Chinese business-to-business industry is the most capital-intensive year

The 2014 Chinese business-to-business industry was the most capital-intensive year, Alibaba acquisition of a 100% equity, HC Network to the main board listing, Marco Polo net by the South China city Tencent Investment, Shanghai steel Joint expansion of steel UMC business, the industry has a large and small variety of mergers and acquisitions, showing the industry reshuffle, consolidation has begun, The best time to invest in business-to-business may be coming. However, the above incidents occurred in the industry, investment institutions in this category B Capital Carnival, what opportunities, Toby net for everyone to comb, from the B-class investment threshold, investment prospects and industry, the opportunity to subdivide three aspects of the discussion.

Investment in class B needs to cross many thresholds

An indisputable fact is that type B investment is not active at the moment, mainly because there are many thresholds for type B investment, which involves the investment concept of investment institutions/investors, the lack of awareness and input on the Internet by industry users, and the seemingly unprofitable market for the main platform of the industry, and so on.

First look at investment institutions, investors. For Class B projects, investors are more or less evasive, and the investment cycle and the P/E ratio are two karez:

Long Investment cycle

and C-class enterprises are different from the fiery investment, B-class enterprises are often regarded as a long investment cycle, the exit method is limited, in the domestic through the IPO exit near wishful thinking. At the same time, the C-Class enterprise investment development is very rapid, product evolution Rapid iteration, investment is also a rapid iteration. Angels, A-round, B-round, C-round, investment institutions participate enthusiastically, and ultimately maximize the benefits of the IPO. However, the section B is the core city three years to complete the listing, so many investment institutions silly eyes.

P/E is inferior to Class C

The embarrassment on the P/E ratio underscores investors ' overall view of the domestic B-class market. This is ironic-p/E ratios, corporate valuations are all about the future, and B-class companies that have been profitable for years still seem to have less room for the future of Class C companies. C-Class enterprise audience all the people, China's internet population, even if 80, 90 such a subdivision is still an astronomical figure. and B-Class enterprises, the total number of audiences only 42 million enterprises, and selling cloth and Foxconn what relationship? From the head, everyone thinks that Class B is dirty and tired and unprofitable. But in turn, in terms of market capacity and size, our view is quite different. This will be discussed later.

Outside the concept, the investment organization also lacks the solid industry basic skill to evaluate the Class B project.

Lack of understanding of the industry

It must be said that the domestic investment institutions, investors also exist partial-(for the C-Class) TMT industry. So when investment institutions and investors are difficult to use the C class investment experience to examine the B-class enterprises, the rest is only from the basic learning. In this context, how to convince yourself to persuade the Investment Commission to vote on such a project?

Investment managers often have a strong inductive deductive ability, and have their own investment method, however, these laws in the encounter B is often not applicable, hard sets of the answer is not to find the investment object, and abandoned this set of things and it is difficult in the short term to form a new type of B investment methodology, B-class investment into a chicken.

Let's look at the long-standing problem of Class B-industry user habits.

Tyrants (Harting) does not understand the Internet

How do Class B enterprises view their customers? C-Class enterprises see customers as God, as a fan of emotional fetters, the user experience, and B-class enterprises, we see two words-tyrants (old hat), industry, especially the business model of the heavier manufacturing, there is a more vivid word to describe this feature-Harting. These B-class customers even on the enterprise information, electronic has not been completed, what to persuade them to Internet? In Class C, the bat's investment in gold and silver educates 70-90 of people and then helps them to accomplish their influence on their parents and friends. In class B, how do 80,90 in Lower ranks convince the company's managers? There are problems with the communication pipeline. It is not possible to affect parents as children. The Red Ridge Group, which was widely reported by the media recently, was not even understood by the children. "Many people feel that the old man has a problem, even his daughter advised him not to study this."

Important third party platform already listed Business-to-business investment is there a chance?

Finally look at the market situation. In the domestic mention of business-to-business, too many friends the first time to think of Alibaba, Hui Cong, global resources. The leaders of these industries have largely completed their listings-and there is little chance of such a comprehensive business-to-business platform. But the listing of the core city allows the investment agencies to start rethinking how to invest in class B companies.

Second, type B investment will be the next tuyere?

Toby Network is extremely optimistic about the investment future of Class B enterprises, for four reasons: the reference and inheritance of the rise of B type investment in foreign countries, the collision of the internal informatization demand and the external Internet trend, the huge market space, the industrial Internet and the Industrial 4.0 concept.

When the C-class opportunity began to peak, the investment organization began to pay attention to the Class B investment object, the foreign trend of this change on the domestic has a subtle guiding significance. Domestic Internet development is a characteristic of domestic enterprises will more or less inherit, copy the other side of the ocean products, creativity. In Class C, this time interval is very short, fast January, slow March will appear in China, a certain, mobile internet level, this speed even doubled, some areas say synchronization is not too. This rule also has certain applicability in the field of investment, so when Cbinsights released a report that 80% of the U.S. listed technology companies in 2013 belonged to Business-to-business Enterprises, many investment institutions and investors were touched.

Class B investment lags behind the C category, so in about a year or so, domestic investment institutions have begun to focus on investment opportunities in Class B. This is a little more than the network, in recent months, there have been a number of agencies contacted we would like to recommend the B-class investment target.

On the other hand, external stimuli are increasingly coincident with internal demand. Many domestic business-to-business enterprises are considering the enterprise informatization and Internet transformation. There are currently two major categories of such modifications, first, the enterprise distribution links of the comb, such as Haier's Day and shun the day of the product wins; Another consideration is to open up an internet-based incremental sales channel outside the original business system, which often does not have a significant distribution of distribution nodes online, such as the use of logistics warehousing, And through the social third party logistics, courier system to achieve. In the realization of often consider the platform and the two-self mode of integration, so we often hear such a grand ambition, "a certain So-and-so." There is also a more systematic, more radical, more comprehensive, that is, the whole business process of the entire enterprise transformation, which is often the hardest.

Behind this individual push is a huge market space. 2013, China's e-commerce turnover exceeded 10 trillion, of which the proportion of business-to-business accounted for about 8.15 trillion, accounting for 81.5% (the Ministry of Commerce "China e-Commerce report (2013)"). The huge market share stimulates investors to find a chance for success.

In addition, slogans and guidelines such as the industrial Internet and Industry 4.0 will have a positive impact on the public sector of business-to-business and traditional industry leaders. As society and the media join the enlightened ranks, the fall of the trend into reality may not be so difficult. Industrial Internet and Industry 4.0 very tall, but in the Toby Net, to complete this step still need to realize the enterprise information and Internet, that is, B-class business is doing, this is a development opportunity.

Third, where is the future investment opportunities for business-to-business?

The market has changed, so where is the opportunity for domestic business-to-business investment? The network considers the following three aspects: the vertical platform model, the vertical field of proprietary mode, Third-party services and data-oriented business opportunities, which we are more optimistic about proprietary mode and Third-party services.

Vertical Field Platform Model

The vertical sector platform model refers to the provision of Third-party business-to-business platform services in a vertical market, such as Shanghai Steel Union, an acre of farmland. In vertical platform mode, internet people are often the main driving force. Initially involved in vertical business, the Internet people at the end of the industry often lack a clear advantage, through the information platform to build, and then slowly familiar with the industry, providing deeper services (transactions, finance). Shanghai Steel Association in the early years with Alibaba business-to-business similar to the iron and steel industry information started, since 2013 began to layout its steel silver electric business platform. At present, the steel bank electric business has become the important factor to support the market value of Shanghai Steel Union. The operation of an acre of land more with the Internet people thinking, through the convening of official information to complete a huge database construction, the establishment of industry advantages. The vertical-field platform model focuses on serving the industry's circulation value. According to Toby Nets know, an acre of farmland has completed type B investment, see this kind of platform model is being the capital Pro Lai.

Proprietary models in the vertical field

Unlike the platform model, the creation of proprietary models often comes from practitioners in vertical subdivisions, which are often the industry's leading players, such as Woy and the core city. To branch through the core city for example, the predecessor of the branch of the group engaged in IC components distribution has nearly 20 history, has been the automotive electronics and FPGA in the field of important components distributors. In the view of Toby, ComTech core City can be listed successfully, inheritance is a very important factor, its financial statements we can see such elements, big customers are the main revenue, which is inseparable from the history. Although the Internet model gives the core city a higher valuation, but the industry behind the precipitation should not be overlooked. The ability of a business-to-business entrepreneur to mobilize as much as an industry advantage determines not only the length of time required for success, but even the success of the model.

The depth of participation in the industry is the inevitable factor of the success of the self-management model, outside the operation of the factors more about the project and the failure. The boss's original intention, the internal coordination and resource allocation, the recent goal of setting and adherence are extremely important. The boss is a subject that will give the group a whole valuation on the steps, or the firm to do such a project, is based on the internal business process of a transformation and acceleration, or want to be outside the original business to recreate a self; how the relevant departments of the enterprises are concerned about the new business and whether they should devote resources to cooperate Would a three-year unprofitable operating target become a group that will see profits within six months?

For proprietary-mode business-to-business entrepreneurship, the network believes that the power of investment institutions will help this type of entrepreneurship, especially by helping entrepreneurs balance their bosses ' perceptions and discourse, thus making such explorations sustainable.

Third-party services

This is a relatively hot area of the current business-to-business industry. But this kind of business is not in the start-up period, but belongs to the investment organization's withdrawal period.

We note that Alibaba has completed a wholly-owned takeover of the company this year. As a comprehensive foreign trade service Enterprise, a Tatsu in China 2014 years of export enterprises ranked in the top ten. In addition, Ali department also completed the investment or acquisition of three companies, Citic 21st century-a pharmaceutical industry comprehensive information and content services provider; information management system software supplier and technical service provider; Hang Seng Electronics, a company that provides financial it software to the financial industry. It should be pointed out that the three companies were acquired to do Class B business. HC Network also completed in October on the acquisition of Trillion letter information, and the management of shareholding and other equity reform, trillion letter information is a anti-counterfeiting technology, anti-counterfeiting products based technology companies.

At the business-to-business meeting of May 27, 2014, we pointed out that the post platform era of Chinese business-to-business will seek new profit growth points through a new flow-wholesale strategy, one of which is pipe control, which describes this behavior-" Pipeline control refers to the Business-to-business platform for investment, holding and even wholly-owned acquisitions of the leading competitive assets in the subdivision field. Creating new value for the data and processing data of such pipelines is a terrible thing. This is also an important reason for our particular emphasis on data services.

Million Nets is a passing example. As early as 2007, the joint capital injection million network and become a large shareholder, but this world-class distribution enterprises did not through the million network to achieve integration, to achieve China's distribution system landing; 2009, Alibaba acquisition million nets, strong exit, Million network huge corporate database but for Alibaba Business-to-business business unit brought a large customer resources. This is an important case of pipeline control in the wholesale flow of traffic.

So what are the opportunities for investment institutions in this wave of business-to-business-led investment? Toby believes that financial advisers and withdrawal are two more mature opportunities. For example, an investment agency in Beijing has played a matchmaking role in the middle of the acquisition of Zhao Xin's information, and the rules of such a business must have benefited greatly. On the other hand, investment institutions that have invested in third party services in the early years have been given the opportunity to withdraw. In a a-share market difficult, foreign stock market does not understand the current business, the withdrawal or is a safe way. With a few years of B investment experience, summed up the B type of investment methodology, to find B class of new investment opportunities, may be able to replicate their success.

To sum up, the above three kinds of investment opportunities, Toby Network is more optimistic about the vertical field of proprietary mode and Third-party services, the vertical field of proprietary mode to the investment institutions to become a balance, to help traditional business owners and operators to reach a compromise, to help industry-dependent projects can continue to develop; in the third party service model, Investment institutions are expected to reap the successes and sprinkle new seeds.

The time has come today, Toby Net to China's business-to-business market evaluation is: This is a best era, but also a worst era. The same is true of China's Class B investment in the 2015.