The Shanghai Stock Exchange (SSE) has issued a public call to action for all listed companies, unveiling an upgraded version of its "Quality, Efficiency, and Returns" special campaign. This "2.0" initiative builds upon the initial call launched earlier in 2024, marking a new phase in the campaign's development.

Building on prior practical experience, the upgraded version focuses more sharply on five key areas: business development, corporate governance, information disclosure, investor returns, and social responsibility. It introduces clearer, quantifiable reference indicators and provides detailed suggestions for disclosure. The SSE is also offering template documents to guide companies in formulating and disclosing their action plans, making it easier for investors to understand a company's current operations and future priorities.

The exchange encourages all Shanghai-listed firms to participate in this 2.0 campaign, with a particular suggestion for index constituent companies and those consistently rated 'A' for information disclosure to lead by example. The initiative also aims to foster a market environment that favors investment in high-quality listed companies, advocating for investors to embrace value and long-term investment principles and focus on firms that are compliant, high-quality, responsible, and committed to shareholder returns.

Evolution of the Special Campaign

The quality of listed companies is directly linked to the healthy functioning of the capital market and the interests of investors. Since the start of 2024, Shanghai-listed companies have actively responded to the campaign. It is reported that approximately 80% have participated and disclosed their action plans, with full coverage already achieved for index constituents like the SSE 50, SSE 180, and STAR 50, excluding newly listed firms.

Market observers note that from routine corporate announcements, it is evident many companies now closely align their daily operations and major decisions with the "quality, efficiency, and returns" theme. The concepts of continuously improving operational quality, actively rewarding investors, and enhancing investor communication have gained broad consensus in the Shanghai market.

However, it has also been observed that some companies' action plans still fall short of investor expectations and high-quality development requirements. Previously, some plans focused heavily on dividends and share buybacks, while other business plans were relatively vague and lacked clear targets, potentially leading to market misconceptions.

Industry experts view this 2.0 upgrade as a precise response to pain points identified in earlier practice. By anchoring the core of operational quality, refining quantitative assessment benchmarks, and providing standardized templates, it offers companies flexibility for autonomous policy-making while also outlining a clear, actionable path for implementation. The initial call focused more on "broad coverage and consensus building." After this phase, the current initiative is moving towards "emphasizing implementation and seeking tangible results."

As the campaign progresses, it is believed that the "quality, efficiency, and returns" concept will increasingly translate from a consensus into specific, effective operational actions. This will push more listed companies to strengthen their core businesses and solidify performance, while continuously improving governance and fostering a stronger returns mindset, thereby solidifying the foundation for the long-term healthy development of the capital market and better serving new quality productive forces and high-quality economic development.

Focus on Enhancing Five Key Areas

The 2.0 action initiative focuses on enhancing listed companies' performance in five key areas.

The first is enhancing the quality and efficiency of business development. The initiative places greater emphasis on value creation at the operational level. It explicitly suggests that companies select at least two core financial indicators reflecting profitability or operational quality—such as Return on Equity (ROE), gross margin, revenue/profit growth rates, R&D progress, or new product launches—for their action plans. Companies are to conduct a quantitative analysis of their current status regarding these metrics and propose actionable improvement targets and specific measures.

This new requirement is seen as potentially compelling companies to confront operational weaknesses and anchor their quality improvement goals to more concrete enhancements in business quality. At the same time, the SSE's initiative also fully considers companies' individual circumstances, allowing them to select and formulate other operational indicators that better reflect their unique business characteristics, demonstrating regulatory inclusivity.

The second area is enhancing the quality and efficiency of corporate governance. Addressing common compliance issues such as illegal guarantees, fund misappropriation, and excessively high pledge ratios, the SSE guides companies to continuously improve internal governance mechanisms that ensure all parties fulfill their responsibilities and maintain effective checks and balances. It emphasizes strengthening compliance awareness and training for "key individuals" like controlling shareholders, actual controllers, directors, and senior management, continuously improving the scientific and prudent nature of decision-making, fully maintaining the independence of listed companies, and effectively enhancing governance standards and normative operation capabilities.

Third is enhancing the quality and efficiency of information disclosure. Companies are guided to standardize information release mechanisms for non-statutory disclosure channels, guard against being actively or passively drawn into hype around hot concepts, and establish internal accountability mechanisms for disclosure errors. Companies are encouraged to diversify the forms of information disclosure, actively using methods like briefings, graphical reports, and short videos to continuously improve the readability and usefulness of disclosure documents.

Fourth is enhancing the quality and efficiency of investor returns. Companies are guided to reasonably increase dividend payout ratios and the frequency of cash dividends based on their capabilities, encouraged to actively implement share buybacks for cancellation and major shareholder share purchases, and to enrich investor communication formats such as earnings calls and "investor day" events.

Fifth is enhancing the quality and efficiency of social responsibility. Companies are encouraged to further improve the willingness and quality of ESG report disclosures, properly identify and analyze ESG-related issues, and objectively and truthfully reflect their practices and effectiveness in environmental, social, and governance aspects.

Notably, the SSE has simultaneously developed accompanying template documents for Shanghai-listed companies to reference when formulating their new action plans. Specifically, these templates focus on two main chapters: analysis of business conditions and management's discussion and analysis of the current status regarding "quality, efficiency, and returns." They guide companies to elaborate on their direction for improvement across dimensions like operational indicators, returns indicators, and compliance indicators, and to formulate more quantifiable, executable, and assessable measures. This aims to upgrade plan content from "qualitative description" to "quantitative discussion." The templates also include "helpful tips" for drafting relevant content, which is expected to significantly enhance the readability and effectiveness of the special campaign action plans.