SSE Issues Public Initiative for the "Corporate Value and Return Enhancement" 2.0 Special Action to SSE-Listed Companies

On June 23, the Shanghai Stock Exchange (SSE) issued a public initiative for the "Corporate Value and Return Enhancement" 2.0 special action to all SSE-listed companies, marking a new phase of the initiative. The initiative aims to thoroughly implement the guiding principles of the 20th National Congress of the Communist Party of China and the Central Financial Work Conference; continue to fulfill the relevant requirements of the State Council's Opinions on Further Improving the Quality of Listed Companies and the Guidelines on Strengthening Regulation, Forestalling Risks, and Promoting High-Quality Development of the Capital Market; consolidate and deepen the achievements of the "Corporate Value and Return Enhancement" special action plan; encourage listed companies to proactively embrace the new round of technological revolution and industrial transformation; vigorously cultivate a group of high-quality listed companies; effectively enhance investors' sense of gain; and better serve the development of new quality productive forces and high-quality economic growth.

The development quality of listed companies has a direct bearing on the sound operation of the capital market and the vital interests of investors. Since 2024, SSE-listed companies have actively responded to the "Corporate Value and Return Enhancement" special action initiative, with a cumulative participation rate approaching 80 percent. With the exception of newly listed companies, full coverage has been achieved among constituents of the SSE 50, SSE 180, and STAR 50 indices. Companies that joined the initiative formulated and disclosed their special action plans, and delivered phased results in improving business quality, increasing investor returns, and strengthening investor communication. At the same time, it should be noted that for some companies, there remains a gap between their action plans and both investor expectations and the requirements for high-quality development. Drawing on the practical experience gained in the previous phase, the "Corporate Value and Return Enhancement" 2.0 special action initiative guides companies to set quantitative targets, refine measures, and strengthen execution in areas such as business development, corporate governance, and investor returns, thereby steadily enhancing the quality and investment value of listed companies.

The initiative focuses on enhancing the quality and efficiency of listed companies in five areas: First, improving the quality and efficiency of business operations and development. The initiative guides companies to set clear targets for business quality improvement, such as financial and non-financial indicators that reflect profitability or operation quality — including return on equity (ROE), gross margin, production and sales volume, and R&D achievements — or other self-selected indicators the company considers more reflective of its own characteristics, and to propose targeted measures for improvement. At the same time, it encourages companies to actively use capital market tools such as mergers and acquisitions, restructuring, and refinancing to address issues like horizontal competition. Second, improving the quality and efficiency of corporate governance. Targeting common compliance issues, the initiative guides companies to continuously refine internal governance mechanisms that ensure all parties assume their respective responsibilities and maintain effective checks and balances; to strengthen the compliance awareness and training of "key minority" persons including controlling shareholders, actual controllers, directors, and senior management; and to keep improving the scientific and prudent nature of decision-making, thereby effectively raising corporate governance standards and standardized operation capabilities. Third, improving the quality and efficiency of information disclosure. The initiative guides companies to standardize information release mechanisms for non-statutory disclosure channels, guard against active or passive involvement in hyping hot concepts, and establish an internal accountability mechanism for information disclosure errors. Companies are also encouraged to diversify the forms of information disclosure and continuously enhance the readability and usefulness of disclosure documents. Fourth, improving the quality and efficiency of investor returns. The initiative guides companies to reasonably increase dividend payout ratios and cash dividend frequency on the basis of acting within their means; encourages active implementation of share repurchases and cancellations as well as shareholding increases by major shareholders; and calls for diversifying investor communication channels such as results briefings and "walk into listed companies" events. Fifth, improving the quality and efficiency of social responsibility. Companies are encouraged to further enhance their willingness of ESG report disclosure and improve the disclosure quality, identify and analyze ESG-related topics in accordance with regulations, and objectively and truthfully reflect their practices and performance in environmental, social, and governance areas.

To help companies better formulate their new round of special action plans, the SSE, while releasing this initiative, also issued an relevant supporting demonstration text. The demonstration text adds explicit indicators under the categories of business operations, investor returns, and compliance, and spells out the key elements of the special action alongside detailed indicators such as ROE, gross margin, and horizontal competition. This provides clear guidance for listed companies to tailor their plans to their own circumstances, while also making it easier for investors to access and understand the companies' current operating status and future priorities.

The SSE encourages all SSE-listed companies to participate in the 2.0 version of the special action, and recommends that relevant index constituent companies, as well as those that have maintained an "A" rating for information disclosure for multiple consecutive years, take the lead in setting an example. The initiative specifies concrete requirements regarding the decision-making procedures, information disclosure, and evaluation and refinement of the special action plans, so as to foster an open and transparent market-based discipline. At the same time, the initiative actively promotes the development of a market ecosystem for investing in high-quality listed companies, and encourages investors to practice value investing and long-term investment philosophies, paying greater attention to listed companies that are compliance-oriented, quality-driven, responsible, and return-focused.

Going forward, the SSE will follow the decisions and deployments of the China Securities Regulatory Commission (CSRC), earnestly implement the relevant work requirements, further promote SSE-listed companies' continuous enhancement of business quality and investment value, effectively strengthen investors' sense of gain, consolidate the foundation for the stable operation of the capital market, and work with all market participants to promote the high-quality development of the capital market.