markets serving the real economy under the registration-based system, and contributing toAImprovement of stock market supervision measures and investor education efforts.
In terms of market makers ,2022year5month13On the same day, the China Securities Regulatory Commission (CSRC) officially issued the "Pilot Provisions for Market-making Trading of Stocks on the Sci-tech Innovation Board by Securities Companies," introducing a stock market maker mechanism into the Sci-tech Innovation Board. The document mainly includes provisions on market maker access conditions and procedures, internal control, risk monitoring, supervision and enforcement, etc. After the release of the rules, eligible securities companies can apply to the CSRC for pilot qualifications for market-making trading of stocks on the Sci-tech Innovation Board as required. To prevent potential conflicts of interest between market-making trading and brokerage, proprietary trading, asset management, and other businesses, strict requirements are set for pilot securities companies. First, improve the business isolation system to prevent improper flow of sensitive information and strictly guard against conflicts of interest; second, establish and improve internal control, decision-making processes, and checks and balances mechanisms for market-making trading business to ensure standardized and orderly operations; third, strengthen the management of market-making trading business, improve integrity risk prevention and control, and anti-money laundering requirements to prevent illegal and irregular activities such as interest transfer, insider trading, and market manipulation. The improvement of this system It is conducive to further promoting the establishment of the Sci-tech Innovation Board and piloting the registration-based system reform, improving the trading system of the Sci-tech Innovation Board, enhancing the liquidity of Sci-tech Innovation Board stocks, and strengthening domesticAMarket resilience.
In terms of going public through a secondary listing Under the overall guidance of the China Securities Regulatory Commission, the Shanghai Stock Exchange2021year7month23On _, the "Guidelines for the Application of the Issuance and Listing Review Rules of the Sci-tech Innovation Board of the Shanghai Stock Exchange" were formulated and issued.3Registration —— Prospectus for Listing on the Main Board and Other Documents》、《Guidelines for the Application of the Issuance and Listing Review Rules of the Sci-Tech Innovation Board of the Shanghai Stock Exchange No.4Registration —— Contents and Format of the Listing Transfer Report', 'Guidelines for the Application of the Issuance and Listing Review Rules of the Sci-tech Innovation Board of the Shanghai Stock Exchange No.5The 'Sponsorship Letter for Listing on the New Board' and other supporting guidelines for listing on the new board are included. The supporting guideline documents clarify the conditions for listing on the new board and the disclosure requirements for the standardized operation of listed companies during the listing period, simplify the information disclosure requirements for changes in shareholders, adjust matters not applicable to listing on the new board such as expected market value; further highlight the importance and relevance of information disclosure, making it more convenient for investors to consult; and make differentiated information disclosure requirements. The release of this series of supporting guidelines is under the unified deployment of the China Securities Regulatory Commission. Establishing a regulatory connection mechanism for the transfer to the National Equities Exchange and Quotations (NEEQ) with the China Securities Depository and Clearing Corporation Limited is conducive to the smooth progress of various tasks related to the transfer to the NEEQ under a unified standard.
In terms of supervision and review The Sci-tech Innovation Board (STAR Market) implemented the share issuance registration system earlier than the main board market. Referring to the relevant requirements for the proposed stock issuance registration system reform, the STAR Market has established a listing review mechanism centered on information disclosure, with listed enterprises and intermediary institutions ensuring the authenticity, accuracy, and completeness of information disclosure. Centered around the registration system, the market's inclusiveness is enhanced, allowing red-chip enterprises, unprofitable enterprises, and enterprises with differential voting rights to list on the STAR Market. This provides capital for small, medium-sized, high-tech enterprises, accelerates technological innovation in the capital market, and is conducive to the realization of the country's strategies for innovation-driven development and strengthening the nation through science and technology. According to the 'Three-Year Summary Report of the Sci-tech Innovation Board' by LeadLeo Research Institute, the registration-based system has strengthened information disclosure and compacted market responsibilities. The pilot registration-based system on the Sci-tech Innovation Board has provided a foundation forAThe stock market has laid a solid foundation for entering the era of full registration-based trading.
Overall, the institutional innovation related to the Sci-tech Innovation Board in the past year has been beneficial to China's capital market, especiallyAThe further improvement of the regulatory system for the stock market. The innovation of the Science and Technology Innovation Board (STAR Market) system provides more detailed document guidance for enterprises seeking initial public offerings or transfer listings. The refinement and implementation of the system have created a better investment environment for a wide range of investors. The innovative provisions of the STAR Market effectively constrain financial market investment activities while ensuring market liquidity, which is conducive to the long-term sustainable development of China's capital market ecosystem.
Q: If you were to describe the development of the Sci-tech Innovation Board (STAR Market) over the past three years using keywords, what would your answer be? Looking ahead to the development of the STAR Market over the next three years, which more promising changes do you think will occur?
A: Keywords: Boom in development
Over the past three years, the Sci-tech Innovation Board (STAR Market) has shown vigorous vitality. From a pilot field to a new high ground, the exploration and development path of the STAR Market is of great significance to China's capital market. Since its establishment, the STAR Market has positioned itself to serve technology innovation enterprises that align with national strategies, break through key core technologies, and are highly recognized by the market. The STAR Market has achieved Formulating more inclusive listing conditions has facilitated direct financing for various science and technology innovation enterprises, enhancing the service level of the capital market in improving China's core technological innovation capabilities. At the same time, the Sci-tech Innovation Board is an important part of the comprehensive registration-based system reform. By further optimizing the listing process and improving the efficiency of IPOs, it aims to concentrate more capital in the field of technological innovation, thereby better addressing the 'bottleneck' issues in the technology sector. Over the past three years, the institutional system of the Sci-tech Innovation Board has been gradually improved, and a series of innovative systems have taken effect, supporting 'hard technology' enterprises with a new world of possibilities.
As of2022year6month30Daily, supply and demand of listed companies on the Sci-tech Innovation Board431Home, total market value5.91trillion yuan, inATotal number of listed companies on the stock marketAProportion in total market value of stocks is8.9%and6.3%In the first half of this year, the number of newly listed companies on the Sci-tech Innovation Board was54Home, accounting for the total number of newly listed companies171home)31.6%It is significantly more than that of the main board. In terms of industry distribution, companies listed on the Sci-tech Innovation Board are mainly concentrated in electronics, pharmaceuticals and biotechnology, power equipment and new energy, computers, and national defense. In industries such as engineering and basic chemicals, there are very distinct industry distribution characteristics. According to the 'Three-Year Summary Report of the Sci-tech Innovation Board' by LeadLeo Research Institute, over the past three years, listed companies on the Sci-tech Innovation Board have made tangible progress in performance and operational capabilities. 2019till2021During the year, the average annual compound growth rate of operating revenue of the top ten companies by market value reached38.7%In terms of net profit, the average annual compound growth rate of net profit for the top ten companies by market value reached99.0%This fully demonstrates that the Sci-tech Innovation Board has effectively supported the development of China's real economy, especially emerging technology-based enterprises. It has aligned with the development trend of technological innovation and industrial upgrading, and high-tech research and development efforts have entered a sustainable phase.
Standing at this historical juncture, facing the downturn in real estate, recurring epidemics, cyclical factors such as global inflation, and the structural forces for China's economic transformation and upgrading remain vibrant. China has accumulated a large number of industrial clusters in industries such as new energy vehicles, semiconductors, aerospace, biomedicine, cloud computing, and new materials. With the support of capital markets such as the Sci-Tech Innovation Board (STAR Market), it is expected to achieve leapfrog development. At the same time, a series of systems on the STAR Market are expected to be further improved, such as through fair pricing, information disclosure, governance norms, and various methods and channels to urge science and technology innovation enterprises to continuously improve their quality. Secondly, the future of the STAR Market will Strengthen its interaction, linkage, and coordination with other sectors Promote the deepening reform of the entire market and build a modern capital market system with Chinese characteristics that is standardized, transparent, open, dynamic, resilient, and innovative. Looking ahead, the Sci-tech Innovation Board will continue to innovate and make even more remarkable achievements.
