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May 27, 2018 was the 14th birthday of the SME Board. In the past 14 years, the SME Board has based its development on standardization, holding fast to the bottom line of no systemic risks, making progress while maintaining stability. It has been leading the most dynamic group in the economy of our country to work with intensive and earnest efforts and cultivated a large number of industrial leaders, playing an important role in supporting national strategies, facilitating economic transformation, and serving society and the mass public. SZSE answered reporters' questions on the development of the SME Board in the last 14 years.
Q 1: How is the performance of the SME Board since its establishment 14 years ago?
A: Since the establishment of the SME Board, the performance of listed companies has grown steadily, with a cumulated total operating revenue of CNY17.92 trillion and a cumulated total net profit of CNY1.25 trillion has been realized. In the past 14 years, the average annual operating revenue of listed companies has increased from CNY660 million to CNY4.297 billion, with an average annual compound growth rate of 14.32%; while the average annual net profit has increased from CNY39 million to CNY306 million, with an average annual compound growth rate of 15.83%. While the supply-side structural reform continues to deepen and advance, the overall performance of the board has progressed steadily, displaying the vitality of SMEs and the private economy in industrial restructuring and economic transformation and upgrading.
Q 2: What are the reforms and innovations carried out in the SME Board in the last 14 years?
A: The SME Board was born with a historic mission to find a path for building a multi-tiered capital market. In the past 14 years, the SME Board has always been holding high the banner of reform and innovation and has taken the lead in exploring, establishing and implementing a series of effective regulatory measures. Specifically, they include the following aspects:
First, serving and deepening the reform of the capital market. The SME Board took the lead in completing the split-share reform and became the first full-circulation board in the A-share market. It was also the first to push forward the reform of the delisting system by introducing new indicators such as the appropriation of funds by related parties, external guarantees, public censure, and market transactions as delisting standards.
Second, promoting law- and regulation-based operation of enterprises and strengthening information disclosure. It took the lead in establishing the SME Board integrity archive system, taking integrity building as the top priority of the construction of the board. It was also the first to implement the systems of annual special auditing of raised funds, a special deposit account for raised funds and the tripartite agreement in order to strictly regulate the use of raised funds. Meanwhile, it was the first to launch the continuous-supervision commissioner system and the online information disclosure column, besides the implementation of classified regulation system to conduct differentiated supervision on companies at different risk levels.
Third, strengthening the protection of investor rights and interests. It took the lead in introducing the guidelines for the protection of the rights and interests of small and medium investors and the guidelines for fair disclosure. It was also the first to implement the “frozen upon appropriation” system and to establish the annual report briefing system.
Q 3: What are the actions taken by SME Board companies to serve the national strategies?
A: While the SME-Board-listed companies achieved self-development and continued to be better and stronger, they have also actively responded to the deployment of national strategies and have played an active role in serving the country's overall strategy. Their performance can be summed up in the following aspects:
First, serving the structural reform of the supply side to promote economic transformation and upgrading. SME-Board-listed companies have been focusing on the innovation-driven development and the fostering of new economic drivers. From 2008 to 2017, the annual average R&D investment increased from CNY33.02 million to CNY137 million, with an average annual compound growth rate of 17%. At present, over 70% of the companies belong to the high-tech field. High-end equipment manufacturing, new generation information technologies and the digital creative sectors, with the help of smart manufacturing and transformation and upgrading, have seen rapid growth in operating revenue and net profits, becoming the stabilizer for keeping the economic growth pace unabated in the New Normal and the new engine for converting developing energy. Furthermore, SME-Board-listed companies make full use of the market instrument of M&As to optimize resources allocation, and facilitate business transformation, upgrading and development. As of May 2018, there are a total of 398 restructurings conducted, accounting for CNY772.3 billion, over 60 percent of which are industrial integration.
Second, actively serving the national Belt and Road Initiative. Companies listed on the SME Board steadily push forward industrial deployment in countries covered by the Belt and Road Initiative to achieve global development. As of May 2018, 244 countries have participated in the Belt and Road construction, with their business reaching 103 countries and regions and accumulated investment totaling CNY120 billion.
Third, participating in pollution prevention to build a beautiful China. SME-Board-listed companies continue to increase investment in energy conservation and environmental protection when conducting business activities. In 2017, total input in environmental protection amounted to CNY16.4 billion, with a comparatively high year-one-year increase of 18.84%.
Fourth, helping with poverty alleviation and fighting the tough battle of precise poverty alleviation with earnest efforts. SME-board-listed companies spent about CNY11.7 billion on poverty alleviation, providing vocational training to over 50,000 people in poverty, funding 14,000 impoverished students and lifting 240,000 people out of poverty.
