In 2017, the total size of national private equity funds exceeded RMB 12 trillion. Under strict supervision, the growth momentum of private equity funds has slowed somewhat, with the number of offerings falling by 34% year-on-year. The size of private equity funds has experienced negative growth for the first time, and some obvious structural changes have emerged. The growth part is more concentrated in equity venture capital funds, and industrial funds are forming a very distinctive branch. With the recent release of the 'Unicorn' list, it has aroused widespread concern.
As a senior person with more than ten years of investment in the industry, Yin Jiayin, managing partner of Beijing Hailin Investment Co., Ltd., said that now is the golden period for the development of the pan-semiconductor industry and the best moment for industrial funds. Future industrial investment opportunities are concentrated in Divide the industry field. She plans to build a domestic semiconductor equipment giant with a sales income of 10 billion yuan and a profit of over 1 billion yuan by 2020 to cultivate a unicorn enterprise.
Adhere to 'one center, two basic points' and deepen the pan-semiconductor field
Hailin Investment was established in 2005. It is a joint venture between China and Israel. It is also one of the earliest innovative industrial investment institutions in China. It covers venture capital, merger and acquisition integration, financial advisory and capital management. As of June 2017 Hailin Investment Management Fund amounted to 30 billion yuan. Its China Optoelectronics and Innovation Technology Industry Fund is the largest domestic industry fund focusing on the field of pan-semiconductors. Sponsors include BOE, Infiniti and other large domestic and foreign companies. It is supported by the Chinese and Israeli government, the Ministry of Industry and Information Technology and the China Optics and Optoelectronics Industry Association.
Since the Nineteenth National Congress, the country has referred to industries such as integrated circuits, 5G, new materials, new energy, and equipment manufacturing industries as strategic industries. The entire pan-semiconductor industry has ushered in the best era.
In response to new development opportunities, Yin Jiayin stated that Hailin Investment has proposed a strategy of “one center and two basic points.” One center is centered around industry, two basic points are focus, and projects that do not understand are not invested and passed. Cross-border mergers and acquisitions, to promote the organic integration of the leading companies in the subdivided sectors and existing domestic investment companies, focusing on the creation of high-end automation equipment and flexible semiconductors.
Currently, Hailin Investment is planning to acquire a pan-semiconductor segment leader. After landing, it will deepen integration with domestic investment projects. By 2020, it will grow into a billion-billion-level sales revenue and domestic semiconductor equipment with a net profit of over one billion yuan. Unicorn.
Focus on the upstream of the industrial chain, Hailin Investment gross margin exceeds 30%
On March 8th, BOE A announced to invest 92.5 billion yuan to build the sixth-generation AMOLED production line and high-generation thin-film transistor liquid crystal display device production line projects and supporting projects in Chongqing and Wuhan respectively. On March 12, Broadcom acquired 117 million US dollars for the high price of Qualcomm. The plan was rejected by the United States on the grounds of national security. During the two sessions, a large wave of integrated circuits was included in the government work report. This series of events caused the pan-semiconductor industry to catch the eye.
Yin Jiayin said, 'Some companies are concerned about the subject matter of a relatively large amount. What they are doing is eye-catching overseas mergers and acquisitions. That is the way they are manufactured in the middle reaches. Their gross profit margin is 10%. We mainly focus on equipment. The upper part of the smile curve of the industrial chain, such as materials, usually has a gross margin of 30-50%.
To circumvent the cyclical risks of high-tech industries, Hailin Investment is rapidly transforming into pan-semiconductor equipment, and has strengthened its supply of semiconductor equipment. 'I personally did CRT before and watched the rise of TFT LCD in China, even though traditional screens are still There is no decline, but OLEDs have risen and equipment manufacturing has remained unchanged. Many of the companies we invest in now do CRT equipment, TFT equipment, and LED equipment. We do not target an industry. These are ours. Customers, we all supply equipment to them. It may be a manufacturer to supply these equipments. Providing turnkey projects in smart factories is our next goal.
The exit method is flexible and diverse, with no fear of the IPO window being closed or not
Since the unusual volatility of stock indexes in 2015 revealed that the market is still immature in many aspects, the reform of the registration system once stagnated, causing long-term backlogs of application companies to be listed at the entrance to form a huge 'barrier lake'. In 2017, the CSRC concluded the IPO business. At one point, it was 633. Waiting meant funding. Some projects missed the best time on the way to the IPO and even disappeared.
'Every company we invest in can have a synergy effect. For example, some are made from devices on the front end of the semiconductor, some are back-end, some are detected, and can be easily exited through industrial integration methods such as mergers and acquisitions of listed companies. Since then, regulators have had a relatively large impact on regular exits. For example, the IPO window has stopped, but we are mainly focused on industrial integration and exit is more secure.
Up to now, Hailin Investment has successfully invested in a large number of star enterprises such as Dongxu Optoelectronics, Shangda Electronics, Lianchuang Electronics, Xinyihua, Huasheng Power, and Blu-ray Technologies, etc. There have been 16 successful exits. 10 companies have adopted IPO, and most of them are based on industrial integration.