SFC Markets and Finance｜Finance and digital intelligence support SME growth in Guangdong

南方财经全媒体记者 李依农 杨雨莱 广州报道

Small and medium-sized enterprises (SMEs) in Guangdong are vibrant and ever-evolving, continually innovating and advancing, showcasing the immense resilience and depth of Guangdong's economic development.

Looking ahead, accelerating the development of new quality productive forces through technological transformation of existing productive forces will be essential. How can finance and digital intelligence empower these new productive forces, support the growth of SMEs, and promote high-quality development? Let’s follow the 2024 Guangdong High-Quality Development Research Tour and explore together.

Zhang Chengdong, Senior AI expert at Guangzhou Zhijing Information Technology

Zhang Chengdong: It solves the issue of inspiration in clothing design. In the past, clothing design heavily relied on clothing designers. A clothing designer could create 2 to 3 designs a day, which was their upper limit. After we have this system, theoretically speaking, the number of designs is infinite and will only rely on our computing resources.

Liu Yunchun, Vice President of Full Fabric Production and Research at Guangzhou Zhijing Information Technology

Liu Yunchun: We've been working on transformation for many years now. The textile industry is indeed quite traditional. The biggest challenges for small and medium-sized enterprises in this transformation are first, management capabilities or their overall mindset. Second, different companies might have their own unique challenges, so this can vary. However, the overall nature of the industry is still quite traditional. They might have been doing things the same way for decades without needing digitalization, just relying on human labor. Every part of the process relies heavily on people.

But, over the past few years, due to market competition and the overall economic climate, these companies have gradually begun to understand that they need to move away from traditional methods to improve.

For example, as I mentioned earlier, if my factory has 500 machines, I used to hire hundreds of people to manage every step of production because it's impossible to rely solely on workers' self-discipline. Take our Feisuo Smart Textile device for instance. We equip each machine with an IoT device that collects real-time data. We can see if a machine has stopped, why it stopped, and how long it has been down. We can directly access the information in this way. Previously, we relied on people to monitor and if they neglected, the machine could be down for a long time. Now, with this device, we get an alert as soon as the machine stops so we can immediately send someone to check if it needs maintenance. This greatly improves the machine's usage and operational efficiency.

In our upstream production processes like spinning, weaving, and dyeing, we utilize our digital solutions and smart products to help factories boost efficiency and cut costs. For example, in the weaving process, we can improve efficiency by 30%. In the dyeing process, we can increase sample efficiency by 45%.

At first, it was quite difficult because, as I mentioned, many have been following traditional methods for years or decades. How to make them truly experience and really benefit from digitalization is the crucial part. So we developed this platform to find the right entry points to help these businesses. By adopting our solutions, they can enhance efficiency and lower costs. Of course, we focus on some benchmark factories first, ensuring our products are well-implemented and demonstrating their value. Then we aim to extend our influence to other factories in the industry.

Supporting SME growth through technological and inclusive finance

For this stop, we have arrived at the Guangdong Equity Exchange, the pivotal platform providing comprehensive financial services for SMEs in Guangdong. How do we support the growth of small and medium-sized enterprises with technological and inclusive finance? And how do we promote high-quality economic development through innovative financial solutions? Let's take a closer look!

Xu Xiubin, deputy director of the Office of Financial Commission of the CPC Guangzhou Municipal Committee

Xu Xiubin: Everyone knows that the capital market is multi-tiered with the Main Board Market at the top, followed by different sectors, including the New Third Board Market and also the "Fourth Board Market," which actually should be the foundation of the whole market.

It mainly has several functions. I think one is to identify some good high-quality enterprises and some promising start-ups. Some tech companies are at an early stage in their development, and they actually do not meet the conditions for listing. So at our equity trading center, they can essentially make some initial attempts in the capital market, such as training and strengthening their awareness about going public. They can make it here. This is one point.

The second point is actually after listing here, they need to undertake some changes, such as joint-stock system reforms, and some companies need to disclose their information. This will strengthen their awareness related to the capital market. In this regard, it should lay a very good foundation for the companies' future listing. That's one aspect of it.

Another aspect is that Guangdong Equity Exchange also has different sectors, such as a special edition for technological innovation and so on. It has these different sectors, and different companies can be here. It is now managing companies in a classified way, thus cultivating them.

The third point is that the Guangdong Equity Exchange is actually a platform, and after companies are listed here, they would be more well-known. Their financing needs can be communicated to other institutions through the Guangdong Equity Exchange. These institutions will know that these companies have financing needs, and they can fulfill these needs.

The fourth point is the connection between the Fourth Board Market and the Third Board Market is very close, and the China Securities Regulatory Commission attaches importance to the Fourth Board market. Therefore being listed here is quite beneficial for later listing on the Third Board Market. So it can also offer help for its future listing.

The last point is that the Guangdong Equity Exchange has many pilot services, such as the Secondary Fund. In recent years, the China Securities Regulatory Commission has approved many pilots, and it is actively engaged in reform and innovation processes. That is why we feel that the future development of the Guangdong Equity Exchange will be very good. It will definitely play an important role for Guangzhou's multi-tiered financial market in cultivating and listing tech companies.

Wang Zhenhua, General Manager of Investment Banking Division, Guangdong Equity Exchange

Wang Zhenhua: Cultivate enterprises for listing is to promote technology-based enterprises by leveraging the capital market. Because for technology-based enterprises, they face common pain points and difficulties in the early stages such as the lack of funds and technology and the need for technology upgrades. Also, they lack talents and industrial resources. But these enterprises are still small in scale and not standardized in an early stage of development. Thus, some leading formal securities companies and investment institutions may not pay much attention to them or invest many resources.

The Guangdong Equity Exchange, as part of the National Equities Exchange and Quotations, provides SMEs, especially technology-based SMEs, with customized services. Our main service method is to solve the funding issues for enterprises. Supported by Guangzhou's Local Financial Supervision and Administration Bureau, we have the Guangzhou Technology Finance Roadshow Center and the Guangzhou New Third Board Enterprise Roadshow Center.

Since 2016, we have established the two centers to conduct roadshows. Up to now, we have held more than 80 sessions, helping SMEs raise over 8 billion yuan in total. A considerable number of these enterprises have further expanded after obtaining funding through our roadshows, even listing on Stock Exchanges in Beijing, Shanghai, and Shenzhen.

For these technology-based enterprises, several major industries and sectors are particularly in need of funds. Based on our experience, the first is the biopharmaceutical industry. This is an industry that requires high investment. You can't rely solely on bank loans and original investors' investments. The biopharmaceutical industry, whether large, medium, or small, all needs funds. It seems like it's always on the road to finding money. Therefore, it is quite significant for us.

The second industry is information technology and artificial intelligence, which are typical representatives of new productivity. They also need funds. For Internet companies especially, they spend a lot of money to verify and implement their business models, which then brings in the GMV.

Finally, there is the high-end manufacturing industry. Speaking of this, Guangzhou relies on manufacturing to establish itself. Manufacturers are engaged in production and operations every day and don't have time to reach out to investors. So they also need our regional equity exchange center and the Technology Finance Roadshow Center to help them attract external equity investments.

In the process of attracting investments, we help enterprises reflect on their business models and align them with the business models and industry positioning of listed companies. Not only do they gain favor from external funding, but it is also a process of self-refinement, self-organization, self-examination, and self-reflection for the enterprises.

First, we seek funds. Next, we seek talents. Because these technology-based enterprises need core technical personnel, we collaborate with research institutes and university graduates, as well as the Guangzhou Talent Exchange Center, some experienced professional managers, and technical talents, introducing them to these enterprises.

Vincent Zheng, Chief Financial Officer of Biosyngen Pte. Ltd.

Vincent Zheng: We're working closely with the Guangdong Equity Exchange Center. Last year, when the company was doing the Series B+ financing, the Guangdong Equity Exchange Center, as our financial advisor, helped the company organize many roadshows, which finally helped us  receive tens of millions of equity financing in RMB.

（市场有风险，投资需谨慎。本节目嘉宾意见仅代表本人观点。）

策划：于晓娜

监制：施诗

责任编辑：李依农

记者：李依农 杨雨莱

制作：李群 蔡于恬

拍摄：李依农 谢茂翰 杨雨莱 

新媒体统筹：丁青云 曾婷芳 赖禧 黄达迅

海外运营监制: 黄燕淑

海外运营内容统筹: 黄子豪 

海外运营编辑：庄欢 吴婉婕 龙李华 张伟韬

出品：南方财经全媒体集团