Thorough changes are taking place in China’s PE industry following an explosive growth in 2011, as evidenced in the slowing pace of capital deployments by PE funds amid weakening secondary markets and fewer IPOs in the first two months of 2012. How can we continue to steer a steady course through choppy waters, and usher in a new wave of booms going forward? This is a question to be answered by each PE institution operating in China. The upcoming 2012 Annual Investment Conference，scheduled to be held on April 27, 2012 at Grand Hyatt Shanghai, may present some valuable help for your well-informed decisions. Apart from releasing the sixth set of VC/PE investment rankings from the conference organizer ChinaVenture, a leading financial information provider in China, at the grand event, survival logics, dynamics and trends for the Chinese VC/PE sector in a changing ecosystem will be discussed, and unique insights and enlightening opinions from renowned investors and gurus will be shared with participants.
E-commerce Continues to Present a Booming Prospect
Triggered by financial tightening measures, E-commerce investment waves have been ebbing down since the second half of 2011. Along with capital-strapped E-commerce market sliding into a chilly winter, investors once wild about the segment have already come back coolheaded, slowing down their investment paces or scaling back on their capital exposure in the sector. However, according to the 12th Five-year Development Plan for E-commerce, the overall turnover during the same period will double to more than RMB 18 trillion. This policy decision will, without doubt, give huge incentives to investment growth in the sector. As a result, despite cooling investment frenzy in the broad Internet industry, the E-commerce segment will continue to present a booming prospect in the near future.
According to the latest statistical data from ChinaVenture’s CVSource, 266 disclosed VC/PE deals in Internet in 2011 invested a total amount of USD 8.159 billion, posting a 44.6% and 218.5% rise respectively in deal number and deal size. Of which, 116 deals in E-commerce segment (including B2B, online shopping, online tourism booking, E-commerce services, and online searches) invested a total amount of USD 5.353 billion, making up 43.6% and 65.6% of their respective totals for the broad Internet sector.
With robust inherent vitalities and growing innovation capabilities, E-commerce has ushered in a new era of intensive innovations and rapid expansion. How should both entrepreneurs and investors adapt themselves to the ever-changing ecosystem, and make a balanced tradeoff between heightened risks and potential returns? Will a new wave of investment booms in E-commerce be just around the corner? When will the broad Internet market revive once again? How should we identify and take advantage of potential investment opportunities arising from policy incentives? Our honored guests and renowned investors will share their insights into these hot topics with you at the gathering.
Consumption Investments are Shifting to High-end Segments
A series of recent inbound acquisitions of local firms, such as Little Sheep, Tjoy, Povos Group, Yinlu Foods, Hsu Fu Chi and Global Education, showed that local consumption and related service sectors have drawn high attention and interest from PE investors seeking for quick financial gains, and presaged that PE investments has shifted away from traditional manufacturing to high-end service sectors.
The enthusiasm of investors towards Consumption sector intensified in 2011 and hit the all-time high in October, with the searches for consumption-related keywords during the second half of the year accounting for 27.3% of the total tally of keyword searches in CVSource. Another latest development is that Luxury Goods (including jewels and diamonds) has already emerged as the most interested segment by investors, with the searches for Luxury Goods-related keywords as a percentage of the total tally of keyword searches for Consumption sector in CVSource continuing to rise stably to 8.8% by now.
Growing consumption demands, highly fragmented markets, wide regional disparities, fickle customer behaviors, and ever-changing market dynamics – all these factors entail PE investors to make balanced tradeoffs, and build up their highly targeted investment portfolios. How to strike a balance among various conflicting factors? How to identify disparities among different regions and market segments, and come out with differentiation investment strategies? How to make your investment tactics highly responsive to market dynamics and evolutional trends? You may find answers to these questions at the upcoming investment conference.
Healthcare Emerges as a New Investment Hotspot
A confluence of various factors, such as rapid economic growth, aging population, and intensifying urbanization, has thrust the healthcare sector into the era of rapid growth. Unique attributes, such as being strong anti-cyclical, less vulnerable to economic fluctuations and low investment risks, guaranteed increasing appeals of medical service sector for PE investors, and deregulation policies have also released massive growth potentials in the underdeveloped sector. Along with the launch of new medical system reform initiatives, this sector is expected to become a new hot spot for PE investments.
According to the statistics from ChinaVenture’s CVSource, investments in healthcare sector experienced a sustained, rapid growth during the period of 2006-2010. 104 disclosed VC/PE deals in healthcare in 2011 invested a total amount of USD 1.91 billion, hitting record highs both in deal number and investment amount. By the end of the February of 2012, this sector has already emerged as the largest destination for VC/PE investments, grabbing as much as USD 278 million and making up 35.8% of the total annual investment for all sectors. However, promising prospect always goes hand in hand with intensifying competition in it. How should PE institutions tackle with changing market demands and compete in an increasingly crowded market? How should they avoid and respond to policy uncertainties? And how should they identify and adapt to changes to the medicine distribution patterns? In-depth discussion and unique insights from industry experts at the conference may help you better understand the market trends.
The 2012 Annual Investment Conference，hosted by ChinaVenture Group and scheduled to be held on April 27, 2012 at Grand Hyatt Shanghai, will bring together top-class investors and entrepreneurs to deliberate upon hottest topics in PE/VE industry. At the gathering, business elites and renowned PE professionals, including Mr. Xinjun Liang, CEO of Fosun, Mr. Andy Yan, Managing Partner of SAIF Partners, Mr. Xiangshuang Shan, Chairman & President of CSM, Mr. Zhanghong Hu, President of CCB International, and Mr. Hao Chen, Managing Director of Legend Capital, will exchanges their opinions, share their ideas and explore new trails for promoting PE/VC sector.
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