2017-投资界电子周刊No0603-英文版_11页_1mb

PEdaily E-Magazine Issue No. 603 Summary

Core Content

PEdaily E-Magazine is a weekly publication focused on the private equity (PE) and venture capital (VC) industry in China. It was previously known as Zero2ipo e-Weekly, which was first published in 2006. The magazine serves as a valuable resource for industry insiders, including investors, entrepreneurs, analysts, and lawyers, by providing timely, accurate, and in-depth market reports. It integrates over 10 years of research resources from the Zero2IPO Group and aims to build a professional platform with abundant data and analysis.

Main Points

• IPO Restrictions and M&A Trends: Since the second half of 2012, the restrictions on the IPO pre-announcement system, IPO appraisal conference, and IPO approval have increased. This has led to a surge in mergers and acquisitions (M&A) across various industries in China. The clean energy sector has been particularly affected, with no successful IPO deals as of October 2013, but a significant number of M&A transactions totaling over US$5.80 billion.

• Government-led Angel Fund in Yangzhou: A government-led angel fund with an initial size of RMB30 million was established in Yangzhou. It prioritizes high-level entrepreneurial projects and limits venture capital investment in a single project to no more than 30% of the fund’s capital, with a maximum investment amount of RMB6 million.

• 500.com IPO Update: 500.com updated its IPO prospectus on November 21, 2013, raising the issue price range from US$9–11 to US$11–13. Using the midpoint of the new range, the issue price increased by over 20%, and the total fund raised would amount to US$86.5 million.

• Alibaba's Acquisition of Umeng: On November 19, 2013, Alibaba completed the acquisition of Umeng. China Renaissance acted as the sole financial advisor for Umeng, utilizing its expertise in the TMT industry to facilitate the deal.

• Tofflon's Strategic Acquisitions: Tofflon, a company primarily involved in medical lyophilizers and freeze-drying systems, announced the acquisition of Jianzhong Medical. The deal involved purchasing 4 million shares for less than RMB20 million, resulting in Tofflon holding over 20% of Jianzhong Medical's shares after the transaction.

• Wanda Group's Acquisition of Yaxiya: Wanda Group acquired Jiangxi Yaxiya International Travel Service. The acquisition was announced on November 13, with the signing ceremony taking place on November 18. This move is seen as a strategic response to the restrictions imposed by the Travel Law and the competitive pressure from travel websites, aiming to integrate traditional travel agencies into the industry.

Key Information

• IPO Restrictions: These have driven a shift towards M&A activity in the Chinese market, especially in the clean energy sector.
• Government Involvement: The establishment of a government-led angel fund in Yangzhou indicates increasing public sector involvement in supporting early-stage ventures.
• IPO Price Adjustments: 500.com’s updated IPO prospectus reflects a strategic adjustment in pricing, potentially increasing the fund raised.
• Strategic Acquisitions: Companies like Alibaba, Tofflon, and Wanda are actively acquiring firms to strengthen their market positions and adapt to regulatory and competitive changes.
• Industry Integration: The trend of acquiring traditional travel agencies is part of a broader effort to integrate offline services with digital platforms, enhancing operational efficiency and cost performance.

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Conclusion

This issue of PEdaily E-Magazine highlights the evolving landscape of the Chinese PE/VC industry, emphasizing the impact of regulatory changes on M&A activity, the role of government in funding early-stage ventures, and the strategic acquisitions by major players. These developments reflect a dynamic market environment where traditional and digital sectors are increasingly converging.