Open Source Securities: Implementation of the 1+6 policy, marginal easing of Sci-Tech Innovation Board IPO, favorable for securities investment banking and direct investment business.

Opensource Securities published a research report stating that the "1+6" policy is a powerful measure for the capital market to better serve technological innovation and the development of new quality productivity. Through efficient allocation of resources in the market, promoting major original innovation and technological breakthroughs, accelerating industrialization, landing, and market application promotion, and thereby expanding effective demand, it is the pathway to realizing the service of the real economy by the capital market. Securities companies, as intermediary institutions, benefit from capital market reform policies while implementing their own responsibilities as "gatekeepers" of the capital market. After the policy is implemented, there will be marginal relaxation in the IPO of the Sci-Tech Innovation Board, which will benefit brokerage investment banks and PE direct investment business. The valuation and institutional holdings of the brokerage sector are at a low level. Macro-level measures to stabilize the stock market will continue, coupled with continued year-on-year growth in performance, leading to optimism about opportunities in the brokerage sector. Opensource Securities' views are as follows: Launching the "1+6" policy measures to better play the role of the Sci-Tech Innovation Board reform as a "testing ground" On June 18, 2025, the China Securities Regulatory Commission (CSRC) further deepened reforms with the introduction of the "1+6" policy measures, issuing the "Opinions on Establishing a Sci-Tech Growth Layer on the Sci-Tech Innovation Board to Enhance System Inclusiveness and Adaptability." The "1" refers to setting up a Sci-Tech Growth Layer, a dedicated level within the Sci-Tech Innovation Board, and restarting the application of the fifth set of standards for listing on the Sci-Tech Innovation Board for unprofitable enterprises, providing more precise services for high-quality technology companies with significant technological breakthroughs, broad business prospects, and significant research and development investment. "6" refers to introducing 6 innovative reform measures on the Sci-Tech Innovation Board, including piloting the introduction of a system of senior professional institutional investors for companies applying the fifth set of standards on the Sci-Tech Innovation Board; piloting a pre-IPO review mechanism for high-quality technology companies; expanding the applicability of the fifth set of standards to support more cutting-edge technology companies in areas such as artificial intelligence, commercial space, and low-altitude economy; supporting unprofitable technology companies under review to carry out capital increase and share expansion activities with existing shareholders; improving the re-financing system of Sci-Tech Innovation Board companies and standards for identifying strategic investors; and increasing investment products on the Sci-Tech Innovation Board and risk management tools. At the same time, the regulatory authority expressed its intention to officially launch the third set of standards for the Growth Enterprise Market, supporting high-quality unprofitable innovative enterprises for listing. Restarting the listing of unprofitable enterprises to enhance the system inclusiveness and adaptability of high-quality technology companies (1) Setting up a Sci-Tech Growth Layer on the Sci-Tech Innovation Board to focus on technology companies with significant technological breakthroughs, broad business prospects, and significant research and development investment but are currently in the unprofitable stage. After setting up the Sci-Tech Growth Layer, existing and newly registered unprofitable technology companies will all be included in it. (2) Impact of setting up the growth layer: first, it is conducive to further demonstrating the policy direction of capital markets supporting technological innovation and stabilizing market expectations; second, it provides a more controllable "experimental space" for incremental system reforms, allowing for pilot testing of more inclusive policy measures; third, it is conducive to centralized management of unprofitable technology companies, making it easier for investors to identify risks and better protect investors' legitimate rights and interests (requiring the addition of a "U" symbol after the stock abbreviation + special risk disclosure book). (3) Expanding the applicability of the fifth set of standards. The fifth set of listing standards on the Sci-Tech Innovation Board does not require revenue and net profit scale for companies but emphasizes factors such as "the main business or product must be approved by relevant state departments, and there is a large market space" and "obtained stage achievements," providing convenience for companies that are currently not profitable but truly have core competitiveness to enter the capital market. Therefore, this standard is mainly applicable to companies with complex product technology, high capital investment, and a long research and development cycle. It has already been successfully applied in the biopharmaceutical field, yielding positive results. This expansion of the applicability of the fifth set of standards supports more cutting-edge technology companies in areas such as artificial intelligence, commercial space, and low-altitude economy to apply for the fifth set of listing standards on the Sci-Tech Innovation Board. Sc-Tech Innovation Board IPO marginally relaxed, benefiting brokerage investment banks and direct investment businesses From January to June 2025 (as of June 18), there were a total of 48 IPO projects (compared to 41 in the same period in 2024), with an IPO underwriting scale of 358.6 billion yuan, a year-on-year increase of 21%. Among them, the Sci-Tech Innovation Board had 7 IPO projects (compared to 7 in the same period in 2024), with an IPO underwriting scale of 5.6 billion yuan, a year-on-year decrease of 33%. After the policy was implemented, the Sci-Tech Innovation Board IPO marginally relaxed, benefiting brokerage investment banks and PE direct investment business. The valuation and institutional holdings of the brokerage sector are at a low level. Macro-level measures to stabilize the stock market will continue, coupled with continued year-on-year growth in performance, leading to optimism about opportunities in the brokerage sector. Three stock selection themes: retail dominant brokers with outstanding performance flexibility, financial technology targets, while also optimistic about companies benefiting from the increased capacity and activity of the Hong Kong Stock Exchange. Recommended stock portfolio: Jiangsu Jinzu, HKEX, PICC Property & Casualty; Beijing Compass Technology Development, Orient, East Money Information, Caitong; China Life Insurance, China Pacific Insurance. Beneficiary stock portfolio: Guosen, JF SMARTINVEST, China Galaxy, CMSC, Hithink RoyalFlush Information Network, New China Life Insurance. Risk warning: The uncertainty of the policy implementation effect; intensified industry competition.