Core Viewpoint - The China Securities Regulatory Commission (CSRC) aims to enhance the role of the Sci-Tech Innovation Board (STAR Market) as a "testing ground" for reforms, introducing the "1+6" policy measures to improve the market ecosystem and support innovation-driven development [2][4]. Group 1: STAR Market Reforms - The CSRC will deepen reforms on the STAR Market by establishing a Sci-Tech Growth Tier and restarting the listing of unprofitable companies under the fifth set of standards, targeting high-quality tech firms with significant breakthroughs and R&D investments [2][3]. - Six new reform measures will be introduced, including the trial introduction of senior professional institutional investors, pre-IPO review mechanisms for quality tech firms, and expanding the applicability of the fifth set of standards to more frontier tech sectors [2]. Group 2: Support for Innovation - The current funding mechanisms for innovation are inadequate, with a lack of long-term and patient capital, indicating a significant role for the capital market in supporting both large tech giants and emerging innovative firms [4]. - The CSRC emphasizes the need for collaboration among investors, scientists, and entrepreneurs to foster a virtuous cycle between technology, capital, and industry [4]. Group 3: Financial Instruments and Market Access - The CSRC plans to enhance the synergy between equity and debt markets to support tech innovation, including the development of Sci-Tech bonds and the approval of the first two data center REITs in the country [6]. - There will be efforts to guide more long-term funds into tech investments and to make fund share transfer trials a regular practice, optimizing various exit channels for investors [7]. Group 4: Regulatory Measures - The CSRC will strengthen regulatory measures to combat illegal activities such as insider trading and market manipulation, ensuring that the listing process is a starting point for companies rather than an end goal [8]. - The commission will implement a series of measures to enhance the management of mergers and acquisitions, improving the flexibility and convenience of equity incentive programs for listed companies [8]. Group 5: Market Opening Initiatives - The CSRC will accelerate the implementation of key measures for capital market opening, including optimizing the Qualified Foreign Institutional Investor (QFII) system and expanding the range of products available for foreign investors [9]. - Plans include the introduction of RMB foreign exchange futures to help manage exchange rate risks and the promotion of LNG futures and options to facilitate foreign participation in the Chinese market [9].

Core Viewpoint - The China Securities Regulatory Commission (CSRC) has approved the registration of the first two data center REITs in the country, indicating a significant step towards enhancing the linkage between equity and debt markets and promoting the development of technology innovation bonds [1] Group 1 - The approval of the first two data center REITs marks a milestone in China's financial market development [1] - CSRC Chairman Wu Qing emphasized the importance of strengthening the linkage between stock and bond markets [1] - The initiative is part of a broader strategy to promote technology innovation bonds [1]

Group 1 - UBS analysts believe that market concerns regarding the sustainability of AI investments in China's data center industry are "excessive" and that the sector's valuation has become attractive after a 40%-60% pullback from its peak in February [1] - UBS maintains a "Buy" rating on GDS Holdings Limited (GDS.US) and Century Internet Group (VNET.US) due to strong fundamentals and potential catalysts from data center REITs that may boost stock prices [1] - The report indicates that despite macroeconomic uncertainties, UBS has lowered the target price for GDS from $58 to $45 and for VNET from $23 to $12.80, while reaffirming GDS as its preferred stock [1] Group 2 - UBS expects GDS to benefit from new AI-driven orders and its core infrastructure layout, while VNET's wholesale business is projected to achieve a 56% growth in EBITDA by 2026 [1] - Key conclusions from industry research include manageable impacts from U.S. chip bans, optimization of data center site selection around first-tier cities, and an increase in demand for high-power density racks [1] - UBS also notes that the progress of GDS's REIT approval may support its valuation, predicting that the industry's EBITDA compound annual growth rate (CAGR) will reach 20% by 2026 [2]