The agricultural field is becoming the investment hot spot VC and PE big guy Nuggets capital depression

Even in the local area, this is a big news.　　Tens of millions of Wenzhou household appliances business owner, turned to do "swineherd". Huang, Wenzhou Leqing man, chairman of Zhejiang Giant Branch Electric Co., Ltd.　　In the early 2007, the enterprise size is not very big he, in the industry became a new topic-he invested 5 million yuan to take over the Leqing a farm began to raise pigs.　　Yet coincidentally. In the first half of this year, the city added 8 individual private agricultural enterprises per day, according to the latest report from the Wenzhou business sector.　　By the end of 2007, Wenzhou investment in agricultural private enterprises have reached more than 2000, the total investment of more than 6 billion yuan.　　The "most sensitive" Chinese businessman has a vision of agricultural investment covering all aspects of farming, agro-processing and agricultural market construction. This fact also confirms the prophecy of Lin Minxiong 2 years ago that "investment in China's agricultural sector is bound to attract capital attention."　　He is the China Branch Investment (Fund) Management Co., Ltd. since 2005 began to focus on and explore the Chinese agricultural sector investment opportunities.　　At that time, there are only 00 and a few VC (Venture Capital, entrepreneurial Investment, hereinafter referred to as VC) institutions concerned about the agricultural sector, and now a lot of "High-tech agriculture, consumer goods, food juices, etc." into the direction of strategic investment. Investment in the big agricultural sector, including two lines.　　One is from the beginning of breeding, to planting, agricultural products deep-processing, such as agricultural production field, the other is around the production field of agricultural services, including agricultural machinery, fertilizers, agricultural films and other means of production, agriculture and tourism, green travel and other extension areas. "There are a lot of big international agricultural giants," Lin Minxiong, "and there will be great companies in China in this field." "Capital Depression" the world is flat, how can Chinese agriculture always depressions? "Capital market is the vane of VC investment." Starting from the end of 2007, the agricultural sector in the stock market began to strengthen collectively. In the market integrity consolidation in those days, the agricultural sector is bucking the trend.　　"Capital is re-discovering the value of investment in this field."　　This process of re-discovery will also be conducted from the two market to the front-end market. Market participants believe that this collective strength and "agricultural prices continue to rise." Agricultural prices have risen globally, with wheat, soybeans and milk rising 82%, 65% and 46% per cent in global futures markets, respectively, since the beginning of 2007. Recent studies, such as Germany's DWS and Credit Suisse, have shown that rising agricultural prices will continue and that agriculture will become a global investment hotspot in the 2008. [Page] at home, "agricultural prices are also experiencing a great return."　　Pork prices have risen to their all-time highs this year, but economists point out that "the price of pork is five or six dollars when wages are only dozens of dollars, and now the disposable income of urban residents has been thousands and pork prices have risen by more than a single fold". The recent Politburo meeting pointed to aStep research to promote agricultural and rural development work, increase support for agriculture and farmers policy. "Without agricultural instability", agricultural investment compared to other areas, "industry policy risk is very small."　　Moreover, seven or eight consecutive years, the development of agriculture, rural and urban scissors are important tasks of the Government. "The presence of these external factors can only be said to accelerate the prominence of investment opportunities in the agricultural sector." "Even without these factors, the field will attract capital attention sooner or later," said Lin Minxiong, director of investment agriculture at China branch. "China and the world are in line," color TV and other industries have been in line with international standards, and Chinese agriculture is still used in domestic standards, to be in line with the international industry must be upgraded. This is the chance.　　Since the early 1990s, the industry which is developing vigorously in the process of China's industrial upgrading attracts the entry of most investment. De Qingyuan founder Zhongkemi also found the "egg" opportunity. Zhongkemi, who studied missiles abroad, found that the standards of food in the United States and Europe were very stringent, and that eggs not only had their own brands, but also had production dates. Against the domestic, eggs are no production date, brand, production standards, "three without products." Before anyone saw this may be an opportunity, de Qingyuan first done, it is possible to succeed.　　Sales in 2007 are expected to grow 4 times times higher than in 2006, A.C Nielsen's survey data show that in 2006 de Qingyuan has occupied Beijing brand eggs 71% market share. "Every niche market in the agricultural sector has this opportunity. "China has a big enough consumer market," Lin Minxiong said. Germany's DWS and Credit Suisse reports that 2.5 billion people will earn more than 3000 to 5000 dollars over the next 5 years, a large chunk of which will be China's contribution.　　These affluent people, their "basic necessities" to upgrade. "Such as juice, wine, flowers and other industries, in the past is almost unthinkable." "Pioneer Investment president Lu Buzing said. The development of China's milk industry may be the future of other segments of the agricultural sector. This area already has a big enterprise group such as Mengniu. Mengniu, which was founded in 1999, has risen from 1116 to 2nd in the 6-year business income in the National dairy enterprise.　　During the period from 1999 to 2001, the 1947.31% growth rate not only surprised many people, but also attracted international investment agencies including Morgan Stanley. "Future competition is predictable. "Long-term focus on agricultural investment, currently working in the domestic government background of agricultural investment institutions Sun Yuti pointed out." Perhaps Ding Hui discovered that the south is a wonderful pioneering, because South Fu is located in the "South Ping" town is said to be found on the map.　　But now, from Xinjiang, Inner Mongolia to Hainan, "there are investors everywhere." Baofan, the CEO of Huaxing Capital, pointed out that the capital flow also satisfies the supply and demand relationship, "when the capital supply and demand of Shanghai, Beijing and Guangzhou are balanced, the capital will flow to the two or three-tier cities", and even the rural areas, most of which are located in "remote" areasAgricultural enterprises also entered the eyes of investors, not to mention this area is also a capital depression. Lin Minxiong says competition can't be avoided.　　So far it has happened, "the first thing we were looking at was the last one to be taken."　　"Copy Mengniu Model" Agriculture is a very long industrial chain, which link in this chain will let investors favor have added? Industry insiders pointed out that, to some extent, the existing and subsequent investment cases are the successful experience of the Mengniu replication. China Branch investment, and terminal consumption-related enterprises, it will take great effort to see the field. [Page] In fact, this is not the opinion of China Branch investment. Currently disclosed in the agricultural field of investment cases, mostly "with the consumption closely related" enterprises, whether Huiyuan juice, Mengniu Dairy, or double sinks group, de Qingyuan eggs, or dragon Puer, Yunnan Lido Flowers, Fujian, Fujian Linon, etc. Pure "planting, farming enterprises" see very little, the reason is that "and consumption is tied, will not be affected by the economic cycle."　　And from 1999 to focus on agricultural investment industry Personage pointed out that the end consumer goods "relative to other time period", easier to understand, "also more easy to control risk." As an investment institution with a government background, the German Development Investment Corporation has been paying attention to investment in the field of agriculture.　　But the company's Chinese president, Shi Tairong, argues that investment in agriculture is difficult to attract long-term concerns about purely commercial capital, that "the income and profits of agricultural enterprises are relatively stable" and that the return cycle for investment is relatively long, making it much more risky for investors than in other areas. Currently working in the domestic government background of agricultural investment institutions Sun Yuti pointed out that the VC has been difficult to enter the agricultural sector is an important factor is "not controllable" too strong. On the one hand, agricultural products front-end production by natural disasters, the impact of man-made disasters and so on, on the other hand, is "the state in this piece of regulation is very strong", although agricultural products, feed and other means of production because of oil prices are rising very strong, "but back-end output of food, eggs and other prices floating too much, leading to a substantial increase in　　The state will adopt a regulatory policy. "The price of the front-end means of production cannot be controlled, and the price of the latter is regulated by policy." Sun Yuti points out that this has resulted in relatively low profitability and relative instability in agricultural enterprises. This is hindering the need for enterprises to have high returns, high growth of VC investment in the agricultural sector barriers.　　It is understood that mariculture is in the field of large agricultural profit margin is relatively high, this plate 2006 gross margin of 11.12%. But Lin Minxiong that this is not the case with the industrial upgrading of the situation before the link. "I don't think there is a problem with the premise that there is no high growth in agricultural enterprises." "Mengniu has been growing at around 229% in the past 4 years since 2002, while in another investment in China, the company has grown more than 100% per annum in Ningxia Red, which specializes in the production of wolfberry wine; Another area of concern is puer tea, according to the State Council Development Research CenterJianlong analysis, its income growth rate is also several times the growth rate of the national economy. The Forbes Global Magazine survey shows that agriculture is China's most lucrative industry, followed by real estate and finance. China's newly rich crowd "will be willing to pay added value for agricultural products". Vanguard Investment President Lu Buzing that the return of agricultural prices in the future is still a trend. "The profits of agricultural enterprises in these two years should be increased yearly." "Agricultural enterprises that are linked to the consumer sector are the focus of attention."　　Some foreign investment institutions pointed out that these enterprises and other consumer goods enterprises, "already have a certain brand, their own sales channels, relatively strong profitability." "Agriculture in China or weak quality industry, its overall profitability is relatively low." Sun Yuti said, if you want to continue to profit, there is a certain demand for the size of the enterprise. As a result, joint ventures seem inevitable.　　There is no milk source, no factory, no market Mengniu, the first is through the "virtual Union" of 8 enterprises to activate others assets, and rent milk car delivery milk, and cattle farmers to build milk source base to reduce production costs began to start. He Ningmin, deputy director of the Institute of Management Science, China's economic Reform Society, points out that China's current family economy, which is spreading its land, is making the space for production development less and less. Agricultural enterprises in the face of these decentralized customers, the price of their products is also difficult to improve.　　For example, the promotion of biological fertilizers, "individual farmers are rarely willing to reduce land pollution, and pay a large price to buy biological fertilizers." At present, VC investment in the leading enterprises, there are scattered farmers to integrate, break through the existing agricultural system methods. Zhejiang Sen and is a flower growing enterprises, it created a "quasi-stock field model", so that farmers in the land to join the company's production and management system, Yusen and seed industry supply seedlings, technical guidance, contract acquisition and other means of operation.　　Recently received the investment in Shenzhen, the Lido Flowers, but also through the company and farmers to deal with the current land to intensive production constraints. Shi Tairong pointed out that the German technology investment company may be interested in enterprises, is "clear positioning, corporate structure transparent." Agricultural leading companies are more likely to do this than smaller, more fragmented businesses. And the outside contact the latest, and is located in remote, most agricultural enterprises "in attracting talent, improve governance structure" are flawed. "Fake and inferior in this field, also than other market environment mature industry to be more severe." "Lin Minxiong said. [Page] Opportunity starting from the terminal in Lin Minxiong's eyes, investment in agriculture is no different from real estate. "The development of the real estate market can lead to the development of many upstream industries, including steel and cement, as well as agricultural investment." "The development of the terminal area linked to consumption will promote the development of all relevant industries upstream, but" the upside is not necessarily true. "　　In fact, since 2006, this wave of food prices, food processing enterprises and end-product enterprises have brought a very small cost pressure. "For VC, are willing toInvestment in High-tech Enterprises. But this does not work in the agricultural sector at all. "Sun Yuti said that, with other industries that have advanced industrialization, the agricultural sector is relatively low in size, some so-called new technology developed," there is no relevant companies willing to buy.　　"Beijing once had a VC agency to invest in a technology-oriented agricultural enterprise, and finally had to be liquidated for not seeing a profit model." Although biotechnology is an important direction of agricultural investment in the long run, three subdivision areas of biological breeding, bio-pesticides and bio-veterinary drugs are considered to have "very large market space". For example, bio-pesticides, China's traditional high toxicity, high residue of pesticides have repeatedly encountered green barriers, at the same time the state-related environmental policy has gradually limited the production of such products, agricultural industry, the overall upgrade is imperative.　　But some research institutions also point out that some of its past foreign sales were "not a hit." Liu Xiaojien and his Xingtai technology are more fortunate.　　Liu Xiaojien did not take the initiative to find, but xingtai in Zhengzhou High-tech Development Zone of small enterprises, has attracted a number of VC agencies attention. The establishment of Xingtai technology in 1991, Liu Xiaojien the Enterprise positioning in the "technology-oriented" enterprises. The tech-firm, with no products available in the first 6 years, has been working on food emulsifiers and bio-enzyme preparations. Today, Xingtai is already the largest research and production organization of domestic food emulsifier, which occupies 80% of the market share of this industry.　　The reason, Liu Xiaojien said, "We are starting from the steamed bread," from the end product to improve the quality of flour, to achieve China's staple industry, standardization. "Starting from the terminal, gradually toward the front end", which is also a trend of investment and agricultural industry development.　　Almost all the institutions in agriculture now point out that they will still be looking for opportunities mainly at the terminals, "and of course they will follow the agricultural production chain to find some investment opportunities, such as processing companies, breeding companies and even improving the seed nature of biotech enterprises." But in fact, because the previous agricultural industry chain is not perfect, "industrialization, industrial chain perfect" is now almost all the so-called industry leading enterprises in doing. For example, Mengniu, in the initial product base, slowly already have their own industrial breeding base, breeding centers and so on. "For these enterprises, the most important is two, one is to control the price of upstream and downstream products, on the other hand, to ensure that the source of raw materials sufficient."　　Sun Yuti said, so it is inevitable to extend up. Therefore, besides such brand enterprises, the agricultural enterprises with resource advantage will become the hot spot of investment.　　"Such as the Seaside aquaculture", on the one hand, the future of sea cucumber, abalone, such as high-grade nutrition demand will be more and more, on the other hand, China's clean sea area will only be less. "In a sense, this is not a simple agricultural enterprise, we will be more to put them into the resource-oriented enterprises." Industry insiders say.