Yicai | 5th Anniversary of the STAR Market: Ten Highlights to Understand Its Achievements
Translated from Yicai
The STAR Market has undergone five years of development since its establishment. As a platform tasked with the mission of being a "pilot zone" for reform and driving economic innovation and transformation, how effective has the STAR Market been?According to industry insiders, after five years of effort, the STAR Market has become a critical force in leading the modern industrial system and accelerating the building of China into a strong country featuring science and technology. It has achieved significant results in supporting and facilitating sci-tech innovation, nurturing and strengthening new productivity, and promoting high-quality development.
To gain a more concrete understanding of the effectiveness of the STAR Market over the past five years, Yicai interviewed executives from multiple listed companies. They focused on ten key highlights, including a diverse and inclusive institutional framework, the industrial agglomeration effects, independent controllability in key areas, stabilizing, strengthening, reinforcing and supplementing industrial chains, accelerating the transformation of innovation results, promoting the transformation and upgrading of the real economy, and the circular ecology of "technology-industry-capital". Through these interviews, they attempted to conduct in-depth analyses and validate the achievements.
As of October 31, 2023, there were 562 listed companies on the STAR Market, with a total market value exceeding RMB 6 trillion yuan. So far, 60% of the core products or technologies of STAR Market companies are promoting import substitution in related fields. Additionally, 30% of the products or ongoing projects of STAR Market companies have achieved originality within their industries. Furthermore, over 300 listed companies have been included in the list of national SRDI "little giant" enterprises.
Highlight 1: Facilitating the development of strategic emerging industries through a diverse and inclusive institutional framework
Strategic emerging industries represent the direction of a new round of sci-tech revolution and industrial transformation, playing a crucial role in enhancing the construction of a modern industrial system.
Since its establishment, the STAR Market has been committed to staying at the forefront of global technology, serving as the primary battleground for the economy, addressing major national needs, and promoting the people's lives and health. The board specifically prioritizes the support of six strategic emerging industries: new-generation information technology, high-end equipment manufacturing, biomedicine, new energy, new materials, and energy conservation and environmental protection. To accommodate the diverse needs of innovative enterprises at various stages of development, five sets of differentiated listing indicators have been established to meet their financing requirements for going public.
"In the early stages, numerous domestic strategic emerging industries may encounter such difficulties as technology, information, talent, and performance losses. Taking into account various factors, including expected market value, revenue, net profit, R&D investment, and cash flow, the STAR Market enables eligible non-profitable enterprises, red-chip enterprises, and companies with special shareholding structures to become publicly traded. This offers numerous sci-tech innovation enterprises with high technology, high-market potential, and strong leading ability the opportunity to go public, thereby contributing to the leading role of sci-tech innovation," said Jin Liang, Deputy General Manager and Board Secretary of Zhongfu Shenying Carbon Fiber Co., Ltd., to Yicai.
By the end of October, the STAR Market had facilitated the listing of 562 companies, with 80% of these belonging to industries such as new generation of information technology, high-end equipment manufacturing, and biomedicine. This has directed capital to converge on strategic emerging industries.
Benefiting from the diverse and inclusive listing requirements of the STAR Market, 52 non-profitable companies, 8 companies with special shareholding structures, 6 red-chip companies and other special types of companies have successfully listed on the domestic market.
"The presence of the STAR Market and introduction of relevant listing standards have attracted significant domestic and foreign investments into non-profitable enterprises," analyzed Jin Liang.
Highlight 2: Continuously expanding the market demonstration effect and industrial agglomeration effect
The STAR Market has effectively leveraged the demonstration and agglomeration effects of various sectors, with a specific focus on key industries like integrated circuits, biomedicine, and new energy. This approach has facilitated a shift in the development trend from isolated breakthroughs to systematic improvements in sci-tech innovation. Moreover, it has fostered the construction of matrix-style industrial clusters, led by industry leaders and coordinated by upstream and downstream enterprises.
By the end of October, the integrated circuit sector had witnessed the listing of a total of 107 companies, representing 60% of similar A-share listed companies. These companies have successfully attracted the top three companies in Mainland China, as well as the fifth, sixth, and tenth-ranked global leaders in wafer foundry, namely Semiconductor Manufacturing International Corporation, Huahong Group, and Nexchip Semiconductor Corporation. Moreover, this sector also comprises prominent companies like National Silicon Industry Group Co., Ltd. in large-sized wafers, Advanced Micro-Fabrication Equipment Inc. China in etching equipment, Verisilicon Microelectronics (Shanghai) Co., Ltd. in semiconductor IP, and Montage Technology Co., Ltd. in memory interface chips. Covering the entire value chain, these companies encompass design, manufacturing, packaging & testing, equipment, materials, and IP, among others.
"Under the support of the STAR Market, the domestic semiconductor market has been expanding and the industrial chain ecosystem has been continuously improving. It has become an important platform for Chinese semiconductor companies to enhance their technological strength and showcase their product capabilities," said Li Wei, Executive Vice President and Board Secretary of National Silicon Industry Group Co., Ltd. Benefiting from the STAR Market, the company has increased its investment in R&D and deepened its business and technical cooperation with companies in the semiconductor industry chain.
In the biomedicine field, there are a total of 111 listed companies actively involved in areas such as cancer treatment, AIDS, hepatitis B, hepatitis C, etc. Alongside the United States and Hong Kong, the STAR Market has become one of the major listing platforms globally. Additionally, new energy fields such as photovoltaics and power batteries, new materials fields such as carbon fiber and superconducting materials, and high-end equipment fields such as industrial robots and rail transit equipment, have also shown initial growth.
Jinko Solar Co., Ltd., for instance, is involved in key links of the industrial chain, including silicon wafers, solar cells, and modules. According to Jiang Rui, the company's Board Secretary, the sci-tech innovation and operating management efforts of listed companies in various segments have played a crucial role in the advancement of China's photovoltaic industry. As a result, breakthroughs in technology and mass production of large-sized silicon wafers and N-type high-efficiency solar cell modules have been achieved, positioning China as a global leader in terms of efficiency and cost. Additionally, significant progress has been made in equipment localization, and the localization of high-quality auxiliary materials like POE film and high-purity quartz sand has gradually alleviated the overseas supply shortage.
Zhao Hui, Chairman of China Railway Construction Heavy Industry Corporation Limited, also informed Yicai that the company is in an industrial chain with a large number of companies, with diverse connections. In the upstream section of the industrial chain, the production involves tens of thousands of components, encompassing basic scientific research, development of new materials, manufacturers of large-scale machine tools, and suppliers of components. The technological advancements in equipment also stimulate the progress of upstream technologies. In the downstream section of the industrial chain, the company consistently meets new market demands through product upgrades and iterations. The technological advancements of equipment drive the technological progress of construction and enhance and upgrade the downstream construction market through supply-side improvements.
Highlight 3: Accelerating the attainment of independent controllability in key areas
Among the 56 national key R&D programs organized by the Ministry of Science and Technology during the 14th Five-Year Plan period, 36 STAR Market companies participated in 22 of them, accounting for 40% of the total. These programs covered various key areas, such as basic scientific research, key instruments, and cutting-edge materials. Additionally, 70 STAR Market companies led or participated in a total of 119 programs that have received major awards, such as the National Science and Technology Award. On average, each company owned 168 invention patents.
STAR Market companies have also played a crucial role in providing technical support for a series of major national-level technological breakthroughs in aerospace, lunar and Mars exploration, satellite navigation, and quantum information, among other fields. For instance, Western Superconducting Technologies Co., Ltd.'s development of high- and medium-strength damage tolerant titanium alloy products has become a fundamental material for multiple new aviation models in China. Zhongfu Shenying Carbon Fiber Co., Ltd. has accelerated its presence in the aerospace sector. Its T800-grade carbon fiber has received pre-approval PCD from the Commercial Aircraft Corporation of China, and the verification of the application of prepreg materials has been progressing smoothly.
Jin Liang stated that the STAR Market has provided Zhongfu Shenying Carbon Fiber Co., Ltd. with favorable conditions to further enhance sci-tech innovation and achieve breakthroughs in key core technologies. On the one hand, it has enabled the company to capitalize on the historical development opportunities in the carbon fiber and composite materials industry while effectively conducting project construction. On the other hand, it has facilitated increased investment in R&D, allowing for continuous development of new technologies and products, and significant advancements in higher strength and higher modulus carbon fiber. Notably, the company's successful R&D of the SYT45S-48K product has effectively filled the gap in global carbon fiber production, specifically in the production of large tow through dry spraying and wet spinning.
Currently, 60% of the core products or technologies of companies listed on the STAR Market are contributing to achieving import substitution in their respective fields. For instance, in the high-end equipment manufacturing sector, Zhao Hui emphasized that their company has been dedicated to addressing the country's needs, industry trends, and supply chain challenges. They have successfully overcome crucial technical obstacles in areas such as super-large diameter heavy-duty main bearings, control systems, main drive seals, reducers, hydraulic pumps and motors, frequency converters, and rock drills.
Kede Numerical Control Co., Ltd., a leading manufacturer of five-axis CNC machine tools, has successfully realized independent control and large-scale production of core technologies and products for five-axis linkage. At present, the company has achieved a self-sufficiency rate of 85% for machine tools, with a localization rate reaching 95%. Chen Hu, General Manager of Kede Numerical Control Co., Ltd., stated that in terms of the perspective of the company's product pedigree and application, the company has the capability to conduct R&D and manufacturing of various products in their high-end equipment manufacturing technology, including those in the aerospace industry. The core technology is independently controllable, and the company has a strong capability to substitute imports.
Highlight 4: Helping stabilize, strengthen, reinforce, and supplement industrial chains
The leading enterprises in the industrial chain hold a core advantage position in the industrial chain and supply chain, and have a great impact on the resource allocation, sci-tech innovation, and the construction of the industrial ecosystem.
These companies, represented by the constituent stocks of the STAR 50 Index, accounted for 47% of the sector's overall operating revenue and 63% of the net profit attributable to the parent company in the first three quarters of 2023. Taking the field of integrated circuits as an example, Semiconductor Manufacturing International Corporation, the world's fifth-largest wafer foundry and a leading company in Chinese Mainland, occupies a central position in the industrial chain.
"As a leading company in the chain, Semiconductor Manufacturing International Corporation continuously promotes the localization verification of upstream semiconductor equipment and materials in terms of technology and business, as well as the introduction of new products researched and developed by downstream chip design enterprises. Through its subsidiary equity investment institution, China Fortune-Tech Capital Co., Ltd., it also drives the flow of social capital into the supply chain partners, creating a collaborative innovation and integrated development industrial landscape. This effectively accelerates the process of independent controllability of China's integrated circuit industry," said a semiconductor industry expert.
Li Wei, taking into account the situation of National Silicon Industry Group Co., Ltd., explained that the company has opened up the joint R&D and product certification links in the large-sized silicon wafer industrial chain. This includes establishing and participating in "industry-university-research" and "innovation center" platforms. The company has also taken part in the research and production of crucial upstream process materials and components, leading to the development of a robust silicon material ecosystem. These efforts have significantly widened and deepened the company's development.
In parallel, the STAR Market is actively fostering the growth of SRDI "little giant" enterprises and establishing industry "single-item champions" to address the "breakpoints" and eliminate the "bottlenecks" in the industrial chain. This strategy aims to strengthen the resilience and security of the industrial and supply chains.
Currently, a total of 303 listed companies on the STAR Market have been included in the list of national SRDI "little giant" enterprises. Among them, 35 companies have been recognized as demonstration enterprises for manufacturing industry "single-item champions", while 40 companies' main products have been awarded the title of manufacturing industry "single-item champions" products. After removing duplicates, these companies account for approximately 60% of the total number of companies on the STAR Market.
Highlight 5: Fostering future industries through forward-looking planning
The Outline of the 14th Five-Year Plan proposes seizing the opportunity of future industrial development and cultivating pioneering and pillar industries. The new round of scientific and technological revolution and industrial transformation is at a historic threshold, aiming to achieve significant breakthroughs. Future industries based on cutting-edge technologies face both great opportunities and challenges.
According to Yicai, 30% of the products or ongoing projects of STAR Market companies have originality within their industries, based on scientific and technological frontiers. For instance, Shanghai Electric Wind Power Group Co., Ltd.'s "EW11.0-208 Wind Turbine" has set a new record for single-machine capacity of wind turbines connected to the grid worldwide. Shanghai United Imaging Healthcare Co., Ltd.'s "uMR Jupiter5T", a whole-body magnetic resonance imaging system, is the first of its kind in the industry, overcoming the core technical challenges of ultra-high-field magnetic resonance core components and achieving ultra-high-field whole-body clinical imaging.
Simultaneously, STAR Market companies are pursuing the layout of future industries such as genetic technology, synthetic biology, and artificial intelligence. Cathay Biotech Inc., for example, has broken major industrialization technology bottlenecks through high-throughput R&D facilities and established research and production facilities for the entire synthetic biology industry chain. Cloudwalk Technology Co., Ltd. possesses independently controllable core technologies in artificial intelligence, covering the fields of image recognition, speech recognition, natural language processing, and machine learning.
"With the capital support of the STAR Market, entrepreneurs and their teams are required to focus on continuous investment and accumulation in basic technology and industrial transformation," said Zang Huiqing, Board Secretary of Cathay Biotech Inc. After going public, the company has experienced smoother business connection with the upstream and downstream industrial chain. Moreover, Cathay Biotech Inc.'s listing on the STAR Market has also provided a window for the capital market to understand synthetic biology and bio-manufacturing. As a result, an increasing number of companies in this field have gained attention and support from the capital market.
Highlight 6: Enhancing global industrial and supply chain layout
To capitalize on the new opportunities arising from the global industrial restructuring and realignment, companies listed on the STAR Market are actively integrating into the global market to strengthen their global industrial and supply chain layout.
For instance, Montage Technology Co., Ltd. has taken the lead in establishing the international standard for DDR5 and is currently one of the two global suppliers capable of providing a comprehensive range of memory interface and module supporting chip solutions. Meanwhile, Jinko Solar Co., Ltd. has established itself as an industry leader in terms of N-type TOPCon efficiency, cost, production capacity, and shipment scale.
"After landing on the STAR Market in early 2022, our N-type products have made significant strides in international markets, becoming a prominent representation of China's photovoltaic industry's global expansion. In 2023, the proportion of N-type products in our shipments to major overseas markets such as Europe and Latin America exceeded 80%, positioning us as the leading supplier in global component shipments during the first three quarters of this year," stated Jiang Rui.
Jiang Rui added that Jinko Solar Co., Ltd. is consistently expanding its overseas production capacity and strategically establishing supply chains in countries participating in the Belt and Road Initiative, such as Vietnam and Malaysia, as well as high-premium markets like the United States. By the end of the year, the company anticipates having the largest integrated overseas production capacity globally, surpassing 12GW and encompassing silicon wafers, solar cells, and modules. Additionally, their N-type advanced capacity is projected to exceed 75%.
Simultaneously, companies listed on the STAR Market are continuously improving their global allocation capabilities in capital, technology, talent, and other factors. Currently, three companies - Zhejiang HangKe Technology Incorporated Company, Zhejiang Supcon Technology Co., Ltd., and Kunshan Dongwei Technology Co., Ltd. - have successfully issued GDRs, raising a total of 843 million US dollars. Many biopharmaceutical companies, such as Chison Medical Technologies Co., Ltd. and Shanghai Haohai Biological Technology Co., Ltd, have established overseas R&D centers in countries like Singapore, the United States, and France, to form international R&D teams.
Li Wei believes that the STAR Market does offer some assistance to companies in their international expansion. Firstly, the institutional design of the STAR Market draws from the experience of mature international markets, enabling Chinese sci-tech innovation companies to better adapt to the rules and environment of the global market. Secondly, companies listed on the STAR Market can secure more funds through the capital market, which aids in their overseas expansion and investment.
Highlight 7: Speeding up the further integration of industry, university, and research
The STAR Market has played its due role in promoting the effective integration of industry, university, and research, as well as facilitating the efficient application and transformation of science and technology. This has led to the convergence of the innovation chain, industrial chain, funding chain, and talent chain.
According to data, more than 60% of companies listed on the STAR Market have founding teams consisting of talents such as scientists, engineers, and industry experts. Additionally, nearly 30% of companies have controlling shareholders who also serve as core technical personnel, with almost 30% of these shareholders holding doctoral degrees.
Meanwhile, companies listed on the STAR Market are actively utilizing resources to support basic research and promote the deep integration of industry, university, and research. Almost 40% of listed companies on the board have established cooperative relationships with universities and scientific research institutes. Through the joint establishment of R&D centers and postdoctoral workstations, these measures facilitate technology exchange, R&D collaboration, and talent interaction, thereby strengthening basic research, applied research, and achievement transformation.
Zang Huiqing, drawing on practical experience, emphasized that in the process from zero to one, although the final presentation on the market is one or a group of new products, it is important to invest in basic research. While new products are eventually introduced to the market, it is crucial to comprehend the underlying principles and conduct basic research and development to achieve true innovation. Furthermore, this industrial research process helps identify targeted problems, providing better guidance for basic research and development.
To cater to the needs of sci-tech innovation companies, the STAR Market has introduced the Class II restricted stocks. This measure has significantly increased the flexibility of the stock incentive system, serving as a vital tool for listed companies to attract, retain, and motivate talented individuals. As of the end of October, 361 companies listed on the STAR Market have released 523 equity incentive plans, with a market coverage of 64% and benefiting a total of 95,000 individuals, including directors, executives, core technical personnel, and core business personnel.
Highlight 8: Continuously increasing R&D investment to accelerate the achievement transformation of sci-tech innovations
STAR Market companies have consistently increased their investment in innovation since listing. In 2022, the scale of R&D investment in these companies exceeded RMB 100 billion yuan, representing a year-on-year increase of 28%. In the first three quarters of 2023, the amount of R&D investment reached RMB 95.9 billion yuan, showing a year-on-year increase of 24%. The median proportion of R&D investment to operating revenue was 13%, which is significantly higher than other boards.
Chen Hu emphasized that the STAR Market provides capital market financing channels for listed companies, and its capital empowerment characteristics contribute to the increased investment in R&D by these companies. This, in turn, helps them accelerate technological R&D and product promotion, enhancing their ability to achieve independent control in key areas and boost innovation.
"In the future, Kede Numerical Control Co., Ltd. will continue to maintain a high proportion of R&D investment to ensure the company's technological advantages in the field of five-axis CNC system technology and related five-axis CNC machine tool technology. At the same time, we will expedite the transformation of achievements and support the rapid growth of the manufacturing industry," Chen Hu told Yicai.
Meanwhile, the STAR Market has attracted a pool of scientific research talents, with over 200,000 R&D personnel, making up an average of more than 30% of the total workforce.
Thanks to the consistently high investment in R&D from these listed companies, the overall performance of the STAR Market has also seen steady growth. In 2022, the STAR Market's listed companies generated operating revenue surpassing RMB 1 trillion yuan, with net profit exceeding RMB 100 billion yuan. In comparison to the base year of 2019, the compound growth rates of operating revenue and net profit attributable to the parent company of listed companies on the board over the past three years have reached 30% and 59%, respectively, ranking first among all sectors of A shares. Furthermore, over 30% of the companies have achieved positive net profit growth for three consecutive years, and more than 100 companies have recorded a compound growth rate of net profit attributable to the parent company exceeding 50%.
Highlight 9: Promoting the transformation and upgrading of the real economy
The STAR Market has facilitated the listing of 54 central and state-owned enterprises (SOEs), with a total financing amount surpassing RMB 153.9 billion yuan. Among these enterprises, seven have been listed through spin-offs. Nine central SOE groups, including China Aerospace Technology Group Co., Ltd. and China South Industries Group Co., Ltd., have achieved listings on the STAR Market. It is worth noting that China Railway Construction Corporation Limited has accomplished the successful spin-off of its subsidiary, China Railway Construction Heavy Industry Corporation Limited, establishing itself as the pioneer for central SOEs' A-share spin-off listings on the STAR Market.
Furthermore, ten manufacturing SOEs, including Zhuzhou CRRC Times Electric Co., Ltd. and China Railway Construction Heavy Industry Corporation Limited, have been included on the "Dual Demonstration" enterprise list for building world-class demonstration enterprises and SRDI expertise, covering various manufacturing sub-sectors such as advanced rail transportation, new energy power equipment, and critical strategic materials.
Through capital operations, State-owned capital has also participated in strategic emerging industries on the STAR Market. For instance, China Merchants Group Limited planned to participate in the private placement of Cathay Biotech Inc., a leading company in synthetic biology, with an investment not exceeding RMB 6.6 billion yuan. Guangzhou State-owned Assets Management Group Co., Ltd. invested over RMB 5 billion yuan to acquire controlling rights in Farasis Energy (Gan Zhou) Co., Ltd., a prominent company in ternary soft-pack power battery.
The STAR Market has emerged as a crucial platform for the capital market in supporting the growth and development of the real economy, particularly the private economy. Currently, over 90% of the companies listed on the STAR Market are non-public sector enterprises. In the first three quarters of this year, these companies accounted for 83% of the operating revenue, 80% of the net profit attributable to the parent company, and 87% of the R&D investment.
Private-sector listed companies have become the driving force behind industry development in sectors such as photovoltaics, biomedicine, and chip design. For instance, in the first half of 2023, Jinko Solar Co., Ltd., Trina Solar Co., Ltd., and CSI Solar Co., Ltd. ranked first, second, and fifth, respectively, in terms of photovoltaic module shipments.
"While the STAR Market offers multiple financing channels for companies, financing is just one aspect of their development. Companies must also focus on strengthening internal management and control systems, improving management ability and operational efficiency, reducing operational and financial risks, and enhancing core competitiveness to achieve high-quality development," said Chen Hu.
Highlight 10: Initially establishing a circular ecology of "technology-industry-capital" with sound valuation logic
After five years of development, the STAR Market is becoming a hinge facilitating the cycle among science and technology, capital and industry.
On the financing side, the STAR Market not only provides a financing platform for listed companies but also stimulates the creation of a primary market with the ethos of "early, small-scale and sci-tech investment", encouraging capital to converge in innovative sectors. Prior to their listing, 90% of the companies on the STAR Market received investments from venture capital institutions, with an average investment of about RMB 930 million yuan per company, demonstrating significant growth compared to before the launch of the STAR Market.
"The circularity of the 'technology-industry-capital' paradigm has been partially realized in the field of synthetic biology. In recent years, numerous startup synthetic biology companies have garnered favor from investors in the capital market. However, the enhancement and orderly progression of this cycle may still require some time. A crucial aspect is the transition from technology to industry, which necessitates not only capital assistance but also the R&D accumulation, industrialization, and product market validation by entrepreneurial teams, followed by reevaluation and entry into the capital market. This is also an indispensable process for the development of new industries," explained Zang Huiqing.
On the investment side, the STAR Market's "institutional market" has initially formed and has established itself as the most institutionalized and indexed board in the country from an investment perspective, with long-term funds hastening their investments. By the end of the third quarter of 2023, the number of active accounts held by professional institutional investors in STAR Market companies had exceeded 60,000, representing approximately 40% of total holdings, with trading volume accounting for nearly half.
Furthermore, the STAR Market has developed an index system that covers broad-based index and industry-themed index, and it continually enriches its range of index products. The STAR 50 Index, which was introduced less than three years ago, has amassed a domestic product scale of over RMB 140 billion yuan, making it the second-largest broad-based index ETF in the A-share market. In August 2023, the STAR 100 Index, which focuses on mid-cap companies listed on the STAR Market, was launched. Following the listing of the first four STAR 100 ETFs, their scale has continued to grow. To date, the funds' scale has exceeded RMB 9 billion yuan, marking an increase of approximately 29% compared to the initial scale.
"In recent years, there has been significant progress in the development of the investment side of the capital market. Foreign capital investment has become more convenient, and the strength of domestic professional institutional investment has grown rapidly. The implementation of the collective litigation system has been normalized, and the market ecology continues to be optimized. As a result, the development of the investment side has accelerated, and it now has favorable conditions and a solid foundation." stated Jin Liang.
Chen Hu believes that with the accelerated development of market-oriented investment and financing, it is crucial to further regulate market behavior, enhance the quality of information disclosure, strengthen diversified communication mechanisms with investors, and optimize the investment and financing process. These measures will contribute to the healthier, more efficient, and faster development of the investment and financing market in China.
Recently, the STAR Market index is around historically low levels. According to industry insiders, it is worth diving deep into the valuation logic of the STAR Market, which is the first to implement market-based pricing under the IPO registration system. On the one hand, the current improvement in domestic macroeconomic situation and the stabilization and recovery of certain sci-tech industries suggest that the valuation of A-share technology innovation companies, represented by the STAR Market, is accumulating strong inherent repair capabilities. On the other hand, facing profound changes unseen in a century, the valuation of Chinese sci-tech innovation companies should incorporate a more comprehensive era connotation. This includes recognizing the long-term accumulation required for sci-tech innovation and the general trend of transitioning from quantity to quality. It also entails acknowledging the enabling role of sci-tech innovation in generating new qualitative productive forces, driving the development of the entire industry chain cluster, and leading the progress of the whole society. Additionally, it is important to recognize the various paths for future cutting-edge technology transformation and the ample room for improving business strength. Furthermore, the strategic and fundamental role of companies with key and core technologies that can overcome bottleneck technologies and achieve import substitution in enabling the country to seize the initiative in future development and truly achieve sci-tech self-reliance and self-strengthening should be acknowledged.