Photo by Mitchell Luo Onon Unsplash

In the launched yesterday, will China ’s capital market be good in the second half of 2020? (Part 1) , we discussed changes in global capital markets since the outbreak and opportunities for China under the new pattern. Our preliminary conclusion is: global asset re-allocation is almost certainly a phenomenon that will occur on a large scale. The new pattern after asset re-allocation is likely to be different from the past; those places where the epidemic control is effective and economic growth has recovered better will take the lead Get the favor of this money; compared to the US, the current Chinese market is more attractive.

In today ’s next part of China ’s Capital Markets, we will turn our perspective to the domestic market to see the opportunities in this round of capital market reform in the GEM registration system, and how it relates to entrepreneurs, and who will benefit from them? ?

Before entering the text, first share a few conclusions:

  • Looking back at the three capital market reforms that China experienced in 2004-2019, private enterprises are all beneficiaries. Specifically, the birth of the small and medium-sized board mainly benefited the leading companies in various sub-sectors, especially the leading manufacturers in the sub-sector of the manufacturing industry; and when the GEM was launched, it greatly helped the financial crisis at that time. Private enterprises, especially small and medium-sized invisible champions in some emerging industries; the same is true for science and technology innovation boards. A group of companies with core technologies that are more in line with the country’s “quality and efficiency” industrial transformation and structural adjustment direction will especially benefit.


  • The GEM registration system launched in the context of the epidemic situation can reduce the threshold for listing of startup companies, allow special equity structures and red chip companies to be listed, and reserve space for unprofitable companies to list, which increases the exit channels for early investment, but It will also change the competitive landscape of VC and PE.


  • The valuation of companies that meet the guidance and deployment of the country ’s long-term policies will become higher.