Dongxing Securities Co.,Ltd.(SH:601198) Dongxing Securities·2025-06-20 09:01Investment Rating - The industry investment rating is "Positive" as it is expected to outperform the market benchmark index by more than 5% in the next 6 months [16]. Core Insights - The establishment of the Sci-Tech Innovation Board (STAR Market) Growth Layer and the introduction of new policies signify a new phase in the development of the STAR Market, enhancing the direct financing capabilities for high-quality Sci-Tech enterprises [4][5]. - The report outlines five key requirements from the Chairman of the China Securities Regulatory Commission (CSRC) to strengthen the STAR Market, including better support for unprofitable innovative companies, enhancing the linkage between equity and debt financing, and fostering a more open capital market ecosystem [2][3]. - The report emphasizes that the STAR Market has become a primary platform for direct financing of new productivity in China, but the IPO pace has slowed down, which is correlated with the existing listing rules that restrict some quality enterprises from going public [4]. Summary by Sections Section 1: STAR Market Development - The STAR Market has been pivotal in facilitating the listing and financing of numerous technology innovation companies over the past six years [4]. - Recent policy changes aim to accelerate the listing of high-quality unprofitable Sci-Tech enterprises, thereby improving market liquidity and attracting new capital [4][5]. Section 2: Policy Recommendations - The report suggests implementing six reform measures, including introducing a pre-review mechanism for IPOs of quality technology companies and expanding the applicability of the fifth listing standard to more frontier technology sectors [3]. - It also highlights the importance of nurturing patient and long-term capital, encouraging participation from social security funds and insurance capital in private equity investments [2][3]. Section 3: Investment Opportunities - The report indicates that the expansion of IPOs and mergers and acquisitions in the STAR Market will positively impact the investment banking sector, leading to a recovery in investment banking revenues [5]. - It is recommended to focus on leading brokerage firms that are well-positioned to benefit from the competitive landscape of the STAR Market due to their resource advantages and pricing capabilities [8].