A concept photo of China's stock market Illustration: VCG

Five years after its founding, the Beijing Stock Exchange (BSE) has grown into a vibrant and mature fundraising venue for innovative Chinese small and medium-sized enterprises (SMEs), helping nurture industry leaders in high-end manufacturing, new energy, new materials, semiconductors and more. 

As of Tuesday, the number of listed companies had grown more than fourfold, from 81 to 339, while total market capitalization had grown from less than 300 billion yuan ($44.64 billion) at the outset to about 850 billion yuan, the Global Times learned on Wednesday.

The number of qualified investor accounts on the stock exchange has topped 11 million, nearly triple the number at the time of the exchange's inauguration. More than 3,000 public funds trade on the market, and institutional investors' share of turnover has risen from 9 percent at the launch to 24 percent, the exchange said in a statement sent to the Global Times.

As the BSE marks its fifth anniversary, analysts said that its development shows China has formed a multi-tier capital market, with each board given a distinct position, and all channeling capital into the country's high-tech and technological self-sufficiency drive.

While the Shanghai and Shenzhen exchanges take the larger, more mature issuers, the Beijing exchange - a relative newcomer - has used the registration-based listing system to carve out a differentiated path serving innovative SMEs. More than 60 percent of companies now listed on the BSE are national-level "little giant" firms, a designation for specialized and innovative SMEs.

According to industry insiders, the BSE has also provided a clear path upward for firms listed on the National Equities Exchange and Quotations (NEEQ), also known as the "new third board," which aims to provide small, medium-sized and micro-sized enterprises with an efficient and low-cost financing platform. This has opened a listing door that was previously shut to hard-tech firms that are still in a period of heavy research and development spending and not yet profitable.

"BSE companies come from the NEEQ innovation tier, putting into practice the logic of nurturing firms step by step: cultivate, take to maturity, list. That gives the pipeline of potential listings real room to grow, with ample capacity for further expansion," Yang Delong, chief economist at Shenzhen-based First Seafront Fund, told the Global Times on Wednesday.

With regard to financial performance, the latest interim reports show that the 339 BSE companies posted combined first-half revenue of 138.57 billion yuan, or 409 million yuan on average, up 15.11 percent year-on-year. Combined net profit was 11.78 billion yuan, or 34.76 million yuan on average, up 17.58 percent. Of the total, 282 companies were in the black, meaning more than 80 percent of the listed companies had turned a profit, news portal Yicai.com reported on Wednesday.

The BSE said that it will keep making the rules more inclusive and adaptable, and widen the listing path for SMEs. On the financing side, it will raise both the quality and the innovative content of the company mix. On the investment side, it will expand the product lineup and do more to bring in medium- and long-term capital.

Industry insiders said that they expected the BSE to play a bigger role in building a resilient fundraising ecosystem for Chinese SMEs. They predicted that more measures could be rolled out on both the financing and investment sides to draw in additional capital, improve liquidity and expand the board.

Global Times