Beijing Stock Exchange, three years after its debut: 80% of listed companies are profitable

The Beijing Stock Exchange (BSE), launched in 2021 to support innovative small and medium-sized enterprises (SMEs) in China, turned three years old this week.

According to the data of the buriser operator, taken by china.org.cn, the 251 companies listed on the BSE maintained their stable operations in the first half of the current year, and more than 60% of them reported an increase in revenues. At the same time, over 80% of the companies listed on the BSE made a profit between January and June 2024.

According to the cited data, the combined operating income of the listed companies was 78.5 billion yuan (about 11.05 billion dollars) and the net profit attributable to shareholders was 5.4 billion yuan.

Currently, more than 50% of the companies listed on the Beijing Stock Exchange are included in the national catalog of "small giants", which represent the new elite of small and medium-sized enterprises engaged in production, respectively specialized in a niche market and benefiting from technology last hour.

In the second quarter of the current year, the combined operating income and net profit of these firms were 22.01 billion yuan and 1.67 billion yuan, respectively. In the first half of the year, companies listed on this stock exchange invested a total of 3.73 billion yuan in research and development, up 2.47% from the previous year, the cited source noted.

At the end of June, the number of qualified investors on the BSE approached 7.05 million, up 292,300 from the end of last year, according to the data.

• Analysts: BSE will become a well-regulated, influential and dynamic market in the coming years

Analysts predict that the BSE will turn into a well-regulated, influential and dynamic stock market in the next few years, noting that the improved services of this exchange will contribute to the modernization and economic transformation of the country, writes globaltimes.cn.

In its three years of existence, BSE has directed a significant flow of capital to SMEs involved in technology, advanced manufacturing and green development. BSE data shows that among the eligible investors are institutional investors including private equity, public funds and insurance companies.

As of September 1, the combined capitalization of the 251 companies listed on the BSE reached 300 billion yuan ($42.23 billion). IT companies represent over 90% of listed companies, the cited data shows.

"Unlike the Shanghai and Shenzhen Stock Exchanges, the BSE is a market more focused on early-stage, small and innovative companies," said Wan Zhe, an economist and professor at the Belt and Road School of Beijing Normal, as quoted by the Global Times. University. He noted: "The establishment of the BSE is of vital importance in creating a multi-level capital market, improving support for SMEs and promoting innovation-based development. Over the past three years, the development of BSE has always followed its strategic positioning and development objectives, with several trading systems launched and various investors participating in the market".

A managing director of a Beijing-based company, who declined to be named because the firm is in the process of going public on the BSE, said: "The Beijing Stock Exchange is a perfect platform for SMEs to gain access to capital and then they can expand their investment in research and development and production".

The BSE's launch came just two months after China announced plans to set up a new stock exchange, a move widely welcomed by the market as it aims to address the long-standing problem of financing SMEs.

Later, in September 2023, the China Securities Regulatory Commission released guidelines to boost the development of the BSE, calling for listings of "high-quality" companies, more products in the mutual fund segment, and expanded participation of overseas investors .

"Looking forward, the BSE should accelerate the listing of high-quality innovative companies, especially by expanding the fundraising channel for "little giants,'" said Tian Xuan, vice president of Tsinghua University PBC School of Finance, adding: " Meanwhile, efforts are needed to strengthen the market foundation, improve the legal framework and protect investors' rights. BSE should further improve its capital market services, for example by launching creative themed investment products".

In January 2024, BSE's bond market was launched, marking a key step in the development of the stock exchange.

In this context, Wan Zhe also says: "The Chinese economy has moved to a high-quality development stage and is currently in a critical period of transforming its model. At a crucial juncture, BSE can take the Nasdaq stock market as a benchmark to step up support on the technology side."

In April, China's State Council released new guidance on strengthening regulations, preventing risks and promoting the capital market, which will support its long-term development.