On April 10, the ChiNext Index surged by 3.78%, reaching a new high not seen since December 2021. It led major A-share indices by breaking out of a consolidation pattern, achieving a year-to-date gain of 7.66%. Since the market trend beginning on September 24, the index has risen over 125%, outperforming the CSI 300 Index by more than 80 percentage points.
Following the market close, the China Securities Regulatory Commission released guidelines to deepen reforms on the ChiNext board, aiming to better serve the development of new quality productive forces. A key focus of the document is the introduction of a fourth set of listing criteria. Market analysts indicate this move signifies a targeted effort to foster the continuous emergence of new quality productive forces. It also represents a step forward in enhancing the capital market's inclusiveness and adaptability, thereby strengthening its appeal, competitiveness, and long-term investment value.
The reform package includes multiple measures designed to support new quality productive forces. Analysts highlight that this initiative marks a milestone in making the capital market more inclusive and adaptable. The new fourth listing standard addresses financing challenges for companies in emerging and future industries. It introduces a collaborative mechanism with local governments for a novel review reference model and implements comprehensive reforms on the investment side to improve market liquidity and attractiveness. The policy balances robust regulation with development promotion, aiming to enhance the quality of listed companies from the outset and direct more resources toward sectors embodying new quality productive forces.
For investors, this means the ChiNext board will host more high-growth, innovative companies, increasing its long-term investment appeal. Key aspects of the guidelines include:
First, the introduction of the fourth listing standard is a major highlight. Tailored for companies in emerging and future industries characterized by significant initial investment, low initial revenue, but rapid value appreciation, it sets differentiated criteria based on market capitalization, revenue, and growth/innovation metrics. This design significantly enhances inclusivity for high-potential firms, allowing promising yet currently unprofitable innovative companies to list.
Second, a pre-review mechanism for IPOs will be established to protect the technological and information security of innovative companies, permitting firms undergoing review to conduct capital increases for existing shareholders.
Third, a collaborative mechanism with local governments represents an institutional innovation. Piloting in prefecture-level and higher cities, local governments can submit information on potential listing candidates to regulators. This information serves as a reference during the review process but is not mandatory, leveraging local knowledge while maintaining review independence.
Fourth, refinancing and M&A rules have been optimized. A shelf issuance system allows "one-time registration, multiple offerings," catering to the flexible funding needs of companies with long R&D cycles. Simplified procedures streamline decision-making and raise quota limits. For M&A support, ChiNext-listed companies are permitted to absorb mergers with domestically listed companies that have been public for less than three years.
Fifth, investment-side reforms are deepening. Trading mechanism improvements include introducing market makers, adjusting block trade confirmations to real-time, and adding fixed-price ETF trading after hours. The product ecosystem will see optimized ChiNext index compilation, more ChiNext ETFs and options, and the potential introduction of ChiNext index futures. Investor services will allow fund advisors to allocate to ChiNext ETFs and include them in fund trading platforms. Strategic investment standards will be optimized to encourage medium-to-long-term capital participation in private placements.
Sixth, issuance pricing mechanisms will be reformed. This involves optimizing the high-price elimination ratio for IPOs, piloting higher allocation ratios for institutional investors accepting longer lock-ups in innovative companies, and raising strategic placement limits for small and mid-cap stocks.
Seventh, equity and debt financing tools will be expanded. Support will be given for ChiNext-listed companies to issue bonds for technological innovation, green projects, and intellectual property securitization, with streamlined disclosure for qualified firms.
The guidelines also emphasize strengthening whole-process supervision. This includes strict entry controls, enhanced continuous monitoring with穿透式 supervision, severe penalties for violations like fraud and insider trading, and rigorous enforcement of delisting rules with robust investor protection. Intermediary responsibilities are also underscored, with improved oversight of sponsors and stricter qualification requirements for representatives.
Since the beginning of 2026, global capital markets have experienced significant volatility amid geopolitical tensions. Escalating conflicts have driven fluctuations in oil prices and boosted risk aversion, pressuring major indices. Against this backdrop, the ChiNext board has demonstrated notable resilience, serving as a pillar for the "tech and growth" theme in A-shares.
Not only has the ChiNext Index performed strongly this year, but it has also shone since the onset of the current bull market. As of April 10, the index has gained 125% since September 24, compared to a 44% rise in the CSI 300 Index over the same period.
Analysts attribute this outperformance to rotational strength among its key sectors. Data shows the top three sectors in the ChiNext Index by weight are power equipment, communications, and electronics, collectively accounting for approximately 70%. These industries have benefited from substantial capital expenditure driven by the AI revolution and strong performance in the high-growth new energy sector, contributing to robust stock price appreciation.
Following the significant advance, the ChiNext Index's valuation percentile remains relatively low, offering a notable valuation advantage compared to other major indices. The dynamic price-to-earnings ratio of the ChiNext Index is approximately 41, sitting at the 37th percentile over the past decade. In contrast, the valuation percentiles for the CSI 300, CSI 500, and CSI 1000 indices all exceed the 70th percentile.
Investors optimistic about the ChiNext board may consider related index products and enhanced index funds, such as the Tianhong ChiNext ETF (159977), the Tianhong STAR Market and ChiNext ETF (159603), the Tianhong ChiNext 300 ETF (159836), the Tianhong ChiNext Index Enhanced Fund (A/015794, C/015795), and the Tianhong ChiNext Index Quantitative Enhanced Fund (A/024857, C/024858).
Investors are reminded that all views are for reference only and do not constitute investment advice. All investments involve risk. Index funds are subject to tracking error. Past performance of a fund is not indicative of future results. The performance of other funds managed by the fund manager or portfolio managers does not guarantee the performance of this fund. Investors should carefully read the fund prospectus and contract before investing, consider their investment objectives, time horizon, experience, and risk tolerance, and make rational investment decisions based on a understanding of the product and suitability assessment. Funds primarily investing in overseas securities markets carry additional risks such as exchange rate risk and foreign market risk, alongside general investment risks similar to domestic funds.
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