(Source: China Securities Journal) Accelerating the construction of 5G, data centers and other new infrastructures has become an important priority for the transformation and development of some listed companies. Recently, NPC deputies and CPPCC members representing listed companies said in an interview with China Securities Journal that listed companies should seize the opportunity of new infrastructure construction, strengthen technology research and development, accelerate digital, intelligent transformation, and boost the internal drivers of high-quality development.

Seize the opportunities of new infrastructure construction

The NPC deputies and CPPCC members said that new infrastructure construction could play a big role in promoting the transformation and upgrading of the industrial chain, and bring significant opportunities for high-quality development; it was therefore important to seize the opportunities to promote business transformation and upgrade.

Accelerating the digital transformation in light of the requirements of new infrastructure development. For example, the first power plant intelligent upgrade of Dong Fang Electric was successfully launched not long ago. "No matter it’s the new infrastructure or the old infrastructure, none can go without electrical power, and the manufacturing of power equipment is infrastructure construction at the fundamental level," said Zou Lei, Member of the CPPCC National Committee and Chairman of Dong Fang Electric. He said that riding on the trend of new infrastructure construction, Dong Fang Electric would follow the established direction of digital transformation and focus on two priorities: taking the opportunities of digital and intelligent transformation, and seizing the market opportunities of new infrastructure construction.

As a leading company in the fiber-optic communications industry, HengTong Group is also looking for breakthroughs related to new infrastructure. "By laying out plans for new infrastructure construction, we are actively seeking new breakthroughs and focusing more on the construction related to new infrastructure," said Cui Genliang, Deputy to the National People's Congress and Chairman of HengTong Group. He said the company would focus on construction of communication networks and energy interconnection.

Against the backdrop of renewed demand and new infrastructure development, 3TREES is also thinking about how to seize the opportunities. "The development and application of artificial intelligence, industrial internet and big data centers in new infrastructure projects brings huge opportunities to the company. Smart manufacturing, smart parks, smart construction, smart whole-house customization and smart offices will profoundly change 3TREES's business management model," said Hong Jie, Deputy to the National People's Congress and Chairman and President of 3TREES.

Embracing the market to enhance new drivers

The NPC deputies and CPPCC members believed that whether it was to achieve digital and intelligent transformation by strengthening research and development, or to strengthen the development of new infrastructure such as 5G, there was a big role for the capital market to play. Listed companies could make full use of the capital market and strengthen the new drivers for development by expanding financing channels, strengthening corporate governance, conducting mergers and acquisitions and through other means.

"Capital is an important part of 3TREES's 'four-wheel drive'. Through the bond of capital, we have transitioned our business from product operations to industrial and capital operations. With a successful IPO on the A-share market, 3TREES is the first domestic company of civilian coatings products to issue stocks. As a listed company, we can access funds through more channels. Financing becomes easier and less costly, which gives us better conditions to achieve high-speed and high-quality development. Our sales revenue and net profit increased by about four times last year compared to before IPO," Hong Jie said.

In addition to financing support, leveraging the capital market to promote team building and giving employees equity incentives are also important means for listed companies to gather cohesive force for development.

"Our company had introduced stock ownership for employees many years ago. Shanghai Construction Group (SCG) has built an incentive mechanism covering four levels, i.e. all employees, key employees, key backbone employees and professional managers. The company's professional managers and leading cadres must abide by clear shareholding requirements. For example, 30 percent of a professional manager's income will be used to increase the holding of the company's shares, and the company's leaders are required to take out 20 percent of their income to increase the holding of the company's shares, in addition to the shareholding requirement for key backbone employees," said Xu Zheng, Deputy to the National People's Congress and Chairman of SCG.

At the same time, the capital market provides listed companies with development opportunities such as strengthening corporate governance and achieving outward expansion. "Over the past 17 years since our IPO, the company's core competitiveness, comprehensive strength, industry position and international influence have rapidly improved. The success of the independent development and production of optical fiber precast rods and the breakthroughs, industrial technology upgrades and product structure adjustments in many other key fields have all been achieved with the assistance of the capital market, and the completion of these projects will further promote the company's leap from a parallel runner to a lead runner in the global industry," said Cui Genliang.

Strengthening research and development to seek new breakthroughs

The NPC deputies and CPPCC members believed that new infrastructure construction would give a significant boost to the building of digital China and the digital economy, and listed companies should leverage their strengths to promote new infrastructure construction and seek new breakthroughs by harnessing the power of technology.

"To create higher value for users, improve quality and reduce costs, and find breakthroughs and new opportunities for product upgrades and industrial development, Dong Fang Electric has actively pushed for digital and intelligent transformation with a focus on comprehensive and collaborative innovation," said Zou Lei.

Recently, Dong Fang Electric has taken a series of actions to promote collaborative innovation in the digital field, including signing comprehensive strategic cooperation agreements with Huawei, Nokia Bell and other well-known enterprises, making breakthroughs in key and core technologies with the University of Electronic Science and Technology of China, and accelerating the "digital empowerment of manufacturing".

Hong Jie pointed out that the company would look at the present from the perspective of the next 5 or 10 years and make plans for new infrastructure development in advance, so as to occupy the "fast lane" of the next golden period of development.

SCG is also further promoting scientific and technological innovation. "Scientific and technological innovation is the key competitiveness of a growing company, and in recent years, we have continued to step up investment in this field," said Xu Zheng. He remarked that SCG had also increased investment in scientific research in the fields of urban renewal, environmental management, architectural 3D printing, and operation and maintenance of construction facilities and equipment, which had not only greatly promoted the development of the industry, but also generated new sources of profits.

"In terms of working environment and incentive mechanism, SCG has established two levels of R&D institutions, and invested 6.2 billion yuan in scientific research in 2019. To give professionals with outstanding performance more incentives, we have introduced a series of stimulus measures in recent years, including the construction of talent apartments," said Xu Zheng.