Xinhua News｜Accelerating Innovation—Six Years of the STAR Market and Its Role in Advancing "Hard Tech"

On July 22, the STAR Market will celebrate its sixth anniversary. Over the past six years, this "testing ground" for capital market reform has yielded fruitful results. From domestic chip development to the global expansion of new energy, from breakthroughs in biomedicine to AI empowering countless industries, companies listed on the STAR Market have demonstrated a unique "Chinese speed" in technological innovation—with R&D investment consistently exceeding 10% of annual revenue on average.

STAR Market Companies Continue to Deliver Breakthroughs in "Hard Tech"

On July 3, two innovative drug developers listed on the STAR Market announced major breakthroughs:

Biokin Pharmaceutical successfully completed a Phase III clinical trial for its independently developed drug, izalontamab brengitecan (iza-bren), for the treatment of nasopharyngeal carcinoma; Dizal Pharma's new drug, ZEGFROVY® (sunvozertinib), officially received approval from the U.S. Food and Drug Administration (FDA) for marketing.

These two breakthroughs are not only a testament to the STAR Market's strength in "hard tech", but also a vivid reflection of its ongoing support for the development of new productive forces.

Since its launch on July 22, 2019, the STAR Market has continuously enhanced its ability to support and serve sci-tech enterprises, leading to a steady stream of innovation outcomes.

Stepping into the exhibition hall of Advanced Micro-Fabrication Equipment Inc. (AMEC) in Shanghai, rows of invention patent certificates highlight the company's robust R&D achievements as a representative STAR Market-listed firm.

"As of the end of March this year, the company has filed a total of 2,941 patent applications, more than 80% of which are invention patents," said Yin Zhiyuan, Chairman of AMEC. He noted that in recent years, the company has maintained intensive R&D investment, significantly shortening its product development cycles—now able to launch a new product in just two years or even less.

AMEC is far from an isolated case on the STAR Market. In 2024, STAR Market companies invested a total of RMB 168.1 billion in R&D—more than three times their combined net profit attributable to shareholders for the year. At the same time, the STAR Market employed around 240,000 R&D personnel, accounting for nearly 30% of its total workforce.

With continuous investment in innovation, the efficiency of translating scientific and technological achievements into practical applications has become increasingly evident:

Around 30% of STAR Market-listed companies offer products or R&D projects that are the first of their kind in their respective industries, while over 80% focus on import substitution and independent controllability for their core products;

35 companies rank first globally in niche sectors or for specific products, and 124 companies hold the top position nationwide;

Projects led or participated in by 81 companies have won a total of 138 national-level science and technology awards and other major honors;

More than 120,000 invention patents have been granted cumulatively, with each company holding an average of 216 invention patents;

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"The STAR Market provides sci-tech enterprises with a more open, inclusive, and efficient capital market environment," said Sha Chaoqun, General Manager of Hygon Information Technology. In addition to serving as a key financing platform, the STAR Market also supports companies in achieving long-term, high-quality development through policy innovation, market recognition, and industrial collaboration.

Today, a new cluster of emerging productive forces is steadily taking shape and expanding on the STAR Market.

According to a representative from Shanghai Stock Exchange, over 80% of the companies listed on the STAR Market operate in strategic emerging industries such as next-generation information technology, biomedicine, and high-end equipment manufacturing. At the same time, a number of listed companies are actively driving the advancement of cutting-edge technologies and industrial transformation, accelerating their deployment in future industries including artificial intelligence, genetic technologies, and quantum information.

A "Testing Ground" for Institutional Reform Empowering the Growth of Sci-Tech Enterprises

"Technological innovation is inherently unpredictable," noted a representative from Shanghai Stock Exchange. For Chinese sci-tech enterprises to transition from being followers to running alongside, and ultimately to becoming global leaders, they require greater inclusiveness and adaptability—fostering a policy environment that supports long-term capital commitment. Further deepening the reform of the STAR Market is essential to amplifying the effects of both the market itself and the broader registration-based IPO system.

By offering a diverse and flexible range of capital instruments, the STAR Market has continuously empowered sci-tech enterprises to grow stronger and more competitive. From its inception, the STAR Market has been tasked with serving as a "testing ground" for capital market reform.

In December 2021, BeiGene raised RMB 21.1 billion in a single offering—setting a record for the largest fundraising by a biopharmaceutical company since the launch of the STAR Market.

Thanks to the STAR Market's listing mechanism and inclusive policies, BeiGene and many other companies across the industrial chain have been able to raise capital efficiently, securing ample funding to accelerate R&D and expand production capacity. BeiGene's independently developed anti-cancer drug, zanubrutinib, has now been approved in 75 markets worldwide, serving as a vivid example of Chinese innovative drugs going global.

Through the STAR Market, numerous high-quality sci-tech enterprises have gained access to China's capital markets. To date, the 589 companies listed on the STAR Market have raised a combined total of over RMB 1.1 trillion through IPOs and follow-on financing. The STAR Market has firmly established itself as the "preferred destination" for "hard tech" companies seeking to go public and raise capital.

Talent is the key for sci-tech enterprises to sustain innovation and productivity.

As one of China's leading developers and manufacturers of testing equipment, HYC Technology employs R&D personnel who make up around 40% of its total workforce. According to Chen Wenyuan, Chairman of HYC Technology, high-end technical talent is a scarce resource in the sci-tech industry.

Since its listing in 2019, HYC Technology has implemented a restricted stock incentive plan to continuously enhance rewards for R&D personnel involved in the transformation of scientific achievements. "The STAR Market's equity incentive mechanisms have played an effective role in helping companies retain core talent and support long-term development," said Chairman Chen Wenyuan.

Over the past six years since its launch, the STAR Market has seen the rollout and evolution of a series of institutional innovations—from foundational systems such as issuance, listing, trading, delisting, follow-on offering, and mergers & acquisitions, to the creation of new mechanisms like the second type of restricted stock for equity incentives and the inquiry-based transfer system for shareholding reductions. These pioneering reforms have taken root and grown on the STAR Market, forming replicable and scalable models that offer valuable references for broader capital market reforms.

"The reform initiatives of the STAR Market have fully taken into account industry characteristics and enterprise needs, broadening financing channels and accelerating the integration of industrial chains," said Jiang Yu, Chairman of Huatai United Securities. "This has enabled capital to more efficiently empower technological advancement and support 'hard tech' companies in achieving continuous breakthroughs."

Enabling a Virtuous Cycle of "Technology–Industry–Capital"

In April this year, Dizal Pharma successfully completed a private placement, becoming the first unprofitable company on the STAR Market to complete follow-on offering under the "light asset, high R&D investment" eligibility criteria. The RMB 1.796 billion of proceeds will be used to accelerate the development of core products and advance the construction of its in-house R&D and manufacturing facilities.

The 14 investors in Dizal's private placement include a diverse range of institutions such as insurance asset managers, industrial funds, public mutual funds, qualified foreign institutional investors (QFIIs), and venture capital firms.

This serves as a vivid example of how the STAR Market is channeling diverse resources toward technological innovation, fostering a virtuous cycle of "technology–industry–capital". It promotes the integration of the innovation, industrial, capital, and talent chains.

"The resource allocation ecosystem shaped by the STAR Market helps ease the funding pressure of R&D for enterprises and encourages them to pursue original innovation and breakthroughs in core technologies," said Lyu Hongbin, Chief Financial Officer of Dizal Pharma.

As the main field where the capital market supports technological innovation, more than 60% of the founding teams of companies listed on the STAR Market consist of scientists, engineers, and other research professionals or industry experts. Nearly 30% of these companies' actual controllers also serve as core technical personnel, and over 70% have established postdoctoral workstations, jointly built laboratories, and other industry-university-research collaborative mechanisms.

From technology to industry, the STAR Market has mobilized capital from all sectors to build a solid foundation for scientific and technological innovation.

"For projects of sci-tech enterprises, investment used to focus mainly on financial statements, but now it must also pay close attention to the underlying technology," said Jin Jianhua, General Manager of China Securities. The establishment and development of the STAR Market have gradually shifted traditional investment thinking, making "small and exquisite" enterprises—especially those in key "bottleneck" sectors—a top priority for sci-tech investment.

Similar changes have also occurred on the investment side. Before going public, 90% of STAR Market companies received venture capital investments, with total primary market investments reaching approximately RMB 450 billion—an average of about RMB 930 million per company. The STAR Market has gradually fostered an investment culture characterized by "early-stage, small-scale, long-term, and hard-tech" focus.

"While continuously enhancing institutional inclusiveness and adaptability, the STAR Market also facilitates smoother exit mechanisms, enabling venture capital to patiently accompany enterprise growth," said Sun Jiatao, Executive President of Haiwang Capital at SPINNOTEC. For venture capital firms, the financial metric "market-to-R&D ratio" (which measures the relationship between R&D investment and market value) is becoming a more important investment indicator than revenue and profit.

STAR Market Reform Embarks on a New Phase

On June 30, the IPO applications of Moore Threads and MetaX—two leading domestic companies in the GPU sector—were both accepted for review on the STAR Market.

Their IPO filings have attracted widespread attention, not only because the booming domestic self-reliance trend and the surge in AI computing power create vast market opportunities for domestic GPUs, but also because they vividly illustrate the STAR Market's establishment of a Sci-Tech Growth Tier that firmly supports high-quality, unprofitable enterprises.

On July 1, Healthgen Biotech, a company meeting the fifth set of listing standards on the STAR Market, was reviewed and approved, becoming one of the first beneficiaries of the reintroduced fifth set of listing standards.

Previously, Wu Qing, Chairman of China Securities Regulatory Commission (CSRC), announced plans to further leverage the STAR Market's role as a reform model by introducing a new set of reform initiatives known as the "1+6" policy measures.

In this framework, the "1" refers to the establishment of the Sci-Tech Growth Tier within the STAR Market and the reinstatement of the fifth set of listing standards for unprofitable companies. The "6" represents 6 new reform measures launched on the STAR Market, including the expansion of the applicability of the fifth set of listing standards to support more frontier technology sectors such as artificial intelligence, commercial aerospace, and the low-altitude economy.

"The new round of reform on the STAR Market will drive the concentration of resources toward emerging industries, new business models, and cutting-edge technologies, better serving technological innovation and the development of new productive forces. It will help foster a generation of 'great enterprises' in China's capital market. At the same time, throughout the reform process, it is essential to focus on key areas such as maintaining a balance between investment and financing, combating fraud, and safeguarding the legitimate rights and interests of investors," said a representative from Shanghai Stock Exchange.

While the STAR Market has already made significant strides on its reform journey, these six years are just the beginning.

Can the STAR Market cultivate more world-leading sci-tech champions? How can it better protect investors' legitimate rights and interests while deepening institutional innovation? How can it build a more balanced investment and financing landscape? These are the pressing questions raised by various voices in the market—questions that continue to drive the healthy development of this young and dynamic board.

The "1+6" institutional framework of the STAR Market has already introduced several proactive measures in response. These include more targeted risk warning requirements for the Sci-Tech Growth Tier, enhanced information disclosure standards for unprofitable companies, and strengthened accountability for securities firms.

There is broad anticipation that the STAR Market will continue to enhance its inclusiveness, attract more social capital into "hard tech" enterprises, and evolve into a powerful engine driving China's scientific and technological innovation.

Text Reporters: Zhao Xiaohui, Liu Yujia, Pan Qing

Poster Design: Xu Jing

Editorial Coordination: Liu Yangyang, Li An, Feng Xiaoqing