Companies listed on China's "new third board," a financing platform for small and medium-sized enterprises (SMEs), have accelerated their innovation drive, with more firms upgraded to the board's innovation layer.

The National Equities Exchange and Quotations (NEEQ) said 226 companies transferred to the layer on Monday, enhancing the innovation momentum of SMEs.

The NEEQ innovation layer focuses on sci-tech innovation companies and has special thresholds for profits, revenue, and capitalization. Companies in the layer are considered reserves for the higher-level Beijing Stock Exchange.

More than half of the 226 companies reported net profits of over 30 million yuan (4.22 million U.S. dollars), 73 companies are identified as national innovative SMEs, and three are engaged in high-tech industries, such as genetic testing and new drug research and development.

This new batch of companies features characteristics such as high profitability and high growth, the NEEQ said.

The average operating income and net profit of these companies in 2023 were 407 million yuan and 40.18 million yuan, respectively, 54.17 percent and 300.21 percent higher than the reading for the entire board.

The NEEQ eyes these companies to help further improve the quality of the innovation layer, which currently owns over 2,000 companies, and promised greater support for the development of SMEs in the capital market.

Launched in 2013, the NEEQ offers SMEs a financing channel with low costs and simple listing procedures. In 2023, companies on the board raised 18.02 billion yuan mainly to replenish liquidity and pay back loans.

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