Four government departments have issued a new policy on additional deductions for R&D expenses for industrial machine tools, with the Huaxia Machine Tool ETF (159663) rising 0.60% and constituent stock Dingtai High-Tech up more than 4%.

On the morning of April 3, during the early trading session, the three major A-share index trends diverged. The Shanghai Composite Index fell 0.40% at intraday lows; sectors such as communications, electronics, and non-bank financials were leading by gains, while agriculture, forestry, animal husbandry, and fishery, and public utilities were leading by declines. The machine tool sector strengthened. As of 9:50, the Huaxia Machine Tool ETF (159663.SZ) was up 0.60%, and among its constituent stocks, Dingtai Hi-Tech rose 4.54%, Huagong Technology rose 3.44%, Daheng Laser rose 2.35%, Yu Huan Numerical Control rose 2.33%, and Sinoway High-Tech rose 1.15%.

The Ministry of Industry and Information Technology, the National Development and Reform Commission, the Ministry of Finance, and the State Taxation Administration jointly released a policy. For qualified industrial mother-machine enterprises, R&D expenses will be eligible for a 120% pre-tax additional deduction (not resulting in intangible assets) and a 220% amortization (resulting in intangible assets). The policy also sets entry thresholds such as product high-endization, the share of R&D, and revenue scale, to promote breakthroughs in domestic high-end CNC systems and five-axis coordinated linkage machine tools. The policy adopts a “enjoy first, verify later” mechanism: for every 100 million yuan of R&D expenses invested, the enterprise can reduce taxes by about 5 million yuan, accelerating the process of survival of the fittest in the industry and advancing self-reliance and controllability.

Jianghai Securities said that downstream demand continues to be released, and machine tool output is growing steadily. With domestic economic conditions continuing to improve steadily, manufacturing enterprises’ demand for machine tools continues to be released. Against the backdrop of the resonance between this year’s national “15th Five-Year Plan” and the accelerated development of emerging industries, machine tool demand is expected to accelerate further.

Huaxia Machine Tool ETF (159663), which closely tracks the CSI Machine Tool Index, covers a key link in China’s manufacturing industry chain—the high-end equipment manufacturing sector. It involves industries such as laser equipment, machine tools, robots, and industrial control equipment. It is the core arena for implementing the new-productive-forces concept’s innovation-driven development and industrial upgrading in practice. Its off-exchange linked fund is: Class A: 017573; Class C: 017574.

Daily Economic News