Mysterious venture to explain why give up Orchid pavilion, zhi-Xin Capital book return is only 0.3

When Guo went to the Nasdaq ring on the clock, the hidden in the pavilion behind the three venture investment institutions finally breathed a sigh of relief, in the case of China's IPO door closed, it is not easy to exit the market.

Investing in a long-term company is a gamble set up by VC companies, and they bet on the future of the investment enterprise. The cost of the advanced field is small, after the entry of the cost is higher, but the likelihood of exit is also larger, because the investment companies are in the industry leading position. However, once the failure to exit, the loss is heavy.

Zhang (a pseudonym), a venture partner who has focused on TMT investment for many years, has been actively involved in the first round of funding for A and B rounds, but has not yet reached an investment.

Now looking back, there seems to be no regret in his speech, for the performance of the Orchid Pavilion seems to have been in his expectation, and this is not what he wanted.

Zhi-Shin Capital book return is only 0.3

Zhi-Shin Capital in 2010 to participate in the C round of financing, 19.42 million U.S. dollars won 25.44 million U.S. dollars book exit.

Orchid Pavilion Set potential before listing, carried out a three-wheeled financing, involving three of venture capital institutions, respectively, for the joint venture, the Jinsha River Venture Investment and Zhi-xin. When the net was closed, three of the profits were different.

In accordance with the price of 9.5 U.S. dollars, the joint venture source, the Jinsha River Venture investment, Zhi-Xin Capital obtained 5.20, 3.78 and 0.31 times times the book return. In particular, the joint venture originated in 2008 to carry out a round of financing, investment 15.86 million U.S. dollars, won the 98.26 million dollar book exit, Jinsha Venture investment in June 2009 to invest in B-round, 15.99 million U.S. dollars by 76.45 million U.S. dollar book exit, and Zhi-Xin Capital in 2010 to participate in the C round financing, $19.42 million trillion has been pulled out of 25.44 million dollars.

In the capital market downturn, it is difficult to obtain a higher valuation, after the listing of the total market value of orchid Pavilion less than 700 million U.S. dollars. Some industry think that the Orchid Pavilion set the "forced" listing is the investors eager to withdraw from the will. Because of multiple financing, the founder team of the Orchid Pavilion is only less than 40% of the company's shares, the rest of the shares are controlled by the venture capitalists.

In any case, the Orchid Pavilion trend from the listing to the current performance of the stock price, is still a very satisfactory situation. But for the investors who are anxious to quit, they are happy to know.

If say 35 times times of exit is satisfied, then Zhi Xin capital 0.3 times times exit really let a person some disappointment. This also let not participate in Zhang No regrets, but more firmly believe his original judgment.

Stock prices SOAR: China stocks are doing well

Before the bloodshed listed in the stock and the only goods will and gathered time this year to show Bright Eyes.

For the Orchid Pavilion has just listed stock prices have soared, Zhang that one is the Blue Pavilion set potential pricing more reasonable, referring to the prior listing of the only goods will be, orchid Pavilion set potential valuation is also relatively low, thus giving the market a very good imagination space; second, from the macro-factors, in the stock from the beginning of this year to last week, the overall performance is good, is in the warmer , this also gives the Orchid pavilion a better momentum.

Indeed, the Orchid Pavilion is listed on the IPO price of 9.5 U.S. dollars, the valuation of only 465 million U.S. dollars, financing 78.85 million U.S. dollars. And from the macro-market environment, the U.S. capital market since the end of 2012, the overall trend, the standard and poor 500 index rose from November 15, 2012, to May 21 this year to record the highest close level, the cumulative increase of 23%.

"Before China's when, Macaulay performance or poor, only the performance of the product will impress the market, it also rekindled the confidence of the market." "Zhang that the U.S. listing is market-oriented, the U.S. Securities and Futures Commission is only to review the basic materials, the final listing is the market to decide."

In addition, before the bloodshed listed in the stock will and gathered time this year, the only product will be more from 6.5 U.S. dollars to the current 27.46 dollar price, the gathering era from the issue price of 10.5 U.S. dollars to so far 26.75 U.S. dollars, to some extent, enhanced investor confidence in the shares.

The future imagined space becomes the biggest doubt

Overseas investors are not necessarily looking at your earnings, he is more concerned about the size of the space to grow.

Although Orchid Pavilion set potential to achieve a profit only 6 years, which is extremely rare in the field of electrical business, but Zhang that only from the profit is difficult to judge the company's prospects, the profit itself can not represent a company or industry good or bad.

"For example, Beijing East, the recent performance is good, it is hard to say that it has a profit, but it can be said that the imagination of the space is very large." In turn, the imaginary space of the orchid Pavilion is not necessarily bigger than the East Beijing. Zhang told the financial Weekly reporter.

From the current performance of the Beijing-East and the Orchid Pavilion, according to TOP30 's 2012 report on the turnover of Chinese online retailers, the first, the cat: 207.2 billion yuan; second, Jingdong: 66 billion yuan. BEIJING-East 2013 estimated income of 70 billion yuan, 2015-year income is expected to be 190 billion ~2200 billion. The net revenue of the 2012 Orchid Pavilion was just over 200 million dollars. Obviously, the size of the two is not at the same level, even the tenth ranking of the customers are 4.5 billion.

In 2012, China's consumer goods export market amounted to $12.7 billion trillion and is expected to reach $19.83 billion by 2015 and a composite growth rate of 16%, according to another group. In view of this, the foreign trade market imagination space is still limited.

"Overseas investors are not necessarily looking at your earnings, he is more concerned about how much space you have to grow." Of course, they also care about growing up is not profitable, but profitability is not a major condition. Some companies why the valuation will be high, we buy is its future growth and imagination space. Amazon is a typical example, from losses to profits to losses, but Amazon has a high P/E ratio because everyone is optimistic about its future. Zhang further explained.

The importance of competitive barriers

Electric business industry, whether can resist Taobao, Jingdong, Amazon competition is Zhang consideration of the core issues.

For Zhang, to examine a business, he is more interested in the core competitiveness of an enterprise where, where the competitive advantage, competition barriers in where, because these will form a long-term competitive advantage of enterprises. In the electric business industry, whether the competitive advantage is sustainable, whether can resist Taobao, Jingdong, Amazon competition is Zhang consideration of the core issues.

Zhang that, from the entrepreneur's point of view, Guo to disease is an excellent entrepreneur, and its good education background and international work experience for the electric business has laid a very good foundation, and Guo to seize the opportunity to be good at internet marketing.

However, the investment style has always been known as "calm, cautious" Zhang admits that he is still worried about the vertical type of electric dealers, their own investment in the electrical business experience is not much. They are more inclined to the community of the electricity quotient, platform class of electric dealers are only a few, capital requirements will be relatively high.

Focus on the foreign trade of the electric dealers also have several large, in addition to the Orchid Pavilion set potential, as well as Dunhuang nets, of course, the pattern is different. In contact with the Orchid Pavilion, Zhang has been thinking about a problem is: foreign trade in a vertical class to do the imagination of how much space? Until now, Zhang that he did not see a large enough space for the imagination of foreign trade dealers.

In Zhang's investment philosophy, because of its own focus on long-term investment, pay a higher price, the demand for return is relatively high, so the usual Zhang is not a few billion dollar market value of companies, but a billion of, billions of to tens of billions of dollars of companies.

In all areas, Zhang more optimistic about the online tourism market, because there have been successful cases abroad, Zhang that the largest online travel companies in the market value of up to 35 billion U.S. dollars, and China's Ctrip market value of less than 5 billion U.S. dollars, only one-seventh of foreign countries. This market space is big enough, although each company has its own pain in the process of growth, but imagine space is very important.

However, Zhang modestly that compared with other investment institutions, their own in the field of vertical electric business, everyone has their own value judgments, the above view is only their own personal views.

Company Profile:

Orchid Pavilion Set Potential was founded in 2007, is an E-commerce company, its lightinthebox.com is China's domestic well-known international trade website. The company has more than 800 employees in Beijing, Shanghai, Suzhou and Shenzhen.