On September 27, 2022, the first New Investment Expo and the 16th Frost & Sullivan Global Growth, Innovation and Leadership Summit (hereinafter referred to as 'the Conference') were held at the Shanghai International Convention Center. This year's Conference was organized by Frost & Sullivan (Frost &Frost & Sullivan, abbreviated as 'Frost & Sullivan', co-hosted with LeadLeo and jointly organized by Titanium Media, Roadshow China, and Huajun Media Group.
In 2021, the global IPO market experienced fluctuations and was destined to be a year that will be remembered in history. This year saw the 'de-Sino Coship' trend in US stocks, the 'boom' of Hong Kong listings, and a major year for A-share IPOs. Corporate IPOs are also an important reflection of VC/PE's investment capabilities and exit strategies. In 2021, which VC/PE firm will become the champion in acquiring the most IPO companies?
Against this backdrop, Frost & Sullivan, in collaboration with Titanium Media, has extended an invitation to all active and outstanding domestic investment institutions to jointly launch the 'China Private Equity FundData collection for the IPO Champions 2021 report.
On September 27th, at the main conference forum, Frost & Sullivan, in collaboration with Titanium Media, released Chinese private equity fundIPO report card 」, from Founder of Titanium Media GroupMs. Zhao Hejuan, CEO, delivered a keynote speech and released the list .
Founder of Titanium Media GroupMs. Zhao Hejuan, CEO
Ms. Zhao Hejuan said, Half of 2022 has already passed, and the most personal word of the year should be 'uncertainty'. The global macroeconomy is in a great state of uncertainty, ambiguity, and instability, posing unprecedented challenges to global investors. Starting with this 'great upheaval' of uncertainty may also be the starting point for the next decade.
This strategic collaboration with Frost & Sullivan and LeadLeo is not only a long-cherished wish of both parties but also a powerful combination that complements each other's strengths in terms of companies and brands. It is certain that this collaboration will elevate both parties to new heights in the industry, creating more tangible value for participants in the primary and secondary markets in a deeper, more comprehensive, and digitalized manner.
Founder of Titanium Media GroupMs. Zhao Hejuan, CEO
Ms. Zhao Hejuan pointed out,IPO exit has always been the most important exit route for private equity funds in the primary market. However, since last year, this exit path has become increasingly confusing.
First,Changes in the IPO channel. In 2021, Chinese companies listed overseas were affected by Sino-US regulatory policies, leading to a significant reduction in the number of companies seeking to go public in the US. After August last year, the listing process for Chinese companies in the US almost came to a halt, and some listed companies began to delist gradually. Nasdaq and the New York Stock Exchange, once sought after by capital and entrepreneurs, suddenly closed their doors to Chinese companies overnight. However, the rapidly shrinking IPO channel for going public in the US has brought unprecedented new opportunities to both the Hong Kong Stock Exchange and the A-share market.
Companies that have been delisted from the US stock market are considering going public again on the Hong Kong or domestic markets, which has directly led to a surge in Hong Kong listings. At the same time, the Hong Kong Stock Exchange is actively promoting reform measures, simplifying the issuer listing structure, and has accepted companies returning to Hong Kong for secondary listings from the US stock market.In December 2021, the SPAC listing system was introduced to attract more enterprises to list on the Hong Kong Stock Exchange.
On the other hand, Ms. Zhao Hejuan also said,Against the backdrop of multi-level capital market reform and the continuous advancement of the full registration-based system, the listing of Chinese enterprises supported by VC/PE funds within China has become mainstream. The Sci-tech Innovation Board and Growth Enterprise Market have become the 'main battlefields' for corporate listings. At the same time, the establishment of the Beijing Stock Exchange has also broadened financing channels for 'specialized, refined, distinctive and innovative' enterprises, improving the capital market at multiple levels. The level of listing activity has continued to rise, and the number of IPOs has set a new record high since 2000. In the first half of this year, the number of A-share IPOs accounted for as high as 94.0% of the total number of IPOs by Chinese enterprises, creating favorable conditions for the exit of VC/PE funds.
The A-share listing boom has been a frenzy for RMB funds, but it has also brought new challenges to US dollar funds. Whether it is necessary to re-evaluate investment and exit strategies has become a new issue that requires consideration.
Second, the change in return levels has seen a steady increase in the domestic return multiple, which has even outpaced that of overseas markets. Ms. Zhao Hejuan pointed out that due to factors such as the obstruction of listing in the US and the correction of Hong Kong stock valuations,In the first half of 2022, the average book-to-market multiple (at issue price) for overseas listings of VC/PE-backed companies was 2.1, showing a continuous downward trend; in contrast, domestically, the average book-to-market multiple (at issue price) for corporate listings reached 5.87 times, far exceeding that overseas. Among them, the Sci-tech Innovation Board and the Growth Enterprise Market are classified by issuance date, first day, andThe book return multiple calculated on the 20th was above 6 times, outperforming other sectors.
Third, changes to the track,"Specializing in niche areas, investing early-stage and small-cap tech companies" has been the main theme of VC/PE institutions' investments in the past two years. According to statistics from Titanium Media, in 2021, approximately 284 "niche specialty" giant enterprises received investments at various stages, distributed across vertical fields such as new energy, semiconductor chips, high-end manufacturing, and biomedicine. Among them, there were a total of 11 giant enterprises with total investments exceeding $100 million. Many institutions have also publicly stated that they will invest in whatever the country needs, which aligns with the national economic planning and has driven the steady development of China's innovative economy.
Looking ahead, there may still be uncertainties, but Ms. Zhao Hejuan also stated that the fundamentals of China's economy, which are strong, full of potential, and long-term positive, remain unchanged. At this moment,VC/PE institutions are seizing a great opportunity to cultivate their 'internal strength' as a testament to their future potential. By deeply rooted in industry research and adhering to the fundamental principles of value, they engage in long-term exploration to accompany high-quality unicorn companies on their listing journey, ultimately achieving clarity and insight.
According to Ms. Zhao Hejuan, 'China's Private Equity FundThe data for 'IPO Scorecard' mainly relies on the Kechuangbao and TMTBase databases under Titanium Media. Through various methods such as self-registration, desktop surveys, questionnaires, interviews, and phone calls, cross-validation is conducted to ensure that data is used as the primary criterion for selection.
The report card includes the annualTop 10 investment institutions in A-share IPOs, Top 10 investment institutions in Hong Kong stock IPOs, Top 10 investment institutions in US stock IPOs, Top 10 investment institutions with the largest IPO market value, as well as the top 5 investment institutions in the four sub-sectors of new retail, TMT, healthcare, and industrial manufacturing for IPO champions.
The following is the list details:
Mr. Wang Chenhui, Managing Partner and Executive Vice President of Frost & Sullivan Greater China, Co-founder and President of LeadLeo, said,In 2021, with the continuous recovery of China's macroeconomy, as well as favorable factors such as the establishment of the Beijing Stock Exchange and the steady progress of registration-based reforms, the private equity investment market gradually warmed up, with significant increases in both the number of investments and the amount invested.
Mr. Wang Chenhui pointed out, from the invested enterprisesIn terms of IPOs, institutions such as Sequoia China, Hillhouse Capital Group, CICC Capital, and Dacheng Capital Intelligence have performed outstandingly in both the A-share market, Hong Kong stock market, and US stock market. SAP China in Retail and Consumer,In areas such as TMT, it has made prominent investments in multiple tracks including logistics and the crypto market. GCLP has also shown outstanding performance in the healthcare sector, favoring sub-sectors such as CROs, in vitro diagnostics, and innovative drugs.
Today, private equity investment in China is booming and has become an important part of China's financial ecosystem. In the future, it will continue to inject impetus into the development of various industries.
