How to guide and support the healthy development of the private economy and stimulate the vitality of private enterprises is an important issue in the process of economic transformation and upgrading in China. Taking the mixed ownership reform of private enterprises as the research perspective, we selected a sample of private listed companies on the SME board from 2009 to 2019 to focus on the impact of state owned equity participation on the transformation of SMEs into “specialized and new” enterprises. The empirical study shows that state owned equity participation significantly contributes to the transformation of private SMEs into “specialized and new” enterprises, and that this effect is brought into full play by breaking the constraints of financing channels, institutional system and talent system. Further research found that the positive relationship between the two was more pronounced when the industry was high tech and the level of marketisation was low. This finding remains robust to Heckmans two stage, equity change and other robustness tests. The above study is conducive to a comprehensive understanding of the economic consequences of mixed ownership reforms in private enterprises, and provides new research perspectives and empirical evidence to promote the transformation of SMEs into “specialized and new” enterprises and high quality economic development.