Precisely Cracking the Development Challenges of Listed Companies

To promote high-quality development of listed companies, it is necessary to precisely address pain points and difficulties. Systematic measures should be implemented to improve the new ecosystem of “governance—returns—restructuring”—a three-in-one model for high-quality development—making development outcomes more sustainable and fully releasing development efficiency.

By 2025, A-share listed companies will demonstrate strong growth, with total market capitalization surpassing 123 trillion yuan. The average price-to-book ratio will increase from 3.3 at the beginning of the year to 4.4. Over 200 major asset reorganizations will be completed, and total cash dividends and buybacks for the year will reach 2.68 trillion yuan. This impressive performance reflects the confidence of A-share listed companies in development and solidifies the foundation for high-quality growth of China’s capital market. The China Securities Regulatory Commission’s 2026 systematic work conference proposed to “adhere to consolidating fundamentals and strengthening the foundation, promoting value growth and governance improvement of listed companies,” clearly outlining the path for further high-quality development in the new stage.

In 2025, A-share listed companies will achieve significant breakthroughs in three core areas: mergers and acquisitions (M&A), corporate governance, and shareholder returns, with development quality and market vitality improving in tandem. The M&A market will advance from “quantity increase” to “quality enhancement,” with 70% of targets focusing on strategic emerging industries such as semiconductors and new energy. Transaction structures will become more optimized, industry logic will dominate, and companies will actively deploy new productive forces. For example, the acquisition of ZTE Systems by Jingwei Huikai to develop dedicated networks for communication offers a reference for traditional enterprises seeking a “second growth curve.”

The level of corporate governance standardization will continue to improve. Regulators will introduce new governance regulations, revise the “Code of Corporate Governance for Listed Companies,” and publicly solicit opinions on the “Regulations on Supervision and Administration of Listed Companies,” strengthening constraints on key entities. According to the China Listed Companies Association’s performance evaluation, most companies have optimized the operation efficiency of the “three meetings” (board, supervisory committee, and general meeting), over 70% voluntarily disclose information, and 90% proactively expand the scope of operational disclosures, significantly enhancing endogenous governance motivation. The shareholder return system will be further refined, with total cash dividends and buybacks reaching a record high of 2.68 trillion yuan, making multiple dividends in a year a norm. Concrete measures to reward shareholders with real cash effectively boost market confidence, leading to a steady rise in overall A-share valuations. Public fund allocations to A-shares increased by 2.4 percentage points, accelerating the positive cycle of “returns—confidence—investment.”

However, behind these impressive achievements, deep-rooted issues remain in the development of A-share listed companies. Structural weaknesses in M&A, corporate governance, and shareholder returns need urgent solutions. Challenges such as valuation disagreements, integration difficulties, and blind cross-industry mergers result in an integration failure rate exceeding 20%. Innovation-driven enterprises face limited financing channels and insufficient long-term funds, with policy implementation and cross-departmental coordination needing strengthening. Corporate governance still shows formalism; many companies have been investigated for information disclosure violations, independent directors are underperforming, and issues like related-party fund occupation and illegal guarantees persist. Protection for small and medium investors also has gaps.

To promote high-quality development, targeted solutions must be implemented to address these pain points. A systematic approach should be adopted to improve the “governance—returns—restructuring” ecosystem, ensuring sustainable development and fully unleashing development potential. Support systems for M&A should be further refined, including detailed standards for “industry logic-based M&A,” establishing post-merger performance tracking mechanisms, and guiding companies to price rationally and focus on core business integration. Financing channels for tech innovation enterprises should be expanded, encouraging long-term funds such as insurance and pension funds to participate, and launching special M&A bonds to provide stable funding for technological acquisitions. Policy implementation details should be clarified, cross-departmental collaboration processes standardized, and mechanisms established to track policy execution and evaluate results, ensuring that policy benefits are accurately delivered to enterprises.

Deepening reforms and accelerating internal and external coordination are essential to build a new corporate governance paradigm centered on investors. Internally, listed companies should establish clear responsibilities and effective checks and balances, use equity incentives to align management and small shareholders’ interests, and address issues of dominant control. The recruitment of independent directors should be improved to enhance their professionalism, with clear responsibilities in information disclosure and strategic supervision. Externally, intermediary agencies such as auditors and law firms must be held accountable for misconduct, with lifetime accountability measures in place. The control rights market should be active, channels for small and medium investors to express their demands should be expanded, and collective litigation systems improved to increase transparency and targeted information disclosure. Long-term return mechanisms aligned with corporate development should be established, guiding companies to formulate differentiated dividend policies and disclose the basis and long-term plans for dividends. Companies that have not paid dividends for a long time but continue to raise funds should face higher financing thresholds and be required to disclose fund usage and profit expectations, strengthening market trust.

(Author: Tian Xuan, Professor at Peking University Boya, and Changjiang Scholar of the Ministry of Education. Source: Economic Daily)