2012-中国创投暨私募股权投资市场2012年第一季度数据回顾--英文版_68页_4mb

China VC/PE Market Review Q1 2012 Summary

Overview of China's VC/PE Market

The VC/PE market in China experienced a downturn in Q1 2012, marked by a significant drop in fundraising, investments, and exits. The market was influenced by a sluggish global economy and pessimism regarding investment exits, leading to a more cautious approach by investors and institutions.

VC Market in Q1 2012

• Fundraising: A total of 29 VC funds were raised, a 66.7% year-on-year decline, with only US$958M raised, an 83.8% drop from the previous year.
• Fundraising Trends:
  • RMB funds accounted for the majority of fundraising, with 28 RMB funds raising US$758M, a 65.9% decline in the number of funds and 85.2% in fundraising amount.
  • Only one USD fund was closed, raising US$200M, a 80.0% year-on-year decrease.
• Investments:
  • Total investment deals were 168, a 54.2% year-on-year decline.
  • Investment amount reached US$870M, a 75.3% year-on-year drop.
• Investment Distribution:
  • Internet sector led in investment deals, while energy and mineral sector saw the highest investment amount.
  • Beijing was the top region for both the number of deals and investment amount.
• Investment Stage:
  • Early-stage investments accounted for 20.0% of the total investment deals.

PE Market in Q1 2012

• Fundraising:
  • 28 new PE funds were closed, down 20.0% quarter-on-quarter and 36.4% year-on-year.
  • Total fundraising amounted to US$2.95B, less than a fourth of Q1 2011's amount.
• Fundraising Trends:
  • RMB funds raised US$2.41B, a 32.4% drop from Q4 2011.
  • Foreign currency funds saw a 50.0% year-on-year decline, with only US$532M raised.
• Investments:
  • Total PE investment deals were 110, down 29.5% quarter-on-quarter and 26.7% year-on-year.
  • Total investment amount was US$2.59B, a 61.0% drop quarter-on-quarter and 44.1% year-on-year.
• Investment Distribution:
  • Energy and mineral sector dominated with the highest number of deals and investment amount.
  • RMB funds outperformed USD funds in both the number and amount of investments.
• Geographical Distribution:
  • Shanghai overtook Beijing in the number of PE investment deals, while Beijing remained the top in investment amount.

M&A Market in Q1 2012

• Activity Levels:
  • Total M&A deals were 204, with a 12.1% year-on-year decline in the number of deals and transaction value.
  • Energy and mineral industry led in the number of M&A deals, while the value was distributed across various sectors.
• Deal Types:
  • Domestic M&A remained brisk, while cross-border M&A had a higher transaction value.
• VC/PE-backed M&A:
  • 42 deals were VC/PE-backed, with energy and mineral leading in the number of deals and value.

Chinese IPOs in Q1 2012

• IPO Activity:
  • A total of 118 Chinese enterprises were listed worldwide, with Chinese IPOs accounting for 50.8% of the total.
  • ChiNext was the primary exchange for domestic IPOs, hosting 49 deals with a total financing amount of US$5,659.34M.
• Sector Breakdown:
  • Machinery manufacturing was the top sector for domestic IPOs, with 10 deals and US$1,220.19M in financing.
  • Energy and mineral was the top sector for overseas IPOs, with US$237.63M raised.
• IPO Performance:
  • Domestic IPOs had a higher average ROI compared to overseas ones.
  • VC/PE-backed IPOs saw a slowdown in both number and financing amount.

Market Change Analysis & Zero2IPO Insights

VC/PE Policies

• Regulatory Developments:
  • The NDRC issued the Circular on Promoting the Sound Development of Equity Investment Enterprises, aiming to standardize the market and reduce disorders like illegal fundraising.
  • The Circular introduced compulsory filing for PE institutions and expanded the filing scope to a national level.
  • It also emphasized the need for stricter information disclosure and higher thresholds for accredited investors.
• Financial Reform in Wenzhou:
  • The State Council approved the establishment of the Comprehensive Financial Reform Pilot Area in Wenzhou.
  • The program focused on guiding private capital to establish VC/PE firms and management institutions, encouraging direct overseas investment by individuals, and developing local financial markets.
  • Wenzhou aimed to attract outstanding PE funds and set up guidance funds for efficient government investment.

Market Trends

• Fundraising: Both VC and PE fundraising saw a significant decline, with VC fundraising reaching a record low since 2009.
• Investments: The VC/PE market faced challenges due to fierce competition and cautious investor behavior, leading to a drop in investment numbers and amounts.
• Exits: VC/PE-backed exits slowed down by 12.1% year-on-year, with 65 exits recorded, and IPOs were the primary exit option.
• Market Dynamics: The VC/PE market was influenced by global economic conditions and domestic regulatory changes, leading to a more prudent investment climate.

Key Observations

• Sector Focus: Energy and mineral, machinery manufacturing, and construction/engineering were the top sectors for both investments and M&A activity.
• Geographical Focus: Beijing and Shanghai were the top regions for VC and PE investments, with a shift in PE activity from Beijing to Shanghai.
• IPO Performance: Domestic IPOs were more active and had a better ROI compared to overseas IPOs, with ChiNext being the most popular exchange for domestic listings.

The overall market environment was characterized by caution and regulation, with a focus on improving transparency and reducing administrative burdens. Despite the downturn, the VC/PE market remained a crucial driver for economic development and industrial upgrading in China.