Deloitte: 80% PE Investors expect China's investment activities to rise

October 14 News, Deloitte's latest "China Private equity investment confidence survey" shows that investors are quite bullish on the Chinese Private Equity Fund (PE) market, and 79% of respondents are more expected in the next 12 months, investment activity will rise.　　High market confidence, mainly from a variety of factors, including economic growth, open market recovery, domestic renminbi funds, and PE as a source of financing of the increasing number of enterprises. "All factors point to a good outlook for China's PE market," said Goob, a partner in private equity services at Deloitte China North. The market began to recover from the recession, stock market sentiment has improved, and the IPO activity rebounded, which is one of the effective ways to exit PE. If the economy continues to recover, investment activity will rise from now to 2011, and the size and value of the deal will rise. "In terms of the type of transaction, 91% per cent said that" development capital "would remain the preferred option for the next 12 months, reflecting the continued growth of many Chinese companies and the need for capital to support business expansion. On the contrary, the popularity of "pre-IPO (IPO) investment" (21%) and "Post-IPO" (PIPE) (3%) has waned in this year's survey, given the cautious approach of open markets. Respondents were not optimistic about whether the buyout would increase in the coming year.　　While economic growth may have boosted trading volumes from their current lows, respondents remain concerned that business owners will be reluctant to sell their businesses, while regulatory restrictions will affect the growth prospects of mergers and acquisitions. Despite the market's confidence in China's PE markets, only a majority of respondents (52% per cent) expect the size of the deal to expand, backed by abundant capital, a sought-after takeover and continued privatisation of state-owned enterprises. In terms of industry, 27% per cent of respondents believe that the consumer/retail trade activity will be the most frequent in the next 12 months, followed by the Power/energy/Mining Industry (16%) and the pharmaceutical/biotechnology/Health sector (15%). In addition to the expected more active trading activities in the financial services industry, respondents ' interest in various sectors was generally consistent with the Government's preference for FDI and private investment, and there was no significant difference from last year's findings.　　Geographically, respondents believe that PE activities will be expanded from a first-tier city, while two, three-tier cities since the beginning of last year's popularity increased greatly. Tang Yinguang, a partner at Deloitte China's private equity service, said that as China's PE market matures, investment activity is likely to penetrate the two or three-line cities of the non-coastal inland areas even more, including some of the western hinterland. "With the increase in the number of local or renminbi funds and new foreign funds, the trend has led 82% of respondents to believe that trading competition in the mainland market will be fierce," he said. "The survey showed that 58% of respondents expected the valuation ratio to remain unchanged this year." Since the recession, corporate valuations have risen quite a bit, and price forecasts will be closer to reality. Similarly, most respondents (61%) expectedThe return on PE will be flat in the next 12 months, as some public market growth forecasts appear to be divorced from reality and continued macro uncertainties.　　In addition, the impact of competition from renminbi funds will also make the exit income flat. Exit activity is an important part of PE investment cycle. 76% of respondents believe that due to the health of supply and demand, the next 12 months, the Chinese PE market will be an increase in the withdrawal activities. In addition, the launch of the gem and the growing maturity of the investment company will drive the Chinese market exit activities. (Ann is from Shanghai)