Enhancing Financing Services for Specialized SMEs

On October 20th, the Beijing Stock Exchange, the National Equities Exchange and Quotations (NEEQ), and the Ministry of Industry and Information Technology (MIIT) signed a strategic cooperation agreement at the 2024 Financial Street Forum Annual Conference, committing to jointly improve the financing service system for specialized, refined, distinctive, and innovative small and medium-sized enterprises (SMEs).

According to the strategic cooperation agreement, the Beijing Stock Exchange, NEEQ, and MIIT will enhance collaborative synergy, cooperating in three aspects: system docking, enterprise cultivation, and work coordination, to form a strong joint force to promote the development of specialized, refined, distinctive, and innovative SMEs.

On the same day, the Beijing Stock Exchange and NEEQ released the Comprehensive Service Action Plan for the Development of Specialized, Refined, Distinctive, and Innovative SMEs. The plan proposes to innovate the listing review mechanism, open a green channel for specialized, refined, distinctive, and innovative SMEs cultivated in regional equity markets, and support the listing of unprofitable early-stage specialized, refined, distinctive, and innovative SMEs.

Promoting Capital Empowerment for Specialized, Refined, Distinctive, and Innovative SMEs

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According to the strategic cooperation agreement signed by the Beijing Stock Exchange, NEEQ, and MIIT, the three parties will deepen the system docking that promotes the development of specialized, refined, distinctive, and innovative SMEs. They will strengthen the docking of listing and specialized, refined, distinctive, and innovative cultivation systems, support high-quality specialized, refined, distinctive, and innovative SMEs to list and trade on the Beijing Stock Exchange and the New Third Board, and help these SMEs use capital market tools such as equity financing, mergers and acquisitions, and equity incentives to achieve high-quality development.

At the same time, they will enhance the cultivation services that promote the development of specialized, refined, distinctive, and innovative SMEs. They will identify a group of specialized, refined, distinctive, and innovative SMEs that play an important role in the industrial chain, jointly implement financing promotion actions for specialized, refined, distinctive, and innovative SMEs, promote better capital empowerment for these SMEs, and highlight support for the development of new quality productive forces.

In addition, they will establish a work coordination mechanism to promote the development of specialized, refined, distinctive, and innovative SMEs. They will establish a mechanism for information sharing and dedicated personnel docking, promote comprehensive industry-finance docking, and carry out specialized, refined, distinctive, and innovative themed publicity and exchange activities in collaboration, to comprehensively improve the quality and efficiency of services for specialized, refined, distinctive, and innovative SMEs.

Next steps, the Beijing Stock Exchange and NEEQ will continue to deepen cooperation with MIIT, earnestly promote the implementation and effectiveness of the strategic cooperation agreement, and build the Beijing Stock Exchange and the New Third Board into an important service platform for the listing of specialized, refined, distinctive, and innovative SMEs, jointly polishing the "specialized, refined, distinctive, and innovative" golden brand.

Innovating the Listing Review Mechanism

On the same day, the Beijing Stock Exchange and NEEQ also released the Comprehensive Service Action Plan for the Development of Specialized, Refined, Distinctive, and Innovative SMEs, introducing four aspects of service measures for specialized, refined, distinctive, and innovative SMEs.First, strengthen the cultivation and service for small and medium-sized enterprises (SMEs) with specialization, refinement, uniqueness, and innovation. Conduct in-depth "cluster and park" research visits to truly understand the development needs of these specialized SMEs. Deepen cooperation with government departments such as industry and information technology, and finance to provide precise services for specialized SMEs with the intention of listing. Collaborate with market institutions to provide specialized SMEs with comprehensive services such as on-site diagnosis and talent training. Regularly organize capital market-focused training sessions for key personnel of specialized SMEs, helping enterprises to standardize in advance according to their development stages and listing standards, and continuously enhance the governance capabilities and public company awareness of SMEs.

Second, enhance the review support for specialized SMEs. Innovate the listing review mechanism and open a green channel for specialized SMEs cultivated in regional equity markets, allowing qualified specialized "little giant" enterprises and manufacturing single-champion enterprises to list quickly through public review. Consider the enterprise's specialization, refinement, uniqueness, and innovation capabilities as important references for judging the enterprise's innovative attributes. Support the listing of specialized SMEs in the initial stage of profitability, encourage listing of specialized SMEs with high R&D investment and recognized by institutional investors, and support the listing of specialized SMEs with breakthrough core technologies, standardized production and operation, and good development prospects on the Beijing Stock Exchange.

Third, promote the high-quality development of specialized SMEs. Support specialized SMEs to legally and compliantly establish equity incentives and employee stock ownership plans before listing, and continue to implement incentives after listing to promote key talents and enterprises to form a community of interests. Encourage listed specialized SMEs to carry out mergers and acquisitions of upstream and downstream industry chains through private placements of common stock, preferred stock, convertible bonds, and other payment tools.

Fourth, help specialized SMEs obtain more financial resources. Guide private equity funds, government-led funds, and industry funds to strengthen investment in specialized SMEs, and encourage social capital to "invest early, invest small, and invest in innovation." Support qualified specialized SMEs to issue corporate bonds, and encourage policy institutions and market institutions to provide credit support for specialized SMEs to issue sci-tech innovation bonds. Promote banks to introduce exclusive credit products and evaluation systems for specialized SMEs, providing diverse and rich credit support services. Conduct research and development of the Beijing Stock Exchange-listed specialized SME index, and launch relevant indices in due course to promote the compilation and release of cross-market specialized SME indices in Shanghai, Shenzhen, and Beijing.