SSE's Sci-Tech Innovation Bonds Amounted to Nearly One Trillion Yuan, with the New Artery of the Capital Market Stimulating Sci-Tech Innovation Vitality

Yang Yiren, Xinhua Finance

Since late February, multiple entities including China National Building Material Company Limited have issued sci-tech innovation bonds on the SSE, raising more than 30 billion yuan. In the past year, the issuance amount of SSE's sci-tech innovation bonds exceeded 500 billion yuan, with a total issuance amount of nearly one trillion yuan.

SSE has formulated a plan to clarify the focus of the "five key areas" of serving finance. In terms of sci-tech innovation finance, it is necessary to improve the product service system that supports the entire life cycle of technology companies. In 2022, SSE launched sci-tech innovation bonds to help enterprises break through funding bottlenecks and accelerate the transformation and application of scientific and technological achievements.

At the institutional level, the China Securities Regulatory Commission and SSE have introduced a series of policies. For example, in June 2024, the China Securities Regulatory Commission established a "green channel" for equity and debt financing and the M&A of "core technology" enterprises. In December, SSE revised its rules to broaden the scope of sci-tech innovation investment and incubation entities and improve evaluation indicators. At present, high-quality enterprises have an "immediate review" channel for issuing sci-tech innovation bonds, and the review duration generally does not exceed 15 working days. For instance, China Railway Signal & Communication Corporation Limited has successfully issued sci-tech innovation bonds to optimize its debt structure.

Central SOEs serve as the main force of sci-tech innovation bonds. In 2024, SSE supported 424 enterprises to issue sci-tech innovation bonds of 510.5 billion yuan, with central SOEs accounting for 45% of the issuance volume. China Academy of Machinery Science and Technology Group Co., Ltd., China South Industries Assets Management Co., Ltd., and others have issued sci-tech innovation bonds to support the development of key areas as well as small and medium-sized sci-tech innovation enterprises.

Private enterprises also leverage sci-tech innovation bonds. In 2024, Shanghai United Imaging Healthcare Co., Ltd., TBEA Co., Ltd., and Xiaomi Communications Co., Ltd. successfully issued sci-tech innovation bonds on the SSE to invest in R&D. The issuance scale of private enterprises on the SSE has increased by 51% year on year, and more "specialized and innovative" private enterprises are expected to benefit.

Sci-tech innovation bonds connect sci-tech innovation enterprises and capital. The development of sci-tech innovation enterprises requires increasing capital, but investors often avoid risks. SSE promotes investment and financing coordination, such as Hongshi Holding Group's special roadshow and the USTC Silicon Valley event, to build an interactive platform and foster mutual trust between investors and financiers. At the same time, it improves the market-making mechanism and lowers the threshold. As of the end of February 2025, there were 143 benchmark market-making sci-tech innovation bonds with a scale of 341.6 billion yuan, accounting for 58.45% of the total scale of all benchmark market-making credit bonds and effectively driving valuation optimization.

SSE stated that it will promote the experience of central SOEs, improve bond financing mechanisms, strengthen investment and financing coordination and services, and support more high-quality enterprises to raise funds with sci-tech innovation bonds to play a positive role in serving national strategies.

The above information is provided for reference purposes only and does not constitute investment advice.