Analysis of the Impact of the Expanded Gradient Cultivation System for Specialized, Sophisticated, Unique, and New Enterprises on A-Share Market Investment Themes

Based on policy background and the latest market data, I have prepared a comprehensive report titled

for you.

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On January 17, 2024, the Ministry of Industry and Information Technology (MIIT) revised and issued the “Administrative Measures for the Gradient Cultivation of High-Quality Small and Medium-Sized Enterprises”, for the first time including technology-based small and medium-sized enterprises in the gradient cultivation scope, and establishing a three-level cultivation system of “

”[1][2]. This policy adjustment marks that China’s high-quality SME cultivation system has entered a new stage of systematic and standardized development.

In accordance with official policy documents and the requirements of the 15th Five-Year Plan, the core objectives of high-quality SME cultivation include[3][4]:

• Strengthen the dominant position of enterprises in innovation
  : Specialized, sophisticated, unique, and new “Little Giant” enterprises had an average R&D investment of over RMB 30 million in the previous year, with an average R&D intensity of over 7%, far higher than the average level of above-scale industrial enterprises
• Enhance supporting capabilities in industrial chains
  : Support enterprises to increase industrialization investment in accordance with the industrial chain and supply chain needs of leading enterprises in key fields, and focus on improving the resilience and security of industrial chains and supply chains
• Improve multi-level capital market services
  : Deepen inclusive finance pilots on the Beijing Stock Exchange (BSE) and the National Equities Exchange and Quotations (NEEQ), and support high-quality SMEs such as specialized, sophisticated, unique, and new enterprises to list on the exchanges
• Optimize the ecological environment for enterprise development
  : Promote commercial banks to establish a “Specialized, Sophisticated, Unique, and New Loan” with a total scale of over RMB 400 billion, and provide a discount of up to 30% on credit loans for specialized, sophisticated, unique, and new SMEs
• Promote digital transformation
  : The central government’s fiscal funds directly support over 4,200 “Little Giant” enterprises to increase innovation investment, and support 45,000 pilot SMEs in implementing digital transformation

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The expansion of the gradient cultivation system for specialized, sophisticated, unique, and new enterprises has had a profound impact on the A-share market, mainly reflected in the following aspects[3][5]:

Indicator	Data	Interpretation
Specialized, sophisticated, unique, and new enterprises listed on A-shares	Over 2,000 (accounting for over 30%)	Specialized, sophisticated, unique, and new enterprises have become an important part of the A-share market
Proportion of specialized, sophisticated, unique, and new “Little Giant” enterprises on BSE	Over 50%	BSE has become the main listing channel for specialized, sophisticated, unique, and new enterprises
Revenue contribution of specialized, sophisticated, unique, and new enterprises	9.6%	Contribute nearly 10% of total revenue despite making up only 3.5% of the total number of listed companies
Profit contribution of specialized, sophisticated, unique, and new enterprises	13.7%	Profitability is significantly better than that of ordinary SMEs

With the improvement of the policy system and the accelerated development of specialized, sophisticated, unique, and new enterprises, the investment logic of the A-share market is undergoing profound changes[6]:

: In the past, the market focused on enterprises’ gross profit margins and global market shares, but now the core indicator is whether an enterprise is included in the “import substitution” security directory. Once included in the supply chain system centered on Huawei or SMEE (Shanghai Microelectronics Equipment Co., Ltd.), it means obtaining long-term order guarantees and policy support.

: Due to sanctions against visible leading enterprises, a large number of equipment procurement and technological research tasks have been transferred to related enterprises not included in the entity list. Investors need to look beyond the surface and lock in the upstream suppliers of these “shadow” enterprises.

: The third phase of the National Integrated Circuit Industry Investment Fund, with a registered capital of RMB 344 billion, has been launched. Its investment strategy has shifted from “casting a wide net” to “precision guidance”, with capital clearly flowing to the most severe “bottleneck” areas.

Specialized, sophisticated, unique, and new “Little Giant” enterprises show obvious industrial chain distribution characteristics[3][4]:

• Over 60%
  are in industrial basic fields (components, raw materials, basic processes)
• Over 70%
  have been deeply engaged in their industries for more than 10 years (professional focus, long-termism)
• Over 80%
  have entered strategic emerging industrial chains (new energy, semiconductors, high-end manufacturing)

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This is the core theme direction for investing in specialized, sophisticated, unique, and new enterprises, involving national strategic security and industrial self-reliance and control:

:

• Semiconductor equipment and materials
  : Lithography machines, etching machines, thin film deposition equipment, photoresists, electronic specialty gases, large silicon wafers
• Industrial mother machines
  : High-end CNC machine tools, five-axis linkage machining centers, precision components
• Key components
  : Precision bearings, ball screws, linear guides, sensors, reducers
• Industrial software
  : CAD/CAE/CAM, MES systems, ERP

The new energy industrial chain is an important cluster area for specialized, sophisticated, unique, and new enterprises[7]:

• Lithium battery materials
  : Cathode and anode materials, separators, electrolytes, lithium battery equipment
• Photovoltaic equipment
  : Silicon wafers, battery cells, module equipment, photovoltaic auxiliary materials
• Energy storage technology
  : Battery systems, power conversion systems (PCS), energy management systems (EMS)
• Hydrogen energy
  : Hydrogen production equipment, hydrogen storage tanks, fuel cell stacks

“Artificial Intelligence + Manufacturing” has become a national strategic priority[8]:

• AI + Manufacturing
  : Intelligent quality inspection, predictive maintenance, digital twins
• Industrial Internet
  : Industrial Internet platforms, edge computing, data collection equipment
• Intelligent terminals
  : AR/VR devices, wearable devices, service robots

An important direction for innovation-driven specialized, sophisticated, unique, and new enterprises:

• Innovative drugs
  : Targeted therapy, immunotherapy, gene editing
• High-end medical devices
  : High-end imaging equipment, surgical robots, implantable devices
• In vitro diagnostics
  : Molecular diagnostics, immunodiagnostics, biochemical diagnostics

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In accordance with the “Administrative Measures for the Gradient Cultivation of High-Quality Small and Medium-Sized Enterprises” and relevant policy documents[1][2], the basic conditions for technology-based SMEs to apply for specialized, sophisticated, unique, and new certification are as follows:

Indicator	Standard Requirements	Investment Screening Recommendations
Enterprise scale	Annual revenue of over RMB 50 million (2026 latest requirement)	Revenue ≥ RMB 100 million is preferred
R&D investment	Revenue ≥ RMB 100 million: R&D expense ratio ≥ 3%; Revenue RMB 50 million - 100 million: ratio ≥ 6%	R&D ratio ≥ 5% is prioritized
Intellectual property	At least 2 Class I intellectual property rights related to leading products	≥5 invention patents are preferred
R&D personnel	Account for no less than 15% of total employees	≥20% is excellent
Asset-liability ratio	No higher than 70%	≤50% is excellent

• R&D expense ratio to operating revenue: The higher the better (needs to be benchmarked against the industry)
• Absolute value of R&D expenses: Reflects the scale of R&D resource investment

• Class I intellectual property rights: Invention patents, national new drugs, integrated circuit layout designs, etc.
• Independent R&D vs. transferred patents: Priority is given to independent R&D achievements
• Relevance of patents to main business: Directly affects commercial value

• National-level R&D platforms (10 points): Enterprise technology centers, engineering technology research centers, etc.
• Provincial-level R&D platforms (8 points)
• Municipal-level R&D platforms (4 points)

Indicator	Excellent Standards	Assessment Methods
Revenue growth	Compound annual growth rate (CAGR) of revenue in the past 2 years ≥15%	Focus on growth sustainability
Profit quality	Net profit margin ≥10%, high proportion of non-recurring profit and loss excluded net profit	Reflects true profitability
Market share	Niche market share ≥10% or ranked top 3 in the country	Reflects industry status

:

• Whether it is in the key links of the industrial chain to “make up for shortcomings”, “strengthen advantages”, or “fill gaps”
• Stability of industrial chain supporting facilities

:

• Whether it serves industry leaders or “chain master” enterprises
• Customer concentration: Moderate dispersion is preferred to avoid over-reliance on a single major customer

:

• Niche market share and ranking
• Industry discourse power and pricing power

Indicator	Safety Threshold	Excellent Standards
Asset-liability ratio	≤70%	≤50%
Current ratio	≥1.5	≥2.0
Operating cash flow	Positive	Sustained growth
Gross profit margin	Industry average	More than 20% higher than the industry average

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Based on risk-return characteristics, a layered allocation strategy is recommended[3][5][7]:

┌────────────────────────────────────────────────────────────────────┐
│                      Investment Portfolio Allocation Pyramid        │
├────────────────────────────────────────────────────────────────────┤
│                                                                    │
│                        ┌───────────┐                               │
│                        │ Potential Allocation │ ← 10%-20%          │
│                        │ NEEQ Innovation Layer │   Potential to grow into Little Giants │
│                        └───────────┘                               │
│                                                                    │
│                    ┌───────────────────┐                           │
│                    │    Satellite Allocation    │ ← 20%-30%         │
│                    │    BSE Specialized, Sophisticated, Unique, and New Enterprises │   High growth potential + transfer expectations │
│                    └───────────────────┘                           │
│                                                                    │
│              ┌───────────────────────────────────┐                 │
│              │            Core Allocation                │ ← 50%-60%      │
│              │       Listed Specialized, Sophisticated, Unique, and New "Little Giants"        │   Excellent financial performance +    │
│              │                                    │   Sustained R&D +     │
│              │                                    │   Key industrial chain position    │
│              └───────────────────────────────────┘                 │
│                                                                    │
└────────────────────────────────────────────────────────────────────┘

:

• Certified as national-level specialized, sophisticated, unique, and new “Little Giant” enterprises
• Operating revenue ≥ RMB 100 million, net profit margin ≥10%
• R&D expense ratio to operating revenue ≥5%
• Asset-liability ratio ≤70%
• CAGR of revenue in the past 2 years ≥15%
• Niche market share ranked top 3 in the country

:

• Listed on BSE, certified as national/provincial-level specialized, sophisticated, unique, and new enterprises
• Revenue scale of RMB 50 million - 100 million (26.92% of newly listed enterprises in 2025 had revenue over RMB 1 billion[5])
• Engaged in strategic emerging industries
• Potential for transfer to a higher exchange or valuation reassessment

:

• High review efficiency and strong time predictability (average time is about 442 days, shorter than the 701 days on the Shanghai Stock Exchange and 885 days on the Shenzhen Stock Exchange[5])
• Specialized, sophisticated, unique, and new “Little Giant” enterprises account for over 50%
• Initial public offering (IPO) subscription yield remains at 4%-5%

Risk Type	Control Measures
Performance fluctuation risk	Diversify allocation to avoid over-concentration in a single industry or individual stock
Technical route risk	Pay attention to technological iteration dynamics and adjust allocation in a timely manner
Liquidity risk	Pay attention to trading activity and shareholder share reduction situations
Valuation risk	Avoid chasing high prices, focus on the matching degree of valuation and growth
Policy risk	Continuously track the impact of industrial policy changes on the industry

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Segment	Key Target Types	Import Substitution Space
Equipment	Etching machines, thin film deposition equipment, testing equipment	High
Materials	Photoresists, electronic specialty gases, large silicon wafers, precursors	High
Design	Analog chips, power chips, sensors	Medium-High

Segment	Key Target Types	Import Substitution Space
CNC systems	High-performance CNC systems, servo drives	High
Complete machines	Five-axis linkage machining centers, high-end grinding machines	High
Components	Precision bearings, ball screws, linear guides, cutting tools	Medium-High

Segment	Key Target Types	Import Substitution Space
Power batteries	Solid-state batteries, sodium-ion batteries, lithium battery materials	Medium
Intelligent driving	LiDAR, domain controllers, wire-controlled chassis	High
Lightweighting	Carbon fiber, aluminum alloy, high-strength steel	Medium-High

Segment	Key Target Types	Import Substitution Space
Computing power infrastructure	Servers, storage, network equipment	Medium
AI applications	Industrial AI, medical AI, financial AI	Medium
Data elements	Data collection, cleaning, annotation, trading	Medium

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The expansion of the gradient cultivation system for specialized, sophisticated, unique, and new enterprises has had a profound impact on A-share market investment themes:

1. Policy-driven
   : The revision and improvement of the “Administrative Measures for the Gradient Cultivation of High-Quality Small and Medium-Sized Enterprises” provides a clear roadmap and policy support for the development of specialized, sophisticated, unique, and new enterprises[1][2]
2. Market expansion
   : A total of over 2,000 specialized, sophisticated, unique, and new enterprises are listed on the A-share market, accounting for more than 30% of listed companies, forming an important investment sector[3]
3. Value reassessment
   : Specialized, sophisticated, unique, and new enterprises contribute 9.6% of total revenue and 13.7% of total profits despite making up only 3.5% of the total number of listed companies, highlighting their investment value[3]
4. Logic shift
   : Shifting from “commercial logic” to “survival logic”, with supply chain security and import substitution becoming the core investment themes[6]

• Core allocation
  : Listed specialized, sophisticated, unique, and new “Little Giant” enterprises with excellent financial performance, sustained R&D, and key positions in industrial chains
• Satellite allocation
  : Specialized, sophisticated, unique, and new enterprises on BSE, focusing on their growth potential and transfer expectations
• Potential allocation
  : Technology-based enterprises on the NEEQ Innovation Layer, laying out for future listing opportunities

With the start of the 15th Five-Year Plan and the advancement of the “Artificial Intelligence + Manufacturing” strategy[8], specialized, sophisticated, unique, and new enterprises will usher in a new round of development opportunities. It is recommended that investors:

1. Focus on supply chain security
   : Pay close attention to “bottleneck” areas such as semiconductors, industrial mother machines, and key components
2. Emphasize innovation capability
   : R&D investment intensity and intellectual property quality are core assessment indicators
3. Focus on BSE opportunities
   : As the main listing channel for specialized, sophisticated, unique, and new enterprises, BSE will continue to attract high-quality enterprises
4. Diversify to control risks
   : Control investment risks through industry diversification and layered allocation

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[1] Ministry of Industry and Information Technology (MIIT). Administrative Measures for the Gradient Cultivation of High-Quality Small and Medium-Sized Enterprises (Revised 2024). January 17, 2024

[2] Shanghai Municipal Commission of Economy and Informatization. Notice on the Application for the First Batch of Gradient Cultivation of Specialized, Sophisticated, Unique, and New Small and Medium-Sized Enterprises in Shanghai (2026). 2025

[3] China Listed Hidden Champions Club. Initiative of the China Listed Hidden Champions Club. Sina Finance, January 16, 2026

[4] Sino-Foreign Management Media. 7th “China-Made Hidden Champions” Selection Report. 2025

[5] Xinhua Finance. Qualitative Change of BSE IPOs in 2025: From “Small and Beautiful” to “Strong and Excellent”. Sina Finance, January 6, 2026

[6] Oriental Aurora. In-Depth Research and Investment Panorama Report on China’s Lithography Machine Industrial Chain (2025). Eastmoney, 2025

[7] Yida Capital. Year-End Review: 11 IPOs, 2025 Answer Sheet with RMB 6 Billion Allocated. Eastmoney Wealth Account, January 15, 2026

[8] Ministry of Industry and Information Technology (MIIT). Heavy Deployment of “Artificial Intelligence + Manufacturing”, Five Industries Welcome Transformation Roadmap. Sina Finance, January 8, 2026