In recent years, with strong support from national policies, specialized and innovative enterprises have continued to expand in scale and are accelerating their entry into the capital market. According to Wind Information data statistics, as of June 6th, this year, 32 specialized and innovative enterprises have successfully listed on the A-share market, raising over 40 billion yuan in initial public offerings.
What are the attractions of the Sci-tech Innovation Board (STAR Market) for specialized and innovative enterprises? How do you view the concentrated listing of specialized and innovative companies in the machinery and equipment industry this year? Why are companies in the electronics industry favored by capital? What measures need to be improved to support the listing of specialized and innovative enterprises? Dr. Wang Xin, a global partner and President of Greater China at Frost & Sullivan (Frost & Sullivan, abbreviated as "Frost & Sullivan"), recently spoke with Securities Daily to discuss the listing path for specialized and innovative enterprises.
Securities Daily
Q: What are the attractions of the STAR Market for specialized and innovative enterprises?
Dr. Wang Xin:Listed companies on the STAR Market often base themselves on technological innovation, providing an important driving force for the active development of China's market economy through a business model that combines "hard technology" + "technological model innovation." Especially since the "14th Five-Year Plan," the state has further encouraged the development of technology-driven real economies, treating high-tech and strategic emerging industries as a core link in promoting the high-quality development of China's economy. Whether it is the theme guidance of "technological innovation" or "hard technology," these align with the development positioning of specialized and innovative enterprises. As key technology researchers and industry leaders, hard-core technology itself is the foundation for enterprise commercialization. From the perspective of capital market development, the STAR Market is one of the best platforms for specialized and innovative enterprises to achieve further integration and upgrading from the innovation chain, talent chain to the scaled industrial chain and market capital chain.
In addition, the proportion of institutional investors on China's STAR Market is relatively higher, resulting in less market volatility, which can better protect the long-term corporate value of technology-driven enterprises and reduce value fluctuations during certain years or cycles. Therefore, it seems that specialized and innovative enterprises and the STAR Market platform develop and achieve together more so than against each other.
Q: How do you view the concentrated listing of specialized and innovative companies in the machinery and equipment industry this year? Why are companies in the electronics industry favored by capital?
Dr. Wang Xin:The innovation, research and development, application, and commercialization of technology often require a certain development cycle, especially from product technology innovation to commercial verification, which requires sufficient market practice validation. Only when the commercial capabilities and profitability potential of technology companies are recognized by market investment can they receive greater affirmation in the secondary capital market.
Looking at the market development in 2021, industries such as smart cities and smart manufacturing in China have reached a mature commercial stage after several years of cultivation. Compared to other technology-driven companies, the business models of the electronics industry and machinery and equipment industry are basically mature, the profitability of enterprises has been widely verified, and investor education is more mature. Therefore, in recent years, "smart" manufacturing companies have received much attention from capital.
Q: What measures need to be improved to support the listing of specialized and innovative enterprises?
Dr. Wang Xin:From the perspective of enterprise services and product positioning, compared to general consumer enterprises whose products and services are closer to daily life, the product service models of specialized and innovative enterprises are more abstract and profound, often conveying new product service concepts to investors and the public. In this case, general investors often need a relatively mature vertical background in the industry to "understand" the core business essence and market development potential of specialized and innovative enterprises, thereby making a reasonable assessment of them.
However, on the other hand, managers and founding teams of specialized and innovative enterprises often focus deeply on technology itself, with insufficient investment in product service education, resulting in very limited market education effects. Eventually, actual market education still mainly focuses on internal communication, bringing pain points such as opaque industry information and difficult-to-understand company product positioning to general investors. To solve this problem in the future, specialized and innovative enterprises need to collaborate more with their respective industries, inviting professional institutional investors and industry analysis experts to discuss and explain innovative products and emerging models on a larger scale, and conducting market education for companies from three dimensions: company business, industry characteristics, and performance explanation.
In addition, with the continuous deepening of China's green economy strategy, technology-driven specialized and innovative enterprises need to better showcase their social value to various sectors of society, transmitting sustainable business models through the ESG development concept of the "green engine." This will also help improve the risk resistance capabilities of enterprises, optimize valuation results, and form a good development mechanism.
