After going through last year’s cold winter for capital, the capital market moved forward in hesitation in 2019. In the spring of 2019, the launch of science and technology innovation board and the registration system brought some warmth to the market and the capital market showed sign of recovery. How to interpret the opportunities brought by science and technology innovation board? How to break the market predicament? On April 2nd, Approximate 500 ZSVC fund investors, shareholders, strategic cooperative institutions, and people from all walks of life, including government, universities, banks, securities, intermediaries, gathered together to discuss the new change of the capital market in 2019 on the ZSVC Entrepreneurship and Innovation Forum & 2019 Annual Fund Meeting held in Hangzhou .
Former Deputy Chairmen of Zhejiang Provincial Political Consultative Conference Hongming Zhang and Weiwen Zhang , the Deputy Mayor and the member of the standing committee of Hangzhou Municipal Party Committee Feng Yao, Party Secretary of Xihu District Committee Genming Zhang, the President of Zhejiang Tourism Group Jinghua Fang, the Vice President of Zhejiang University Weidong Luo, the Academician of Chinese Academy of Engineering and the Dean of the Medical College of Zhejiang University Zhihong Liu, the member of the standing committee of CPC Xihu District Committee and the Head of the United Front Work Department Yanghong Sheng, the President of China Everbright Bank Hangzhou Branch Guohua Zhang, the Executive Vice Chairman of Zhejiang Entrepreneurship and Risk Investment Guild and the former Deputy Director-general of Department of Science and Technology Feizhang Qiu, the Deputy Director of Financial and Economic Committee of Zhejiang Provincial Political Consultative Conference Chunxiao Wang, the Assistant to the President of China Zheshang Bank Hongqing Sheng , the President of Hangshi Group Li Shen, the President of CMBC Hangzhou Branch Jun Cong, the Deputy General Manager of Hangzhou Steel Group, the Vice President of Zhejiang Radio and Television Group Zhongming Feng, the Deputy General Manager of Zhejiang Provincial State-owned Capital Operation Corporation Wei Wang, the Deputy General Manager of Zhejiang Second Light Industrial Group Min Wu, the Chairman of Hangzhou Cixi Council for Economic Promotion Xinqiao Xu, the former Deputy Co-chairman of Zhejiang Democratic Provincial Construction Association Jifeng Guo, the President of Zhejiang University Holding Group Aiping Zheng, the Vice President of Bank of Hangzhou Feng Ding, the Vice President of ICBC Zhejiang Branch Yunbo Ruan, the Vice President of China Everbright Bank Hangzhou Branch Xuesong Wu, the President of Hangzhou Urban Construction Development Group Yanlin Zhao and other leaders and distinguished guests were present and gave instructions. ZSVC Chief Executive Officer Yeyu Hua and famous hostess of Dragon TV Chen Chen hosted the conference.
▲Picture: the scene of annual fund meeting
▲Picture: approximate 500 leaders and distinguished guests from all walks of life are present and give instructions
▲Picture: ZSVC Chief Executive Officer Yeyu Hua is delivering the welcome speech and introducing the distinguished guests in presence
▲Picture: famous hostess of Dragon TV Chen Chen
Time Proves Value, Equity Investment Is Entering New Golden Period
▲Picture: The Chairman of ZSVC Yuemeng Chen is delivering a speech
Mengyue Chen first addressed on behalf of ZSVC. He discussed with the distinguished guests in three respects, namely, “A Retrospect of China’s Equity Investment Market in 2018”, “Achievements and Deficiencies of ZSVC in 2018” and “Prospect and Expectation in Next Decade”.
Mengyue Chen said that 2018 was a special year for equity investment industry in China. It was an extreme tough year with many difficulties and was known as the cold winter for capital, or even darkest year of the industry. In 2018, China’s equity investment market had four characteristics: 1. most funds were stuck in the capital raising stage and were lacking of confidence in fund raising, most institutions had difficulties in “fund raising”; 2. The investment capital remained highly dynamic but was more clearly polarized; 3. the withdrawal channels were blocked, there was obvious inversion of prices of the primary and secondary markets, the number of overseas listed companies exceeded that of domestic listed companies; 4. There were both challenges and opportunities in policies.
Yuemeng Chen believed that although VC/PE market faced many difficulties in 2018, it was the inevitable stage of the industrial development. With continuous elimination of the inferior enterprises and the survival of superior enterprises, with gradual introduction of favorable policies and more intensified regulation, the market would be more standardized and improved and the industry would have greater opportunities for development. With the implementation of science and technology innovation board and relevant industrial policies, China’s equity investment market would develop towards a more standard and healthier direction.
Yuemeng Chen pointed out that ZSVC realized new leap-forward development in 2018 despite the overall situation was not optimistic. At the beginning of the year, ZSVC collaborated with China Zheshang Bank and Hangzhou Xiaoshan Industrial Fund to jointly establish Phoenix Action Special Fund. The actual paid-in capital in the first stage was 22.5 billion Yuan. It was the first paid-in fund for Zhejiang phoenix action as well as the largest RMB fund filed in domestic in 2018.
In 2018, ZSVC totally contacted thousands of projects, completed due diligence investigations for 102 projects and completed investment for 32 projects. The total investment amount this year was more than several times of the aggregate investment amount in the past 10 years. As always, we focused on four sectors, namely, new intelligent manufacturing, high technology, massive health and new consumption. The star project invested lasted year include Caocao Tailored Taxi Service, Hongruan Technologies, Taimei Technology, Qianmai Medical, Anheng Information, of which, Danghong Technology, Hongruan Technology had officially applied for listing in science and technology innovation board and had been accepted and was in disclosing stage. Anheng Information would officially apply for listing recently. The number of enterprises invested by ZSVC accounted for 3/7 of the number of the first batch application projects in Hangzhou.
In the context where it was difficult for both capital investment and withdrawal , we facilitated the successful listing of WEI in the United States, helped Taimei Technology and Miss Fresh to raise huge fund from world-renowned institutions. In 2018, the company coordinated to establish Zheshang Entrepreneur Association Equity Investment and M&A Committee. Yuemeng Chen was invited to be the first president of the committee. Relying on the communication through the platform, ZSVC and China Intime Group established Intime Health Industrial Group. In December 2018, ZSVC won the award of “China’s Top 20 VC Enterprises in 20 Years of VC Development” conferred by China Investment Association. Yuemeng Chen was appraised “China’s Top 20 VC Figures in 20 Years of VC Development” Qiandao Lake Closed Internal Training Conference put forward the guiding thought for the medium and long-term strategic guidelines and the investment strategy, “extensively hoard foods, refine projects, strengthen internal force, dare to investment, increase income”
▲Picture: ZSVC has made great achievement in new economy field again. WEI is listed at NYSE.
▲Picture: ZSVC Equity Investment and M&A Committee is being established, Yuemeng Chen is appointed the first Chairman of the committee
Yuemeng Chen finally stressed that: In Jan. 2019, the science and technology innovation board was born and there were good news for VC/PE from time to time. Under the complicate international environment and with upgraded supervision, China’s equity investment industry would enter the adjustment phase in the next decade, the market would return to value investment, and institutions would pay more attention to improving their risk control and post-investment management ability. We could say that equity investment industry had entered a new stage and had truly entered the golden period of development.
Themed Exchanges Were Valuable and Focused on Hot Issues of the Industry
Zhihong Liu, the Academician of Chinese Academy of Engineering and the dean of the Medical College of Zhejiang University delivered a keynote speech on “Scientific and Technological Progress and Human Health”. According to Zhihong Liu, a healthy China was indispensable of the support of science and technology. In the future, medicine would be further combined with science and technology and a perfect disease prevention and treatment mode would be established. Especially, artificial intelligence would play a more important role. With the help of artificial intelligence, holographic data would be drawn through efficient medical means and big data and cloud technology would be fully used to serve human health.
▲Picture: Zhihong Liu, the Academician of Chinese Academy of Engineering, and the Dean of Medical College of Zhejiang University
“Unicorn”, a buzzword in the capital market, has become a bellwether for the capital investment. Hui Meng, the Managing Director of Credit Suisse, delivered a keynote speech titled “On Chinese Unicorn and Direction of Future Development from Perspective of Investment Banks”. He pointed out that: Chinese Unicorn enterprise were mainly driven by innovation in business models instead of high technology. The innovation of business mode was to take advantage of China’s highly segmented and rapidly growing retail market. In contrast, a considerable number of unicorn enterprises in the united came into being in the fields that required higher scientific research strength. China needed to increase investment in basic research to catch up with the pace of global scientific and technological progress. In the future, China’s unicorns were likely to come from five industries, namely, automobile industry, finatech industry, healthcare industry, internet industry and technology category of hardware industry. Investment banks should pay more attention to these industries.
▲Picture: Hui Meng, the Managing Director of Credit Suisse
With regard to how could unicorn enterprises get out of predicaments and look for opportunities in the cold winter, the President of WEI Mr. Feng Chen, Pan Shi’s Founder and Board Chairman Mr. Ning Tian, the board chairman of CCG Huimin Mr. Yichun Zhang, the Board Chairman and CEO of Taimei Technology Mr. Lu Zhao, the President of Tongdun Technology Mr. Tao Jiang had a round table discussion with the theme “Unicorns Traversing in Cold Winter”. The participants agreed that innovation was an important mean for enterprises to achieve new development at a time when industry regulation was gradually becoming standardized and strict. Enterprises needed to constantly look for new business models and explore new business paths. Although unicorn enterprise exist in different industries, they could make new breakthroughs in the severe competition as long as they focused on their own fields, actively embraced scientific and technological innovation, boldly accepted new ideas, new modes and new directions.
▲Picture: Round table discussion on “Unicorns Traversing in Cold Winter”
Interpret Science and Technology Innovation Board, Is Spring of Science and Technology Enterprises Coming?
The science and technology innovation board had drawn wide attention since it was launched. How would science and technology innovation board affect the capital market? Yi Li, the Director of STE Listing Center Market Service Area, discussed with everyone on the theme “Positioning of Science and Technology Innovation Board and Policy Interpretation” and made detailed introduction of the science and technology innovation board and the registration system.
▲Picture: Yi Li, SSE Listing Center Market Service Area, is introducing the science and technology innovation board
Yi Li pointed out that the core starting point of the science and technology innovation board was science and technology innovation. The positioning of science and technology innovation is involved in the whole process from issuance examination, continuous supervision, refinancing, M&A and reorganization and delisting. Six high-tech and strategic emerging industries, such as new generation information technology, high-end equipment, new materials, new energy, energy conservation and environmental protection and biomedicine, were the key supported industries by the science and technology innovation board.
Yi Li stressed that science and technology innovation board had an important mission, that was to improve the capacity for serving science and technology innovation, promote high-quality development of economy, support the construction of Shanghai International Financial Center and Science and Technology Center, facilitate the interactive development of two centers, improve multi-level capital market system, accumulate experience for steadily advancing the basic institutional improvement of the capital market.
In general, the science and technology innovation board would adhere to the principles of issuance review and registration system, issuance pricing marketization, listing standards diversification, trading mechanism differentiation, more targeted continuous supervision and strict delisting system. Director Yi Li also introduced in detail the basic situation of the registration system , as well as the registration and examination procedures, listing conditions, issuance pricing and placement, transaction conditions, SSE listing service systems of the science and technology innovation board.
Finally, the Member of the Standing Committee of CPC Hangzhou Municipal Committee and the Deputy Mayor Feng Yao made a summing-up speech. Feng Yao pointed out that ZSVC achieved a good performance in the past year and had effectively advanced the listing of enterprises on science and technology innovation board. 2 enterprises have been accepted for listing on the science and technology innovation board. This fully indicated that ZSVC had unique insight in investment. In the future, Hangzhou should avail the opportunities of the science and technology innovation to transform and upgrade science and technology enterprises, improve high-quality development of Hangzhou economy. He also hoped that ZSVC could take initiative to facilitate the transformation and upgrading of Hangzhou’s Economy.
▲Picture: Feng Yao, the Deputy Mayor and the Member of the Standing Committee of CPC Hangzhou Municipal Committee, is making a summing-up speech
The annual fund meeting intensively displayed that ZSVC closely followed hot issues of the industry, strengthened exchanges with various parties and adhered to the target of realizing “five-win” development. It also provided a good opportunities for interactive communications between the shareholders, partners and investors. The sparks of thoughts on the meeting would ignite the passion of more people for innovation. It was believed that with the launch of the science and technology innovation board and the registration system, the capital market would recover gradually. The spring breeze of equity investment would definitely benefit the development in the next decade. In 2019, ZSVC is willing to make joint efforts with all of you to discover value, create value, witness glory and co-witness the new era.
▲Picture: All senior executives of ZSVC are proposing a toast on the stage.