On the afternoon of July 22, 2021, the Shanghai Stock Exchange (SSE) held a symposium for the companies listed on the SSE STAR Market, marking the second anniversary of the opening of the board. Among those addressing the meeting were the chiefs of 10 STAR-listed companies in the industries of new-generation information technology, biomedicine, high-end equipment manufacturing, new materials, new energy, and energy conservation and environmental protection. Presided over by Party Secretary and Chairman of SSE Mr. Huang Hongyuan, the symposium was also attended by SSE Vice Presidents Lu Wendao and Dong Guoqun and the heads of the STAR Market-related departments.
In the past two years since the opening of the SSE STAR Market, thanks to the correct leadership of the China Securities Regulatory Commission (CSRC) and the strong support of all sectors of society, steady progress has been made in the development of the market, with the implementation of the pilot program of registration-based IPO system further advanced. The clustering and demonstration effects of the STAR Market have continued to increase in support of the "hard tech" industries. As of July 22, up to 313 companies had been listed on the SSE STAR Market, with a total market value of RMB4.95 trillion recorded and more than RMB380 billion raised in the IPO process. The companies in the industries of new-generation information technology, biomedicine and high-end equipment manufacturing account for nearly 75% of the total. The market has functioned well as an "experimental field" for reform. 19 unprofitable enterprises, 2 enterprises with special equity structure and 3 red chip enterprises have been listed. From acceptance of application to completion of registration for the SSE STAR Market, the review cycle is greatly shortened, with an average of over 6 months. A number of key institutional innovations have been tested in the "experimental field" to be replicated and promoted. The SSE STAR Market has been running smoothly on the whole. The primary market maintains a normal pace of issuance, totaling RMB75.5 billion in the IPO process since the beginning of this year, or accounting for one third of the total amount of funds raised in the A-share market during the same period. The market expectations are clear and stable. In the secondary market, the indexes are stable with increases, trading has been moderately active, and the structure of investors has improved continuously, with the daily stock volatility lower than the overall market level.
According to the chiefs of the listed companies attending the meeting, the reform of piloting the registration-based IPO system on the SSE STAR Market has brought gains to the companies in multiple aspects. In terms of issuance and listing, through institutional innovations, the SSE STAR Market has greatly enhanced the capital market's inclusiveness for technology and innovative companies; from the perspective of technology and research, with the raised funds, the STAR-listed companies have continued to invest in research and development, reinforcing their determination and confidence in making major breakthroughs in the cutting-edge technology and bottleneck fields; in the aspect of attracting talents, with the capital resources, brand image, and equity incentive mechanisms, the STAR-listed companies have significantly improved the ability to gather and retain talents; with regard to boosting the industry, the brand of the SSE STAR Market has reduced the recognition cost and improved the industries' capacity for integrating resources. The suggestions put forward to the SSE by the listed companies, in accordance with their own needs for strengthening and expanding themselves, included further encouraging mergers and acquisitions and reorganization on the industrial chains, improving refinancing efficiency, supporting the improvement of information disclosure, and rationalizing tax policies for equity incentives, etc.
An SSE official said that the insights of the representatives of the STAR-listed companies will help the parties concerned to strengthen their confidence, focus on the problems, and ensure stable and further progress in the reforms. Moreover, the pertinent opinions from the company chiefs based on their in-depth analysis will provide important reference for the SSE to improve relevant business, and will soon be accepted and internalized. Going forward, the SSE will focus on the following four aspects to boost the high-quality development of the SSE STAR Market and lay a solid foundation for the implementation of the registration-based issuance system in the entire market: first, we will continue to adhere to the problem-oriented approach and the mission of the SSE STAR Market, and focus on supporting the companies with key and core technology; second, we will continue to stick to the information disclosure-centered principle, and raise the threshold for the quality of the listed companies; third, we will continue to tighten the responsibilities of intermediary agencies, and urge market entities to perform their duties; and fourth, we will actively study measures to improve the pricing of new shares with heightened supervision. We hope that the STAR-listed companies will make joint efforts with the SSE to achieve sustainable development in the main business, focus on R&D investment, step up efforts in making breakthroughs in key and core technology and bottleneck fields, adhere to regulated operations, steadily enhance the quality of listed companies, and take actual steps to live up to the trust of investors and society.