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Shenzhen Stock Exchange (SZSE) recently issued Guideline on the Information Disclosure of LED Industrial Chain and Medical Device Industries on ChiNext Board (hereinafter referred to as the “Guideline”) in order to implement the spirit of the 2017 National Securities and Futures Supervision Work Conference, robustly promote law-based comprehensive strict supervision and further improve the industrial information disclosure regulations system. Previously, SZSE has successively issued the guidelines on eight industries of ChiNext Board including radio film and television, bio-pharmaceutical, photovoltaic, energy conservation and environment protection, internet games and internet videos. According to the market feedback, the implementation of those guidelines has brought sound effects as the timeliness, efficiency, readability and comparability of information disclosure by interested listed companies have been greatly improved. And this helps the market research and analysis of ChiNext Board-listed companies develop with greater ease and in greater depth.
The Guideline recently issued accords with the requirements on the information disclosure of listed companies against the backdrop of national economic transformation and upgrade. ChiNext Board is positioned to serve national strategic emerging industries. There are currently more than 600 companies listed on the board where many outstanding companies in emerging industries gather. Take LED and medical device sectors as an example, there are 11 ChiNext Board-listed companies engaging in the business related to LED industrial chain and 21 companies engaging in the business related to medical device sector. All of these enterprises feature distinct industrial characteristics in their business models and profit patterns. Due to the lack of information disclosure standards that tally with industrial features, however, this type of listed companies has not made sufficient information disclosure on their business models, core competitiveness and special risks etc., which makes investors difficult to have comprehensive knowledge, analysis or comparison of the industrial situations and corporate conditions. Therefore, the system of information disclosure rules needs further supplement and improvement.
During the development of the Guideline, SZSE upheld the “open, transparent and market-oriented” principle to vigorously take the reasonable suggestions of investors. When finishing the draft, SZSE released questionnaires to a total of 2,107 small and medium investors for suggestions, invited the senior industrial analysts of domestic securities companies to involve in developing the guideline, and solicited two rounds of advices from the said 11 LED companies and 17 medical device companies. Through all these moves, SZSE collected massive feedback and opinion, some of which were adopted after thorough research and study to make the Guideline more close to the actual conditions of listed companies and fit for the needs of investors.
In consideration of the features of LED industrial chain and the industry, SZSE has refined its information disclosure requirements from the following aspects. First are industrial pattern and corporate competiveness, which are helpful to investors in reading and understanding the basics of a company and its industry. Second are the key product technology or performance indicators showcasing LED industrial features, such as the comprehensive yield of encapsulated products and the pixel pitch of display products. Third are the production and sales volume and sales pattern of main products. Fourth is whether there are material changes in the industrial policies, foreign exchange rates or trade policies in major overseas export regions. Fifth are the core clauses in LED energy conservation contracts and contracts on the exchange of advertising interests with LEDs.
As to the medical device sector, SZSE has specified the following aspects in the Guideline. First is the information on the medical devices a company own, including quantity of registration certificate, type of devices and clinic uses. Second are the production and sales conditions, production and purchase model and sales model of major medical equipment products. Third is the information on the companies’ specific business model. Fourth is the progress of product R&D and registration which should be disclosed according to the principle of importance. Fifth is announcement of explanation when there are material changes in registration certificates of major products, industrial policies and other interested aspects.
Next, SZSE will continue to steadily press ahead the industrial supervision over ChiNext Board-listed companies. It will take innovative and growth enterprises as the entry point to study industrial features and summarize supervision experience so that investors’ legitimate rights and interests will be fully protected, the efficiency and pertinence of information disclosure constantly enhanced and the release of relevant guidelines accelerated. As a result, the system construction of industrial information disclosure rules will be energetically promoted.
