Shou Xiaoli:

Thank you for your introduction, Mr. Li. The floor is now open for questions. Please identify your media outlet before asking questions.

Red Star News:

The introduction mentioned the importance of strictly managing access to IPOs to enhance the quality of listed companies from the outset. What specific measures will be taken in this regard? Thank you.

Yan Bojin:

Thank you for your question. This time, the CSRC issued a document dedicated to enhancing access to IPOs, outlining several targeted measures. Some of these measures reinforce past effective practices, while others introduce new arrangements. The core objective is to fortify the regulatory chain for IPOs, enforce stricter oversight, and enhance the various functions of the market. Practical observations have revealed deficiencies such as unsound internal control mechanisms, irregular corporate governance among some prospective listed companies, and even instances of financial fraud. In response, we will strengthen supervision across all links of the entire IPO chain. Prospective listed companies must adopt a correct IPO mindset, effectively implement the modern corporate system, and assume primary responsibility for the quality of information disclosure. Intermediary institutions must diligently fulfill their role as "gatekeepers" by fully employing methods such as verifying cash flow to ensure financial authenticity. We will also establish a regular and ongoing on-site supervision mechanism for intermediary institutions, aiming for full coverage within a three-year cycle. Exchanges must fulfill their duty as the primary reviewing party, enhance their examination of prospective listed companies, and stringently regulate overpricing and over-funding. Additionally, the CSRC will intensify institution establishment, implementation, and coordination, and significantly increase the proportion of on-site inspections. We will deepen interdepartmental oversight cooperation and ensure retrospective checks and accountability for fraudulent issuance and other activities violating laws and regulations throughout the entire IPO chain.

We have also fully drawn on the opinions and suggestions of all parties in the market, and there will be stricter requirements for the listing threshold, mainly in three aspects. First, modern corporate systems must be established before listing. The funds of investment projects should be reasonable, complete with well-conceived short-, medium- and long-term plans. Sudden "clearance-style" dividend payment should not be carried out, and the "key minority" should have a good reputation. Second, we will study and improve the listing indicators for some boards. From the perspective of regulatory practice, the current financial indicators for listing in some boards are relatively low and the comprehensive indicators are insufficient. They do not fully guide the diversion of enterprises to appropriate boards. We have also heard many market voices suggesting improvement to listing indicators. We will carefully analyze and systematically study this matter, especially by referring to the situation of newly listed enterprises in recent years and enterprises now under listing application review, and then guide the Shanghai and Shenzhen Stock Exchanges to revise the listing rules, appropriately raising the financial indicators for some boards and enriching comprehensive indicators, so as to enable enterprises at different stages of development, in different industries, and with different sizes to list in appropriate boards. Third, we will strictly regulate the listing of unprofitable enterprises. In practice, the development of technology companies may have an unprofitable stage, which does not necessarily mean that these companies have poor continuous operating capabilities. Some high-quality technology companies can grow better and faster through listing, but they must not be "pseudo-technology" enterprises that piece together technologies. In this regard, we will seek the opinions of relevant industry authorities on the technological quality of unprofitable enterprises, and better coordinate the support for technological development and the protection of investors' interests. Thank you.