On November 28, Shenzhen Stock Exchange (SZSE) and its wholly-owned subsidiary Shenzhen Securities Information Co., Ltd. (SSI) announced a periodic adjustment made, in line with the index methodologies and taking into full account of factors such as market capitalization representativeness, securities liquidity and operation compliance of SZSE-listed companies, to the constituents of SZSE series indices including Shenzhen Component Index, ChiNext Index and Shenzhen 100 Index (collectively referred to as the “1+2” core indices or core indices). The adjustment will be effective as of 12 December 2022.

SZSE and SSI make active efforts to build the “1+2” core indices system to better serve the promotion of self-reliance and self-improvement in science and technology and the high-quality development of economy. This adjustment brings an increase in the proportion of strategic emerging industries and “high growth and high innovation” enterprises in sample stocks of the core indices, and further demonstrates the effect of economic transformation and upgrading.

Shenzhen Component Index better serves the real economy through a wider coverage of “Made in China” enterprises

Shenzhen Component Index is the benchmark of the SZSE market. In the adjustment, Shenzhen Component Index replaced 26 constituents with 15 ChiNext Board companies and 11 Main Board companies, and 27 constituents have been listed for less than two years. After the adjustment, as at 25 November 2022, Shenzhen Component Index took up 65% of the total market capitalization coverage of the Shenzhen A-share market, and it has 354 Main Board stocks, a weight of 70%, and 146 ChiNext Board stocks, a weight of 30%.

Shenzhen Component Index is the benchmark index with the highest ratio of manufacturing stocks in China’s stock markets. After the adjustment, manufacturing stocks account for 74% of the Shenzhen Component Index, showing strengthened support to “Made in China” enterprises and the real economy. The weight of strategic emerging stocks rises to 67%, and that of advanced manufacturing, digital economy and green & low-carbon development stocks reaches 65%.

ChiNext Index fully supports “innovation and growth” and demonstrates strong growth of the green industry

Since the launch more than two years ago, the ChiNext Board reform and the pilot project of the registration-based IPO system have continuously injected vitality into the ChiNext market, showcasing more aggregation effect of innovative, productive and creative enterprises and conventional industries integrated with new technology, new industry, new business form and new model as well as strategic emerging industries in the ChiNext Index. In the adjustment, 10 constituents of ChiNext Index were replaced. After the adjustment, high-tech companies take up 95%, strategic emerging industries 90%, and the three key areas of advanced manufacturing, digital economy and green and low-carbon development 83%.

According to their quarterly reports for the third quarter of 2022, the R&D expenditures of new constituents in the first three quarters totaled CNY 497.8 billion, an increase of 27% year on year; return on equity recorded 13%, operating income increased by 42% year on year, and net profit rose 23% year on year, maintaining high growth potential and good profitability. The development momentum of green industries was particularly strong. Constituents engaged in new energy vehicles and new energy industries saw their net profit rise 108% and 54% year on year, respectively.

Shenzhen 100 Index fully represents “innovative blue chips” and plays a significant demonstration and leading role

Featuring full representation of “innovative blue chips”, Shenzhen 100 Index is an important index for leading innovation-driven enterprises. In the adjustment, the Shenzhen 100 Index had five constituents replaced. After the adjustment, strategic emerging stocks take up 73%, and the three major areas of advanced manufacturing, digital economy and green & low-carbon development account for 70%. Shenzhen 100 Index has gathered core assets of the SZSE market, with over 90% of its constituents being leading players in segment industries. The sample companies of Shenzhen 100 Index have carried forward the fine tradition of dividend distribution. Since the beginning of 2022, 95 companies have paid out dividends totaled CNY 176.3 billion, accounting for 45% of the whole SZSE market. Among them, 82 companies have paid out dividends for three years straight.

The sample stocks of Shenzhen 100 Index lead the A-share market in overall ESG performance and have achieved remarkable results in serving the carbon peak and carbon neutrality strategy. According to CNI ESG Ratings results, 92 constituents of Shenzhen 100 Index were granted the medium-high rating of BBB or higher, among which 23 constituents had the highest rating of AAA.