The hidden worries behind the unprecedented prosperity of the gem-rich PE industry

Fortune Yanxiaoping, general manager of Beijing Branch, said: Venture capital companies should be rational investment enterprises, otherwise it will face a dual-lose situation as of June 10, in the gem listed 86 stocks, the average price-earnings ratio of more than 66 times times, of which more than 100 times times the stock price of 13, the creation of a billionaire also reached hundreds of.　　Undoubtedly, the gem let those high-growth enterprises in the capital market has been faster development, and behind them, there are a number of winners, that is dormant for many years of venture capitalists. Because of the low cost of VC/PE in entering the business, they have become another dazzling star in front of the multiples. In the face of great interests, all the capital are scrambling to play the role of PE, they are not lack of local government guidance fund, private capital, in the past year, do PE become a fashion. And in every way PE rise, a new crisis also quietly coming.　　There are market rumors, professional PE can not get a single, and the project is often a foot to rob the professional PE, the guerrillas and the regular army between the "East Wind and the West Wind," The battle is escalating. In the face of the chaos of the domestic PE market, has 10 years of investment history of the veteran investment organization fortune is how to view the current PE market, fortune Investment in how to select the project?　　To this end, the "securities daily" reporter interviewed in the gem harvest a lot of Fortune venture capital Beijing branch of the general manager of Yanxiaoping. Prevent the "IPO" phase of the project overheating investment phase appropriate forward the securities daily: the launch of the Gem, high P/E multiples, the face of a hundredfold multiples, as well as many of the domestic investment institutions to scramble for the Project Chaos Bureau, as a well-known investment institutions, fortune is how to select the project, at present,　　What are the changes in investment rules compared to projects invested in the past? Yanxiaoping: In the face of the current situation, fortune still continue the existing investment strategy and rational investment mentality, we believe that China's rapid economic growth in the micro-level of SME investment opportunities will always exist. Of course, as a response, fortune also to a certain degree of adjustment, on the one hand, adhere to the "center of gravity Move Down", in Shenzhen, Beijing, Shanghai, based on the three core groups, in some of the active central cities such as Guangzhou, Xian, Chengdu, Wuhan, Changsha, Nanchang and other places to set up representative offices, in Nanjing, Hangzhou, northeast and other places to set up representative offices,　　Ensure the plowing and channel relationship of project resources in the region; On the other hand, expanding the team to enrich the front-line investment managers, the recent fortune is carrying out a larger recruitment; Furthermore, in order to prevent the overheating of the "IPO" phase of the project, the investment phase will be properly moved forward. In addition, in view of the current investment environment, fortune investment projects in the project compared with the previous investments also made some adjustments: first, the introduction of the gem, making PE exit channels become smooth and diversified; In order to meet the requirements of domestic IPOs, in the selection of projects, the company will be more fancy innovative and growth-oriented projects, in theMore focus on industry options for investment projects. PE in the pre-IPO high price-earnings ratio is not conducive to industry development "Securities daily": at present, the domestic investment industry has an upsurge of investment enthusiasm, the emergence of various capital, some investment institutions do not focus on early investment, before the enterprise IPO into the enterprise, and is a high P/E entry, which for the whole PE industry, what impact?　　What are the risks to the business? Yanxiaoping: In the Enterprise IPO before the high P/E to enter the enterprise, which for the whole PE industry, the impact is great. Mainly reflected in six aspects, first, will cause PE/VC industry bubble tendency, lost the essence of the industry, PE/VC industry by brand, team, service, value discovery and so on to build their core competitiveness, now has evolved into a simple price competition; second, this PE investment way, exacerbated some entrepreneurial mentality of the impetuous , in the long run, both the entrepreneur and the investment organization are both lost; third, the investment institutions high P/E entry enterprises will be more to take the risk of gambling and other terms, resulting in the project company's quick success, sacrificing the long-term development of enterprises in exchange for the financial statements of the standard; The optimistic expectation of the project company for IPO once the capital market fluctuates periodically, it would be a disaster for both companies and investment institutions. Five, the consequences of price, Rob Project is unable to have the patience and time for the project rigorous due diligence, there will be a number of failure of typical cases;　　The consequences of high P/E investment will inevitably result in a decline in the fund's investment income. Securities Daily: As an investment organization, the first thing that enterprises value is the value-added services beyond the capital.　　What do you think of this statement? Yanxiaoping: Smart entrepreneurs understand that, as investment institutions, if they cannot provide value-added services outside the capital to the enterprise, the investment institutions cannot establish a long-term brand and value, nor can they gain the trust of the investment enterprise and the trust of LP, but the value-added service ability varies widely among the investment institutions,　　Simple to say for local conditions, because people do not, according to their aptitude.　　"Securities Daily": in the face of the various capital, please talk about the local VC in the gem of the performance and the advantages?　　Yanxiaoping: To deep venture investment, fortune for the representative of the local venture on the gem, to achieve impressive performance and local venture to adhere to the local capital market, adhere to local recruitment, local withdrawal of the belief, to adapt to the domestic gem, the rules of the SME board to screen items inseparable. In addition, the local venture has his advantages. First, local venture investment in the local collection of RMB funds, local withdrawal, as well as to invest in the domestic capital market to be listed in the project can reduce the unnecessary approval and structure of the simple, easy to quickly decision-making, rapid investment; second, local VC to the domestic capital market understanding more thorough, More adaptable to the requirements and changes of domestic capital market rules, coupled with the understanding of local entrepreneurs and the mastery of local culture, are more acceptable to local entrepreneurs. [Page] The break of listed company is the stock market issuing bodyThe inevitable result of reform of the system "securities daily": a company responsible for the reporter said, I do business is to let enterprises listed, after the listing of how to show the first no matter, have this mentality of people, and then meet the current pe/vc of the investment means, it is likely to put such enterprises into the listing (at home and abroad), I would like to ask, for this phenomenon,　　What do you think? Yanxiaoping: Listing is only an important milestone in the process of enterprise development, rather than the ultimate goal of enterprise development, how to use the capital market platform to make the enterprise bigger and stronger, made into a century old shop is the mentality of entrepreneurs, but it is undeniable that you encounter is not a case, coupled with some of the pe/vc of investment means,　　To see a successful IPO as the ultimate goal of enterprise development is to put the cart before the horse.　　This phenomenon should be too worried, will be through the automatic correction of the market, the fittest to adjust, so that the real visionary, aspiring entrepreneurs are not tired of the capital market, can correctly view and control the capital market, for the enterprise sustainable high-speed growth to provide a steady stream of power, advocating the market means automatic adjustment.　　"Securities Daily": Gem is known as the creation of rich tools have been consensus, and many enterprises listed after the break, the face of frequent break phenomenon, the exit of the investment institutions have no impact? Yanxiaoping: The frequent break of gem is an inevitable result of the reform of China's securities market.　　In the United States, Hong Kong and other developed capital markets, new shares break is a phenomenon of sakong, which for the gem listed companies in the future of the IPO inquiry, pricing reform and improve will bring positive impetus to the role.　　The withdrawal of investment institutions is not very significant, the exit of investment institutions are generally listed in the company after 12 months after the listing of the company's two-tier market share price will gradually converge with the market average valuation system, two-tier market short-term fluctuations in the PE/VC value investment is not obvious impact.　　Strengthen the education of investors to prevent the national PE craze "securities daily": as an investor, how do you think of the current domestic PE industry development status? Yanxiaoping: China's PE/VC is an emerging industry, with just more than 10 years past the United States and other developed countries in the past a century, compared to the developed countries in the US and Europe, China's PE/VC is still in a toddler stage.　　As China's economic reform and opening-up more than 30 years of rapid growth, as well as the adjustment of industrial structure, small and medium-sized enterprises to enhance economic vitality, to the PE/VC industry to bring enormous opportunities and challenges, PE/VC industry is facing a blossoming, barges situation, the entire industry in the next 10 years will have a tide, the process of the fittest For PE industry, the government should give private equity fund a relatively loose market environment, rely on market competition and industry self-discipline to get vigorous development. In addition, the Government should expeditiously introduce the relevant laws and regulations of equity funds, strengthen the education of investors, prevent the national PE upsurge, and foster institutions LP. In addition, in tax and other links, the Government should give policy inclination to encourage entrepreneurship, to PE/VCMedium and small enterprises in the early period of investment to give policy support, but also to further improve the protection of intellectual property rights environment, encourage innovation, accelerate the pace of building an independent and innovative society.