This year marks the 30th anniversary of the construction and development of the Beijing Financial Street. At this critical moment, It’s my great honor here at the Annual Conference of Financial Street Forum. Here, on behalf of Shenzhen Stock Exchange (SZSE), I would like to extend our warm congratulations on the holding of the Annual Conference and express our sincere thanks to those who have showed care and support to the reform and development of SZSE.

I. The quality and structure of the market have improved steadily and “new engines” featuring “excellent innovation and high growth” have emerged

SZSE has always been making improving the quality of listed companies as the top priority. We have adhered to the principle of co-building, co-governance and sharing and have continuously invested efforts in deepening reforms, strengthening regulation and optimizing services. The SZSE-listed companies have had positive changes in structure and general look and have favorable overall development momentum. They have effectively supported the sound, sustainable and stable development of capital market and the high-quality development of economy.

First, with investment and financing channels further expanded, our services for national strategies have become more effective.Over the past two years and more, the pilot project of the registration-based IPO system on ChiNext has been fruitful as a link of connecting. As of this October, the cumulative funds raised via the IPOs and refinancing on ChiNext under the registration-based IPO system exceeded CNY 720 billion. Last April, the Main Board and the SME Board of SZSE were successfully merged and the IPO financing function of the Main Board was restored. Currently, the Main Board has raised a total of CNY 410 billion funds via IPOs and refinancing. Last June, the first publicly offered infrastructure REITs in Shenzhen market were successfully listed, filling in the gap in major financial product categories in China and effectively facilitating the positive circulation between existing assets and incremental investments. The financing scale of innovative green financial products on SZSE exceeds CNY 470 billion and the issuance volume of innovative venture bonds and technological innovation bonds is over CNY 28 billion. They have continuously supported the green development and the building of self-reliance in high-level science and technology. In addition, over CNY 84-billion COVID-19 control bonds have been issued to fully support the real economy overcoming the impact of the pandemic. This July, the “China-Switzerland Stock Connect (SZSE-SIX)” was officially launched. The global depository receipts of companies such as GEM Co., Ltd., Gotion High-tech and Lepu Medical were successfully listed on the SIX Swiss Exchange, realizing high-level interconnection of “two types of resources of the two markets”.

Second, the strategic emerging industries saw a growing number of companies getting listed, and the “excellent innovation and high growth” features have become more distinct.The registration-based IPO system, which is the basis of the deepening of the reform of the entire capital market, is yet to be implemented on the main boards to redefine, energize and freshen up the market. The ChiNext Board is welcoming its 13th anniversary of founding. It currently has over 1,200 listed companies, with total market capitalization of over CNY 11 trillion. The ChiNext Board has a clear advantage in the fields of advanced manufacturing, digital economy and green and low-carbon development. It is home to the nine major strategic emerging industries including new-generation IT, new energy, new materials, biomedicine and high-end manufacturing. Their total market capitalization accounts for more than 70%. Besides, the ChiNext Board has been continuously building a new model for cultivation of innovators. After the merger, the Main Board has gathered more than 130 industry-leading players and nearly 50 leading sci-tech companies. It is nesting place to market-based blue chips and segment champions. Over the past three years, the compound growth rates of the operating revenue and net profit of SZSE-listed companies reached 15% and 17% respectively, showing strong growth momentum, and a group of quality chain enterprises including CATL, BYD, Mindray, Hikvision and Inovance have emerged. SZSE is contributing its bit to maintaining the stability of the industrial chain, supply chain and value chain.

Third, with the delisting reform effectively implemented, the market listing & delisting ecosystem has become more orderly.This year is a critical year to the implementation of the new delisting rules. SZSE has earnestly implemented theImplementation Plan for Improving the Delisting Mechanism of Listed Companiesof the Commission for Deepening the Reform in All Respects of the central government and focused on building a regular multi-channel delisting mechanism. Since the beginning of 2022, 24 SZSE-listed companies were mandatorily delisted, close to the total number of companies that were delisted mandatorily over the past three years. A group of problematic companies were cleared in a centralized manner. The “stable delisting” measure has produced significant effect. A sound market ecosystem featuring “effective listing and delisting mechanisms and survival of the fittest” is forming at a faster rate.

Fourth, with risks in key areas decreasing, the handling of violations has become more efficient.According to the category-by-category disposal principle, SZSE market has completed remediation cases of more than CNY 100 billion illegal fund occupation and guarantee, securing a decisive victory in the battle of clearing arrears and releasing guarantee. We have kept reducing stock pledge risk. The number of SZSE-listed companies with a high proportion of pledged shares has decreased by two thirds. We have firmly implemented the “zero tolerance” requirements and cracked down on illegal acts according to law. Since the beginning of 2022, SZSE has given disciplinary punishment to more than 120 listed companies and relevant responsible persons, showing significant improvement in efforts.

II. Listed companies are faced with “new challenges” in advancing structural transformation and improving quality and efficiency

In the first three quarters of 2022, as positive factors of the market gradually increased and the upstream and downstream profit structures continued to improve, SZSE-listed companies demonstrated a positive recovery trend in general, but we should pay attention to cost pressure and slow recovery in consumer demand. It’s more urgent for some companies to promote structural transformation and improve quality and efficiency. In this process, they need to solve some problems hindering development.

First, some listed companies lack the focus on main business.Some companies still were inclined to conduct diversified M&As and some of their new business segments are very different from their main business. The integration effect after reorganization is poor and the fulfillment rate of performance commitments is less than eighty percent. They have deviated from the direction of the supply-side structural reform and missed the opportunity to focus on main business and refine it to build an advantage. That can be seen in the M&A fever from the gaming and TV & film sectors to the chip and new energy sectors.

Second, the long-term investment and value investment functions in state-owned assets and SOEs need to be enhanced.This year is the closing year of the three-year action of the reform of state-owned enterprises (SOE). Thecompound growth rates of the operating income and net profit ofSZSE-listed SOEs over the past three years are 18% and 35% respectively, both exceeding the average levels of the market, demonstrating their role as the “stabilizer” and “cornerstone” of the economy. However, affected by factors like investor relations management, institutions’ roadshows and insufficient market education, the market still needs to improve the value discovery and resource allocation functions for SOEs.

Third, intermediaries fail to give full play to their functions and roles.With the increase in the number of listed companies and their development divergence and the formation of leading enterprises, the demand for integrating resources and industries and improving development quality through high-quality capital operation is increasing day by day. However, the development of our professional intermediaries and specialized financial instruments currently cannot meet such demand. Intermediaries that offer services like sponsorship, underwriting, financial consulting, audit & evaluation and legal service still need to strengthen their practicing capability and the sense of responsibility and work faster to improve areas of weakness.

III. Explore a “new path” that meets high-quality development requirements firmly based on the national situation and the market situation

The present and a period to come will still be an important strategic opportunity period for high-quality development of listed companies. SZSE will take it as the main task to implement in depth the new round of the action plan for improving the quality of listed companies, explore a high-quality development path through “Three Strengthens and “Three Builds”, and promote the high-quality development of listed companies with high-quality policies, high-quality regulation and high-quality services.

First, SZSE will strengthen the adaptability of policies and regulations and build a diversified, inclusive innovation-supporting market mechanism.Led by the registration-based IPO system reform across the whole market, we will accelerate the improvement of the evaluation criteria of growth innovators and startups on the ChiNext Board, highlight the blue-chip market characteristics of the Main Board, and improve the inclusiveness of the market. We will study and further optimize the M&A and reorganization refinancing mechanism and support listed companies focusing on main business, standardizing development and enhancing competitiveness. We will continue to refine the self-discipline rules system for listed companies, explore, establish and improve the layered and differentiated information disclosure arrangements, improve the adaptability and inclusiveness of information disclosure policies under the new situation, and study and formulate special information disclosure guidelines for key areas such as advanced manufacturing, digital economy and green and low-carbon development. Meanwhile, we will continue to increase the supply of innovative products, study and develop relevant themed fund products, and guide medium and long-term funds to invest in quality assets.

Second, SZSE will strengthen the effectiveness of regulation and build a targeted, efficient listed company regulation system.We will promote in depth the regulatory transformation, optimize classified regulation, focus on head regulation and handling of risks and problems, and improve the differentiated constraint mechanism. We will strengthen continuous regulation, keep a close eye on the “critical minority”, strengthen intermediaries’ performance of duties, and relentlessly crack down on vicious violations of laws and regulations. By strengthening technology-enabled regulation, we will build a “manual + technology + platform” deeply integrated regulatory system, and make regulation more digital and intelligent.

Third, SZSE will strengthen the synergy of service and build a sound market ecosystem featuring co-building, co-governance and sharing.We will work unswervingly both to consolidate and develop the public sector and to encourage, support and guide development of the non-public sector. We will build a listed company service system that covers the whole chain and through the whole process, support and deepen the reforms of state-owned assets and SOEs, and facilitate the development of the non-public sector. We willsupport Covid-19 prevention and control, and pursue economic and social development in a well-coordinated way and strive to provide more flexible and more people-oriented regulation. We will intensify special training on corporate governance to improve the duty performance ability of the“critical minority”. We will also strengthen coordination with relevant parties such as local governments to constantly optimize the policy environment and the ecosystem.