SZSE Makes New Progress in Implementing High-standard Two-way Opening-up ChiNext Index Becomes an Important Target for Foreign Investors to Invest in China A-shares

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SHENZHEN, China, June 2, 2022 /PRNewswire/ — The SZSE ChiNext Daily (2x) Leveraged Product recently went public on the HKEX. It is the first 2X EFT listed outside the Chinese mainland that tracks the innovation-oriented enterprises in China A-shares. The product tracks the Hong Kong dollar-denominated index of the ChiNext Index and realizes a return which two times the daily performance of the index through swap investment instruments. Since its listing, the product has been stable and its product units have increased by 83%. That shows foreign long-term capital and institutional investors give full recognition of the vitality and resilience of the Chinese economy and of the growth and innovation of ChiNext companies. It can help further enhance the attraction of the A-share market to quality foreign funds, thus supporting the high-standard two-way opening-up and high-quality development of the capital market.

Since the steady implementation of the registration-based IPO reform of ChiNext , we have deepened services for innovation-oriented enterprises and startups with growth potential and highlighted "innovation" and "growth". The positioning of ChiNext has become clearer and the cohesion further enhanced. The ChiNext Index, which gathers leading innovation-oriented enterprises with enormous growth potential, has become an important target for foreign investors to invest in A-shares. From 2019 to 2021, the ChiNext Index rose by 166% cumulatively, and its return was the highest among main indexes worldwide, bringing excellent return to investors. Currently, the ChiNext Index has listed five products in Hong Kong, South Korea and the United States.

According to the 2021 annual report, the ChiNext Index constituent companies maintained high-growth momentum with outstanding profitability. Their average operating income increased by 25.0% year on year, net profit grew by 25.4% year on year, and return on equity recorded 12.6%. Since the beginning of the year, capital markets around the world have generally made downward adjustments. Currently the PE of ChiNext Index is about 39×, a relatively low level since its launch. Investors are bullish about the long-term development potential of the ChiNext board and are willing to invest, as ETFs that track the ChiNext Index record show relatively large amount of net purchase. At the end of April, the domestic ETF units increased by 95% compared to that at the beginning of the year, and net capital inflows exceeded CNY 16.6 billion.

After more than a decade’s operation and development, the ChiNext Index has gradually become a core index that reflects the transformation and upgrading of the Chinese economy and the development of innovation-oriented enterprises and startups, and its international influence has increased. Next, SZSE will continue to follow the overall plan of CSRC, base ourselves on the characteristics of the market, and stick to the positioning of ChiNext. We will develop more investment targets on the ChiNext market, improve the index product system of SZSE characteristics, expand indexing investment, and strive to build a quality asset allocation platform with more distinctive features unique to innovative markets.

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