The Beijing Stock Exchange (BSE) is the newest entrant into the Chinese capital market infrastructure. It was opened to select investors in 2021. Recently, additional steps have been taken to open this exchange up to retail investors (a category which includes qualified expatriates). More information can be found on the new exchange here.
Chinese financial authorities founded the BSE to provide greater access to capital by Chinese small and medium enterprises. While many small and midsize companies are also listed on the Shanghai and Shenzhen exchanges, the BSE is the only board in China dedicated to this class of company. Many mutual funds exist in China which cover the top companies by market cap, and cover indices such as the CSI 300, CSI 1000, or CSI 1000.
Now, mutual fund managers are turning their eyes to the BSE and are establishing index funds. Qualified investors can invest in the top companies in the BSE. Many of the restrictions, including a fixed number of years of investment experience or a verification of assets, are being dropped. This, along with brokerage’s aggressive outreach, enticed more than 100,000 new individual investors to open accounts since September 2023, with total account holders reaching more than 6 million.
So who are the major players in this board? While some are name-brands already, others are more niche players active only in China. The BSE is home to the ‘little giants,’ smaller companies that have technologies, products, or market access in areas which align with national priorities. Read on below to learn about some of the largest companies listed on the Beijing Stock Exchange.
Companies in the new energy vehicle value chain enjoy a strong market in China. China’s is becoming a dominant player in electric vehicles and in the battery electric supply chain. Companies like BTR benefit from this positioning. BTR manufactures lithium-ion battery materials, focusing on the production of cathode and anode materials and graphene. With companies like BYD and CATL positioning themselves globally, companies like BTR feed the increase in demand for battery materials.
BTR New Material Group is growing quickly. In 2022, revenue grew by 144.76% year-over-year, reaching 25.68 billion yuan, and net profits rose by 60.86% year-over-year to 2.32 billion yuan.
Linton Machine - 连城数控
The push towards renewal energy and the green economy drives a growing portion of China’s economy. Wind, solar, and other renewable energy sources are in high demand and companies that fulfill this demand grow quickly. Headquartered in Dalian, Linton Machine specializes in photovoltaic and semiconductor equipment. This includes equipment for silicon wafer cutting and grinding, battery components and more for the semiconductor industry. China has invested billions to establish large-scale high-end semiconductor manufacturing using domestic technologies. There have been some high profile misses and many of these companies have failed, but companies in the supply chain (like Linton) will continue to benefit.
Haitai New Energy - 海泰新能
Another energy related player, Haitai Solar manufacturers photovoltaic modules. They established utility scale power plants and invested into energy storage and hydrogen applications. They’re a tier 1 photovoltaic module maker, and with 8GW of production capacity, they are one of the top 10 photovoltaic companies in China. They conduct large scale installations for utilities and retrofit installs on commercial and industrial facilities. China has been the largest solar panel provider for more than a decade, and with panel prices continuing to remain low, domestic suppliers may continue to enjoy a stable market share.
WellTrans - 微创光电
China is a world leader in surveillance technologies. WellTrans, based in Wuhan, develops surveillance equipment and systems integration for the transportation industry. Their video, audio, and dispatch technologies are deployed across China. Their infrastructure provides better visibility into traffic flows, including niche applications such as traffic in tunnels. Increasingly, equipment from companies like WellTrans is integrated into new infrastructure directly, as China pursues an infrastructure-based (rather than vehicle-based) approach to traffic management, autonomous driving, emergency response, etc.
There are themes to be found in the Beijing Stock Exchange index funds – many of the companies on the BSE are in more traditional industries (like manufacturing, mining, or processing) who are seeing a wave of strong demand for their products due to global or national priorities, such as greenhouse gas emissions, electric vehicles, data centre installation, and more.
For more information, visit the sites below: (Chinese language)
