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The stock performance of companies listed on the Shanghai Stock Exchange’s Nasdaq-style Star Market has experienced a significant increase of 48.3 percent since its debut on January 20. This impressive growth highlights strong, sustained support from investors for China’s leading technology firms.
The index’s substantial rise is driven by supportive policies, improving industry fundamentals, and a surge in investment funds. These factors collectively reflect the rapid development of China’s innovation in science and technology over the past year, according to a researcher at Tsinghua University’s National Institute of Financial Research.
“The remarkable growth of the Star Market Composite Index in its first year signifies the creation of a clear, index-based investing channel for China’s core tech enterprises,” explained a financial researcher from Nankai University’s Institute of Finance & Development. “The rapid expansion of ETFs linked to this index has transitioned the idea of ‘tech investment’ from a vague concept into a practical, accessible tool for everyday investors, effectively channeling private capital toward key technology companies.”
As of December 24, forty-five fund managers in China had launched 77 ETFs based on this index, managing a total of 27 billion CNY (approximately 3.8 billion USD), with 22 of these listed on the Shanghai Stock Exchange. Since their inception, these ETFs have drawn increased investments from institutional players such as insurance companies, brokerages, and bank-backed wealth management products. An industry insider noted that this trend shows medium- and long-term investors view ETFs as a means of broad exposure to the constituent companies and have strong confidence in the long-term prospects of stocks in the Star Market.
The index’s growth also reflects the solid profit and revenue increases among these listed tech companies, propelled by China’s rapidly expanding high-tech sector. A sample group of 576 companies on the index achieved a 7.1 percent rise in net profits in the first three quarters compared to the previous year, reaching 48.3 billion CNY (around 6.9 billion USD). Meanwhile, their revenue climbed 7.7 percent to 1.1 trillion CNY (about 157 billion USD). Notably, both profit and revenue growth accelerated each quarter, as shown in their latest financial disclosures.
Looking ahead, as China promotes a more open and inclusive approach to its capital markets and enhances cross-border financing channels, inflows of foreign investment into the Star Market are expected to increase. The listed companies are also anticipated to participate more actively in global value chains through cross-border mergers, technological collaborations, and other strategic moves, evolving from domestic innovators to international leaders.
Among the 576 stocks analyzed, 202 belong to the industrial sector, 199 are in information technology, 107 operate in the healthcare and medical sector, 33 work in raw materials, 15 in communications, 19 focus on consumer markets, and one is in the energy sector. Ten of these companies boast market caps exceeding 100 billion CNY (roughly 14.2 billion USD), with a combined valuation of about 2.8 trillion CNY (around 400 billion USD). These top players account for approximately 27.5 percent of the total market value of the sampled stocks.
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