On May 8, the CSI-CCB Yangtze River Delta Sci-Tech Innovation Leading Index (the “Index”) was officially launched. The Index is jointly established by the Shanghai Stock Exchange (SSE), China Securities Index Co., Ltd. (CSI), and China Construction Bank (CCB). It is based on the CCB Sci-Tech Innovation Evaluation Index System, and consists of 50 sample securities of representative listed companies with strong sci-tech innovation capacity and growth potential in the Yangtze River Delta region, so as to reflect the overall performance of the securities from the listed companies with all these features in this region.

Supporting sci-tech innovation is an important task of financial and capital markets. The Central Financial Work Conference points out that it is important to put great efforts into the “Five Priorities” of technology finance, green finance, inclusive finance, pension finance, and digital finance, with technology finance in the first place. In the recently issued Opinions of the State Council on Strengthening Supervision to Prevent Risks and Promote High-quality Development of the Capital Market, it is clearly pointed out that “it is important to better serve the implementation of national strategies such as sci-tech innovation, green development, and reform of state-owned assets and enterprises.” In order to fully implement the requirements of the Central Financial Work Conference and the new “Nine Preferential Policies”, China Securities Regulatory Commission (CSRC) has developed and issued the Sixteen Measures for Capital Market to Serve High-Quality Development of High-tech Enterprises to further promote the virtuous circle of “technology-industry-finance”.

The CSI-CCB Yangtze River Delta Sci-Tech Innovation Leading Index is an important move to promote high-quality development of the capital market and commercial banks. It is aimed to channel social funds into quality high-tech listed companies through index investment, facilitate the financing of the sci-tech listed companies, promote self-reliance and strength in science and technology, accelerate the integration of technology and innovation, and promote new quality productive forces in the Yangtze River Delta.

The Index incorporates both financial and non-financial information of enterprises, and selects samples based on multiple factors, including market value, fundamentals, and the CCB Sci-tech Innovation Scoring Factors. It is a prime example of the fruitful collaboration between the capital market and commercial banks in advancing technology finance.

The most recent samples indicate that mechanical equipment, medicine, and electronics represent the top three sectors in terms of weight, collectively accounting for nearly 50% of the total weight. This reflects a clear focus on technology innovation. According to the latest annual reports, the proportion of R&D investment in sample enterprises is about 6.11%, a figure that is considerably higher than the 2.61% observed in the A-share market. Over the past three years, the operating revenue of the sample enterprises grew by 10.46%, 30.90%, and 7.15%, respectively, significantly higher than the 7.58%, 20.16%, and 4.05% growth in the A-share market over the same period. Overall, the Index enjoys high revenue elasticity thanks to the strong sci-tech innovation capacity of enterprises.

As key contributors to technology finance, the capital market and commercial banks are interdependent and mutually influenced sectors that support and strengthen each other and jointly serve the development of new quality productive forces. In recent years, SSE has been working with CSI to enrich and improve the sci-tech innovation index system and actively promote self-reliance and strength in science and technology through index investment. Upon their release, the STAR Market Index and Strategic Emerging Industries Index have attracted great attention from the market. Currently, there are 15 STAR Market indexes, and products tracking these indices reached a scale of over RMB150 billion. CCB actively promotes FinTech and financial innovation. The CCB Sci-tech Innovation Evaluation System provides quantitative evaluation of enterprises based on their intellectual property rights besides the financial statements, and classifies them into different levels of sci-tech innovation capability through comprehensive scoring and rating.

According to market participants, the concept of index investment has been gradually accepted by investors in recent years. Domestic index products are growing fast to RMB3.4 trillion, the equity ETF in the Shanghai Stock Market has reached RMB1.6 trillion, and there are several star ETFs exceeding RMB100 billion. As sci-tech innovation indexes are constantly enriched and improved, they will be better able to serve the new industries, new business forms, and new technologies, and will contribute more to promoting the high-quality and efficient development of new quality productive forces, supporting the “Five Priorities”, and pursuing high-quality development.