Translated from Shanghai Securities News
On June 18, Qiu Yong, Chairman of Shanghai Stock Exchange (SSE), delivered a keynote speech at the 2025 Lujiazui Forum on the theme of "Promoting Sustainable and Steady Development of the Capital Market". He believes that the capital market plays a crucial role as a hub. The SSE will fully fulfill its mission of accelerating the building of a coordinated market ecosystem for investment and financing, and supporting China's economic and social development.
SSE STAR Market Reforms Continue to Show Amplifying Effects
In the six years since the establishment of the SSE STAR Market, institutional innovation and market vitality have complemented each other to chart a unique Chinese path for the capital market to serve technological innovation.
First, the SSE STAR Market reforms are continuously showing amplifying effects, creating more favorable conditions for fostering new quality productive forces. In 2024, the total R&D investment in the SSE STAR Market reached 168.1 billion yuan, over 2.5 times the net profit, reflecting a year-on-year growth of 6.4%. The compound annual growth rate over the past three years was 10.7%, with a median R&D intensity of 12.6%, maintaining a leading position among A-share markets. In the past year, 20,000 new invention patents were granted, adding to a total of over 120,000 invention patents in six years. Additionally, the quality and volume of sci-tech innovation bonds have been continuously promoted, with the total amount exceeding 1.1 trillion yuan, increasing their share of corporate bonds from 5.2% to 9.2%.
Second, multiple measures have been implemented to invigorate the M&A market, supporting the transition from old to new growth drivers. In 2024, over 700 asset restructuring plans were disclosed on the SSE, including approximately 60 deals of major asset restructurings, a nearly 50% year-on-year increase. 70% of the acquisition targets operate in emerging industries such as semiconductors and new energy. This year, 341 asset restructuring plans have been disclosed, reflecting a 25% year-on-year increase, including 49 deals of major asset restructurings, a 206% increase compared to last year.
Third, market foundations have been strengthened, raising the investment value of listed companies. Currently, revenue and net profit from SSE-listed companies account for 70% and 80% of the entire market, respectively. In 2024, SSE main board companies reported a total revenue of 49.6 trillion yuan, with net profit and net profit excluding non-recurring profits and losses increasing by 1.9% and 2.4% year-on-year, respectively. Companies on the SSE STAR Market saw a 0.24% year-on-year increase in revenue, with nearly 70% of such companies reporting revenue growth, an increase of 3.09 percentage points year-on-year. STAR Market companies recorded a net profit of 47.52 billion yuan, with 50% of companies experiencing net profit growth, a year-on-year increase of 7.17 percentage points. Dividend distributions from SSE-listed companies exceeded 1.9 trillion yuan, with over 300 billion yuan distributed before the Spring Festival, both reaching historical highs; shareholding increases and repurchases exceeded 110 billion yuan. The average annual growth rate of dividends over the past three years was 15%, with a dividend yield of 3.5%, ranking among the top in the world.
Fourth, more robust investment-side development has led to more abundant inflow of capital. In 2024, the market value of ETFs listed on the SSE surpassed 3 trillion yuan, doubling the number at the beginning of 2024, with holdings of A-shares by social security, insurance and other long-term funds seeing a 33% increase.
Accelerating the development of a Coordinated Market Ecosystem for Investment and Financing
According to Qiu Yong, the SSE will accelerate the development of a coordinated market ecosystem for investment and financing, sustain the positive and stable momentum in the market, and ensure both higher stability and better functionality of the market.
First, the SSE will spare no effort to maintain stable market operations. The focus will be enhancing market’s internal ability to maintain stability, which includes strengthening market monitoring and risk assessment, and supporting listed companies in effectively utilizing various monetary policy tools that support the capital market. Work will be done to further strengthen supervision, solidify the foundation for market development, and optimize the market ecosystem. Efforts will also be made to manage market expectation and boost market confidence.
Second, the SSE will deepen reforms of the SSE STAR Market to enhance its inclusiveness and adaptability. This involves promoting more inclusive and adaptable institutional reforms, improving the mechanisms for precisely identifying high-quality technology enterprises, enhancing the quality and efficiency of pre-communication services at the exchange, expanding the application of the fifth set of standards for listing on the SSE STAR Market, and facilitating the aggregation of market resources towards new industries, new business formats, and new technologies to better serve technological innovation and the development of new quality productive forces.
Third, the SSE will further implement the "M&A Six Opinions" and give full play to the role of the capital market as the primary place for carrying out M&As. Taking the revision of restructuring review rules as an opportunity, the SSE will work to further unblock bottlenecks in the M&A market, strengthen policy introduction, enhance the quality and efficiency of restructuring reviews, so as to create a favorable M&A ecosystem and help more deals of acquiring quality unprofitable assets and mergers between listed companies. With demonstration effects of these deals, the SSE will give a stronger support for further transformation and upgrading.
Fourth, the SSE will vigorously attract more inflow from medium- and long-term funds and focus on building an ecosystem of "long-term funds for long-term investment". This involves making more active moves to introduce medium- and long-term funds, keeping on enriching the product offerings, improving the product line and supporting mechanisms for ETFs, developing the markets for sci-tech innovation bonds and green bonds, enhancing system for stock options, and building up the Chinese index brand, so as to better meet investor needs and contribute to Shanghai's accelerated efforts to build international economic, financial, trade shipping and science and technology innovation centers.
The above information is provided for reference purposes only and does not constitute investment advice.
