2017年-普华永道全球_MoneyTree™_China_TMT_Report_Q3Q4_2016_24页_3mb

MoneyTree™ China TMT Report Q3/Q4 2016 Summary

Core Content

This report provides an analysis of private equity and venture capital (PE/VC) investments and exits in the Telecommunications, Media and Technology (TMT) industry for Q3/Q4 2016, with comparisons to 2015 and 2014.

Main Findings

• Investment Trends:

  • PE/VC investment in the TMT industry declined in H2 2016 compared to H1 2016, but remained high.
  • Deal volume in H2 2016 reached a six-month high since 2012, with Q4 2016 recording 3,721 deals, a new single-quarter record.
  • TMT investments accounted for 52% of overall industry investment in 2016, with a significant portion of deal value concentrated in the Internet sector.

• Sector Analysis:

  • Internet was the most attractive sector, with both deal volume and value significantly higher than other sectors.
  • Technology followed closely, while Entertainment and Media overtook Telecommunications and Mobile to become the third-largest sector in terms of investment.
  • The Internet sector dominated the investment landscape in H2 2016, contributing 73% of total deal value in Q3 and 73% in Q4.

• Investment by Quarter:

  • Q3 2016:
    • Total deal volume: 927 deals, total investment value: US$17.11 billion.
    • Internet: 535 deals (58% of total), deal value: US$12.40 billion (73% of total).
    • Technology: 224 deals (24% of total), deal value: US$3.20 billion (19% of total).
    • Entertainment and Media: 108 deals (12% of total), deal value: US$913 million (5% of total).
    • Telecommunications and Mobile: 60 deals (6% of total), deal value: US$599 million (3% of total).
  • Q4 2016:
    • Total deal volume: 551 deals, total investment value: US$7.91 billion.
    • Internet: 301 deals (55% of total), deal value: US$5.79 billion (73% of total).
    • Technology: 153 deals (28% of total), deal value: US$1.09 billion (14% of total).
    • Entertainment and Media: 55 deals (10% of total), deal value: US$398 million (5% of total).
    • Telecommunications and Mobile: 42 deals (7% of total), deal value: US$640 million (8% of total).

• First-Round Funding:

  • In Q3 2016, 467 enterprises were at the early stage, accounting for 81% of first-round funding.
  • In Q4 2016, 187 enterprises were at the early stage, accounting for 75% of first-round funding.
  • First-round deal value in Q3 2016 was US$21.89 billion, while in Q4 it was US$10.18 billion.

• Investments by Stage of Development:

  • Early stage: Dominated deal volume in both Q3 and Q4, accounting for 65% and 51% respectively.
  • Expansion stage: Accounted for 25% of deal volume in Q3 and 35% in Q4.
  • Late stage: Accounted for 7% and 13% of deal volume in Q3 and Q4, respectively.
  • PIPE (Private Investment in Public Equity): Accounted for 3% in Q3 and 1% in Q4.
  • Deal value trends showed a significant drop in Q4 compared to Q3 for most stages, except for late-stage investments which saw a rise.

• Regional Analysis:

  • Beijing was the top region for both deal volume and value, with a dominant position in the TMT industry.
  • Shanghai and Shenzhen followed in terms of deal volume, while Zhejiang was second in terms of deal value due to one high-value deal.

• Exits:

  • IPOs became the principal form of capital exit, especially on A-share exchanges.
  • In Q3, IPOs accounted for 95% of total exit volume, while in Q4, they accounted for 60%.
  • Strategic sales declined significantly in H2 2016, but remained the second most common exit method.
  • There were no management buy-outs or secondary sales in H2 2016.

Key Trends

• The TMT industry remained robust and innovative, influencing other sectors and driving continuous progress.
• High valuations of unicorns in H1 2016 led to a decline in H2 2016, as investors became more cautious.
• The Internet sector continued to attract the most attention and investment due to the impact of "Internet Plus" on traditional and emerging industries.
• Regulatory expectations and the expansion of direct financing channels contributed to the growth of IPOs in H2 2016.
• Investments in the TMT industry were highly concentrated and polarized, with a significant portion of deal value coming from large deals.

Conclusion

The TMT industry in Q3/Q4 2016 showed a shift in investment dynamics, with a focus on early-stage ventures and a continued dominance of the Internet sector. Despite a decline in deal value, the industry remained a key driver of innovation and growth, with IPOs becoming the primary exit strategy for private investors.