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ASIA P RIVATE E QUITY
REVIEW
A MONTHLY REPORT ON DIRECT EQUITY INVESTMENT IN ASIA Greater China Edition
Greater China Edition
大中華版
JULY 2014 | 二零一四年七月號
Traffi c Abroad
Once, outbound capital from China was hardly mentioned. But
surging outfl ow of capital from the world’s second largest
economy is reshaping the global trade equation. The United
Nations Conference on Trade and Development reckons that in
2013, outbound investment from China-based establishments reached
US$101.0 billion, an impressive 46.8% increase from the US$68.8 billion
in 2010. China is now the third largest outbound investor after the US
and Japan. The percentage dwarfs the 8.0% increase during the same
period for foreign direct investment into China (fi g. 1). Outbound capital
from Asia’s largest economy now outpaces that recorded for inbound.
Along with China’s escalating volume of outbound investments are
an increasing number of contentious episodes. A week before the end
of June, the state-owned Baosteel Group Corp. (寶鋼集團) managed
to acquire Australia’s Aquila Resources Ltd. after an uncompromising
confrontation with Mineral Resources Ltd., a majority shareholder in
the target company.
In Europe, one of the most favoured investment destinations by
Chinese enterprises, the latest scene in the battle to take control of
Club Méditerranée (‘Club Med’) unfolded on the last day of June. Italy-
based private equity fi rm Investindustrial announced its intention to
acquire Club Med at €790.0 million (US$1.1 billion). In offering €21.0
per share, Investindustrial’s price is a 22.0% premium to that tabled by
China’s Fosun International (復星國際有限公司) and its private equity
partner, the France-based Ardian (collectively known as ‘Fosun-Ardian’)
back in May last year.
CONTENT
內容提要
Feature ............................................... p.1-4
封面文章
■Traffic Abroad
Analysis .............................................. p.5-6
本期關注
■Valuation Surge
Case Study.......................................... p.7-8
案例研究
■The Baring Wood
News ..................................................... p.9
動態透視
■The Football Club in China
■P2P Loans to Come under Scrutiny
■Formosa Plastics Waits for
Gala TV’s Screen
Funds ..............................................p.10-11
基金動向
■In Search of Liquidity
Investments ..................................... p.12-14
投資聚焦
■The Financier
■The Lodgers
■For the Health of the Nation
Divestments .........................................p.15
資金套現
■IPO Train in HK
The Lens .........................................p.16-17
圈內透視
■Today’s Capitalist
Window of the World ...........................p.18
世界之窗
Summary : Subscribers’ weekly ......p.18-19
每週摘要
Summary : Deals .................................p.20
交易摘要
Stock Watch ...................................p.21-23
股價表現
Index & Exchange Rates ....................p.24
索引及匯率
China's Foreign Direct Investment Trend – Infl ows and Outfl ows
(2010 – 2013)
From 2010 to 2013 –
• Outbound capital from China
grows at a more rapid pace
than inbound capital
• Outbound investment garners
a 46.8% increase
• Foreign direct investment into
China only grows by 8.0%
Fig. 1 Source: United Nations Conference on Trade and Development
Compiled by: ASIA PRIVATE EQUITY REVIEW
2010
0
20
40
60
80
100
120
140
(US$ bn)
114.7
124.0 121.1 123.9
101.1
87.8
74.7
68.8
2011 2012 2013
Inflows Outflows
46.8%
8.0%
July 2014 | 二零一四年七月號
GC-2
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
ASIA PRIVATE EQUITY REVIEW
ISSN NO: 2074-7322
Publisher and Editor
Kathleen Ng
Writing and Research
Henry Lo
Emily Ngai
Andrew Pang
Katrina Shum
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Centre for Asia Private Equity Research Ltd.
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Greater China Edition
亞洲直接投資評論 - 大中華版
While Fosun-Ardian plans to
bring Club Med’s exclusive holiday
resort model to the burgeoning China
market, Mr Andrea C. Bonomi, senior
partner of Investindustrial, differs.
“No enterprise should bet its whole
future on China, on one country,” he
said at the news conference in Paris.
It is perhaps the most public doubt
spelt out by Europe-based investors
on the merits of Sino-European
joint ventures.
It has been more than seven years
since general partner fi rms in China
began to explore the cross-border
investment concept. Since then, over
29 funds, that aggregated to US$8.4
billion, have been established (fi g. 2).
The state has been an ardent support
of outbound capital, and participated
in seven funds as sponsors.
But there are early signs that such
a cross-border investment concept
may require structural adjustments.
China – Adieu
Mandarin Capital Partners
(‘MCP’), one of the pioneer general
partner fi rms that advocated such
a transnational investment model,
Key Points
●There are early signs that the cross-border investment concept may
require structural adjustments.
●Mandarin Capital no longer adheres to its original China outbound
mandate, frustrated by “intrusions” of its state-owned limited partner.
●A CAPITAL believes in having an Asian investor to best benefit from
the Chinese market.
●The first half of 2014 set new records, boasting the highest cross-border
transaction volume and the largest deal by a private equity firm.
is no longer adhering to its original
mandate. MCP commenced its
bilateral investment between China
and Italy in 2007. Its maiden fund,
MCP I, at €328.0 million, counted
China Development Bank Corp. (國
家開發銀行), The Export-Import
Bank of China (中國進出口銀行)
and Italy’s Banca Intesa Sanpaolo as
its limited partners and it completed
ten deals.
In a recent communiqué, Mr
Alberto Forchielli, a founder of
MCP, stunned the growing pool of
managers who are engaged in cross-
border investing. “We do not want
to do China outbound any longer,”
he proclaimed.
MCP I’s performance results were
more than satisfactory and ought
not be the deterring factor for MCP
to bid adieu to China. According to
Mr Forchielli, following the recent
divestiture of Italmatch Chemicals
SpA (‘Italmatch’), which was sold to
Ardian, the fund returned 108.0% of
the amount that it drew down from
investors. MCP has been able to
display its ability to achieve liquidity
from its portfolio as Italmatch is its
fi fth divestiture.
It was, however, China-based
investor or investors of MCP I
that instilled discomfort and led
Mr Forchielli to redefi ne his fi rm’s
mandate. “We do not want large
SOE (state-owned enterprise) as
LP (limited partner). They are hell
and made lots of intrusions into
management independence,” Mr
Forchielli plainly remarked. With
two state-owned enterprises having
invested in MCP I, it is unclear
whether he was referring to one of
them or both.
Currently, MCP is raising its
second fund, which has a target
size of €400.0 million. By the end
of August, it shall be celebrating
the fund’s fi rst close, expected to
garner €200.0 million. MCP II has
not abandoned China entirely. In
the maiden deal for MCP II, the
Cross-border Fund Pool (2007 – Jun/2014)
2007
1.1
0
0.5
1.0
1.5
2.0
2.5
3.0
2008 2009 2010
0.6
2011
2.9
2012
0.2
2013
2.7
1H/2014
0.9
(US$ bn)
Annual Cross-border Fund Pool Geographical Focus of
Cross-border Funds
Amount Surveyed: US$8.4 bn
Europe
16.1%
Middle-East
3.0%
Africa
35.8%
Global
45.1%
Fig. 2 Source: ASIA PRIVATE EQUITY REVIEW
“We do not want to do China
outbound any longer.”
“We do not want large SOE
(state-owned enterprise) as LP
(limited partner). They are hell
and made lots of intrusions into
management independence.”
Mr Alberto Forchielli
founder of Mandarin
Capital Partners
July 2014 | 二零一四年七月號
GC-3
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
buyout of the Italy-based Industrie
Chimiche Forestali SpA (‘ICF’),
which produces adhesives and special
textiles for the footwear industry,
the capital injected into ICF will
be used to help the company grow
its business internationally, with a
particular focus on the China market.
China – Salute
Mr Andre Loesekrug-Pietri, the
founder of A CAPITAL (‘A Capital’),
an ardent champion of cross-border
movements between China and
Europe, believes the generous
valuation placed by Asia investors
on Europe-based companies is a
show of faith in the future growth
of the target companies they acquire.
Commenting on the recent buyout of
Ceva Santé Animale, he described the
valuation as “a bubbling 13.3 x of the
2013 EBITDA”.
A Capital rose to fame when
it first invested in France’s Club
Med and brought in China’s Fosun
Group as a strategic co-investor.
Most recently, A Capital completed
another cross-border investment
when it invested €5.0 million in
the Paris-based VIADEO SA
(‘Viadeo’), the leading social
network operator in France. In
toasting the completion of his firm’s
first deal in the digital space by its
A Capital Technology Fund, Mr
Loesekrug-Pietri opined that “for
Western firms to succeed in China,
having a strategic partnership with
an Asian investor at the group level
is a must … and to benefit from the
scale of the Chinese market.” He
pointed to Viadeo as an example
and noted that it is “probably the
only Western digital firm” that
ridiculed Google Inc., eBay Inc. and
Facebook, Inc.
In 2007, Viadeo acquired Tanji.
com (天際網), a local independent
platform. The combination of their
separate presence, one in France and
another in China, has been the factor
behind Viadeo’s success in China.
Although A Capital’s China
Belgium Mirror Fund counts China
Investment Corp. (中國投資有限
責任公司) as its limited partner, Mr
Loesekrug-Pietri made no reference
to his relationship with China’s
sovereign wealth fund.
The recent buyout of Ceva
Santé Animale has a valuation
of “a bubbling 13.3 x of the 2013
EBITDA.”
“For Western firms to succeed
in China, having a strategic
partnership with an Asian investor
at the group level is a must … and
to benefit from the scale of the
Chinese market.”
Mr Andre Loesekrug-Pietri
founder of A CAPITAL
Observation
Mandarin Capital Partner’s decision
to withdraw from China is unlikely to
affect those who are keen to be the
capital bridge between China and other
markets abroad. China’s home-grown
private equity fi rms are following the
state’s agenda with rigour. In the fi rst
half of 2014, they participated in
transaction volume that amounted to
over US$2.5 billion through ten deals.
It is not only the highest half-yearly
amount of cross-border deals, but also
surpassed annual fi gures of previous
years (fi g 3).
Just before the end of June, CDH
Investments (鼎暉投資)(‘CDH’)
became the latest to join the growing
trail of general partner fi rms seeking
Outbound Investments by China-based GPs (2011 – 1H/2014)
NB: the transaction total includes capital from other non-general partner fi rms
China’s Cross-border Mergers & Acquisitions – Inbound and Outbound
(2010 - 2013)
0.8
2.5
In the first half of 2014,
China’s home-grown private
equity firms participate in
outbound transaction volume
that amounts to over US$2.5
billion through ten deals. It is
the highest on record
At the close of 2013, Chinese
companies spend US$50.2
billion on cross-border
mergers and acquisitions, a
64.6% soar compared with
US$30.5 billion recorded in
2010. In contrast, foreign
fi rms invest US$26.9 billion
in China-based assets in 2013
2011 2012 2013 1H/2014
2010 2011 2012 2013
0.5
7.1
12.1 9.5
26.9
30.5
37.1 37.9
50.2
1.4
1.0
Outbound Investment Pending Investment
Count of Year of Investment
Sales Purchases
0
0
0
0.5
1.0
1.5
10
4
2.0
20
8
2.5
30
12
3.0
40
50
16
3.5
60
20
(US$ bn)
(US$ bn)
Fig. 3 Source: ASIA PRIVATE EQUITY REVIEW
Fig. 4 Source: United Nations Conference on Trade and Development
Compiled by: ASIA PRIVATE EQUITY REVIEW
13
16 18
10
China’s M&As in Developed Countries - Selective
Year Chinese Investor Target Company Country Amount
Feb 13 CNOOC Nexen, Inc. Canada 15.1
May 13 Shuanghui Smithfi eld Foods, Inc. USA 4.7
2014 (1) Lenovo IBM’s X86 server business USA 2.3
Motorola Mobile USA 2.9
All amounts in US$ bn
(1)pending
CNOOC = China National Offshore Oil Corp.
Lenovo = Lenovo Group Ltd.
Shuanghui = Shuanghui International Holdings Ltd.
July 2014 | 二零一四年七月號
GC-4
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
assets in Europe. It teamed up
with Temasek Holdings Pte. Ltd.
(‘Temasek’) to log its maiden deal in the
continent, in the estimated €1.5 billion
management buyout of Ceva Santé
Animale. The target company, with
annual turnover of €700.0 million and
3,500 under its employ, is a veterinary
pharmaceutical company that develops
vaccines and pharmaceutical products
for animals.
Significantly, the commitment
to Ceva Santé Animale is the largest
cross-border undertaking participated
by a general partner fi rm. It came only
weeks after Hony Capital unveiled its
co-investment with a pool of strategic
investors to launch a Hollywood Studio
that represents a US$1.0 billion capital
commitment over fi ve years.
On the heels of these deals, in
early July CITIC Capital Partners (
中信資本) has teamed up with Blue
Sea Capital to acquire the US-based
DDS LAB, LLC, a leading full-service
dental laboratory that sells custom
dental prosthetic appliances to dental
service organisations across the US.
By all accounts, outbound
acquisitions by Chinese enterprises
are set to increase. At the close of
2013, Chinese companies had spent
US$50.2 billion on acquisitions (fi g.
4). With a proven track record in
cross-border investing, Mr Forchielli
offered his wisdom on success. “To
invest in know-how or brand-strong
medium-sized European companies
… and help them grow.”
that tracks…..
• cash fl ow of deals completed in Deal Vintage Years since 1998
• for deals completed between 2002 to 2011
- values calculated up to December 2013
-2,221 exits surveyed - US$166.6 billion returned
Benchmark
Market
Overall Fully Realised
IRRs Multiples IRRs Multiples
China 19.1% 2.0x 45.5% 3.2x
India 7.3% 1.3x 32.7% 2.4x
Australasia 7.6% 1.3x 15.8% 1.4x
Japan 9.6% 1.4x 18.6% 1.7x
Source: ASIA PE INDEX Volume IV-No.2
Benchmark
Returns Fully Realised
IRRs 11.2% 27.9%
Multiples 1.5x 2.21x
Source: ASIA PE INDEX Volume IV-No.2
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To order:
• Realised and Unrealised
• Fully Realised
• Deal Vintage Years
The Benchmark Returns for Fund Portfolios
in Asia Private Equity with 2,221 exits calculated by
Volume IV-No.2
Returns of 2002 - 2011 Fund Portfolios
Fund Portfolios Return Results in Asia Private Equity
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-5
ANALYSIS 本期關注
Valuation Surge
Patience and astute financial engineering
of Yageo bear fruit
Seven years ago, Yageo Corp.
(國巨股份有限公司), a leading
electronics components maker in
Taiwan, was identifi ed by Kohlberg
Kravis Roberts & Co. (‘KKR’) as its
maiden investment in the island. The
global investment fi rm had grand plans
for Yageo. It committed to a seven-
year NT$7.5 billion (US$230.0 million
at the then exchange rate) convertible
bond (‘CB’) with zero coupon.
During these seven years, until
the conversion of its CB into Yageo’s
common shares at the beginning
of 2014, KKR neither received
dividends, nor the 30.0% cash rebate
to all equity shareholders that Yageo
undertook back in August 2013.
KKR’s 2011 attempt to help privatise
Yageo also did not materialise.
Although KKR appears to have
lost out on the financial benefits
coming from Yageo, when the latter
completes its 70.0% capital stock (股
本) reduction scheme in the second
half of this year, the value of KKR’s
existing holdings in Yageo would have
almost doubled. On the books, KKR
has made a gross return multiple of
1.9 times (fi g. 5).
Yageo is a showcase of the skills
used by an astute investor group to
ensure continuous appreciation of
its invested capital and the gambit
it engaged in when its privatisation
grand plan failed to materialise.
The Formula
At the time when KKR subscribed
to Yageo’s CB in 2007, the target
company was the world’s largest chip
resistor manufacturer. It was a company
awash with cash. As of 31st December
2007, the cash and cash equivalent in
Yageo stood at NT$8.2 billion (fig.
6). While KKR chose not to receive
any interest payment for its NT$7.5
billion commitment to Yageo, both
parties agreed to lower the conversion
price when other events in addition to
dividend payments took place. This
Key Points
●Value of KKR’s 7-year investment in Yageo, through convertible
bond, has virtually doubled
●KKR has been able to reduce the conversion price of Yageo’s CB
while increases its equity interest in the company due to –
◦Yageo’s dividend payments
◦consistent capital reduction scheme
allowed KKR to increase its implied
equity interest in Yageo (fi g. 7).
By January 2014, when KKR
decided to convert all of its CB into
Yageo’s equity shares, the value of its
original NT$7.5 billion investment
surged to NT$9.6 billion, a 1.3 times
increase. The 691.8 million shares
held by KKR represented 30.9% of
the enlarged share capital of Yageo.
Capital Stock Reduction
Yageo has been employing
capital stock reduction schemes,
particularly since its privatisation
failed to materialise in 2011. Prior to
that, in 2008, 12 months after KKR
had subscribed to Yageo’s CB, Yageo
deployed an aggregate NT$2.4 billion
in purchasing its shares in the open
market, as part of its scheme to reduce
the outstanding shares being traded
on the market. The deployed amount
represented 29.3% of its cash & cash
equivalent as of 31st December 2007.
Selected Financials of Yageo (2006– 2008)
Year Ended 31st December
2008 2007 2006
Sales Revenue 23,352.4 22,831.8 20,790.7
Net Profi t 573.4 2,199.4 1,978.1
Cash & Cash Equivalent 7,354.7 8,191.5 1,801.1
All amounts in NT$ m
Fig. 6 Source: Yageo Corp.
Compiled by: ASIA PRIVATE EQUITY REVIEW
KKR’s CB Conversion Price Adjustment (2007 – Sep/2011)
(1) the three-month average share price
preceding adjustment
(2) after dividend payments
(3) based on agreement between the parties
Conversion Price Market Price(1)
11 Jun 07 11 Jul 08(3) 30 Nov 08(3) 13 Dec 10(2)
22 Jun 07(2) 28 Jul 08(2) 16 Jun 09(2) 26 Sep 11(3)
(NT $)
18
14
10
6
16
12
8
4
2
0
16.1 15.7
12.5 12.2 11.2 11.1
6.0 7.0
11.0 10.5
13.1
10.6 9.9
14.6
13.8
Value Surge (2007 – 2Q/2014)
(1) cost of KKR investment for Yageo’s
convertible bond
(2) value of common shares held by KKR when it
converts its convertible bond in Yageo
(3) value of common shares held by KKR deemed
to be NT$ 20.7 per share, which is the average of
share price since annoucing the 70% reduction
scheme on 11th June 2014
0
2
4
6
8
10
12
14
16
2Q/14Jan 14Jun 07
(NT$ bn)
Value of KKR’s position
1.9x
Fig. 5 Source: Yageo Corp.
Compiled by: ASIA PRIVATE EQUITY REVIEW
7.5(1)
9.6(2)
14.3(3)
Fig. 7 Source: Yageo Corp.
Compiled by: ASIA PRIVATE EQUITY REVIEW
As a result of agreements between both
parties and Yageo’s dividend payments,
KKR has been able to lower its CB
conversion price with Yageo
10.8
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-6
Selected Financials of Yageo (2012 – 1Q/2014)
Year ended
1Q2014 2013 2012
Cash & Cash Equivalent 16,736.3 14,349.8 5,939.9
Other Current Assets 21,453.1 19,546.5 17,425.8
Current Liabilities 16,651.2 21,477.7 7,312.1
Share Capital (NT$10 per share) 22,387.9 15,437.2 22,053.1
All amounts in NT$ m
Fig. 9 Source: Yageo Corp.
Compiled by: ASIA PRIVATE EQUITY REVIEW
The Audacious
Private Plan
Yageo once sought to become a
private company
In April 2011, Kohlberg Kravis
Roberts & Co. (‘KKR’) and the
founder of Yageo Corp. (‘Yageo’)
launched a tender offer to acquire all
of the issued shares of Yageo, which
would have amounted to NT$47.0
billion (US$1.6 billion).
At the point of receiving the
privatisation offer, Yageo boasted
a healthy set of fi nancials. In 2010,
its net profit towered to NT$4.1
billion. This, compared to NT$674.0
million for 2009 is an impressive six-
fold increase.
In June 2011, Taiwan’s Ministry
of Economic Affairs Investment
Commission decided against Yageo’s
privatisation scheme. One of the
Selected Financials of Yageo
(2008 – 2010)
Year ended
31st December
2010 2009 2008
Sales Revenue 28.1 19.8 23.4
EBITDA 8.1 4.4 4.5
EBIT 4.9 1.4 1.4
Net Profi t 4.1 0.7 0.6
All amounts in NT$ bn
Source: Yageo Corp.
Compiled by: ASIA PRIVATE EQUITY REVIEW
reasons was Yageo’s highly leveraged
financing plan in which banks
were committed to providing up
to US$957.7 million to facilitate
the buyout. Assuming Yageo was
to borrow this amount, it would
have represented 3.5 times Yageo’s
latest earnings before interest, tax,
depreciation, and amortisation
(‘EBITDA’). Based on the latest
financials of Yageo, with NT$8.1
billion in EBITDA, its ability to
service its debt payment warranted
regulators’ concern.
But when the proposed
privatisation plan did not receive
approval from the appropriate
regulatory body in Taiwan in June
2011, Yageo launched an aggressive
capital stock reduction plan two years
later. In August 2013, it reduced its
capital stock by 30.0% by rebating all
equity shareholders with NT$3.0 per
share in cash. During the fi rst half
of 2014, Yageo deployed NT$779.6
million in two rounds of share
repurchases. They accounted for 5.4%
of its cash & cash equivalent as of 31st
December 2013 (fi g. 8).
Although KKR, as a holder of
CB, did not profi t from the 30.0%
cash rebate, the overall capital
stock reduction scheme has in fact
benefitted the global investment
fi rm. As a result of Yageo actively
scaling down its capital stock, KKR
was able to increase its implied
equity interest. As such, when KKR
converted its CB into Yageo’s equity
shares in January this year, its equity
ownership was increased from the
original 16.1% to 30.9% while its
value of investment had increased
by around 30.0%.
Yet the biggest capital return to
KKR shall be coming from Yageo’s
70.0% capital reduction scheme that
was announced on 11th June 2014.
In this proposed largest reduction
of capital stock undertaken by a
corporation in Taiwan, Yageo will
reduce its capital stock from NT$22.0
billion to NT$6.6 billion by payingout
NT$15.4 billion to its equity investors.
This ambitious cash payout shall
deploy 92.0% of its cash & cash
equivalent as of 31st March 2014 (fi g.
9). As a 31.5% shareholder, KKR
will receive NT$4.8 billion. The
value of investment shall surge to
NT$14.3 billion.
Comments
While Yageo has pretty much idle
cash in its book, without damaging
the future business operation, the
capital reduction will effectively boost
Yageo’s earnings per share by more
than three-fold. It will also improve
other earning indicators such as return
on equity. All of these have built a
foundation of value surge that shall
be enjoyed by all equity shareholders
of Yageo, including KKR.
Yageo’s Major Capital Reduction Events (Apr/2008 – 4Q/2014)
Cash payment for the events:
Dividend payment Repurchase of shares from open market
30.0% reduction of capital with NT$3.0 cash distribution per share
pending 70.0% reduction of capital with NT$7.0 cash distribution per share
35%
30%
25%
20%
15%
0
-600
-1,200
-300
-900
-1,500
-6,000
-15,000
11 Jun
07
28 Jul
08
09 Aug
13
21 Apr
08
13 Dec
10
13 May
14
22 Jul
07
20 Jul
09
10 Jan
14
29 Jun
08
26 Sep
11
04 Jul
14
4Q/
2014
20.8%
23.4% 23.8%
30.9% 31.5% 31.5%
16.1%
1,211.2
974.5
687.8
219.5 329.5 220.5 186.8
592.8
223.9
6,615.9
15,395.1
1,450.9
(NT$ m)
Fig. 8 Source: Yageo Corp.
Compiled by: ASIA PRIVATE EQUITY REVIEW
Of this amount,
KKR will receive
NT$ 4,842.6 m
KKR’s implied equity
interest in Yageo
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-7
CASE STUDY 案例研究
The Baring Wood
China Forestry deep in its financial plight
It has been more than 40 months
since the shares of China Forestry
Holdings Co., Ltd. (中國森林控
股有限公司)(‘China Forestry’)
were suspended from trading by
regulators of the Stock Exchange
of Hong Kong (‘SEHK’). For both
The Carlyle Group (‘Carlyle’) and
Partners Group, which invested
an aggregate US$85.0 million into
China Forestry in the period from
2007 to 2009, the woods of China
Forestry have been starved of capital
and its once lush foliage is now
thinning. In June this year, China
Forestry defaulted on the interest
payment of a US$180.0 million
senior note that is due to mature by
November 2015. This followed China
Forestry’s inability to present its 2013
annual fi nancials on time, after three
requests to delay publication of
the account.
Key Points
●China Forestry defaulted on the interest payment of a US$180.0 million
senior note in June this year, after the failure to present its 2013 annual
financials on time.
●A huge portion of China Forestry’s net profit between 2006 and 2009
was actually unrealised gain due to a surge in the fair value of its
plantation assets.
●The plunge of China Forestry’s cash coffers from Rmb2.8 billion in
2010 to only Rmb236.2 million in June 2013 has deteriorated its ability
to service debt obligations.
Figs. 10 & 11 Source: China Forestry Holdings Co., Ltd.
Graphic: ASIA PRIVATE EQUITY REVIEW
Watering China Forestry (2007 – 2009)
The Lush Forest
China Forestry was founded in
2003 when Beijing decided to invite
the private sector to help the country’s
forestry development. It had the perfect
business matrix. It was among the largest,
privately held, naturally regenerated
plantation forest operators in China. Its
then chairman, Mr Li Kwok-cheong (李國
昌), was a member of the State Council’s
China Council for the Promotion of
Environment and Forestry.
Carlyle fi rst invested in China Forestry
in 2007 for US$40.0 million. Six months
later, in June 2009, it teamed up with Partners
Group, the global private investment fi rm,
and injected a further US$45.0 million
into China Forestry. Altogether, the two
investment fi rms committed an aggregate
US$85.0 million (fi g. 10).
In the years preceding its 2009 debut
on the SEHK, China Forestry had
been posting a positive “net profi t with
unrealised gain”. But a huge portion
of said positive net profi t was actually
Financials of China Forestry (2006 - Jun/2009)
6 months ended Full year ended Dec
30th Jun 09 2008 2007 2006
Changes in fair value of plantation
assets less costs (1) 518.9 6,024.4 798.5 350.5
Net profi t with unrealised gains (2) 432.1 5,881.8 783.7 339.8
Net profi t without unrealised
gains (3) (86.8) (142.6) (14.8) (10.7)
All amounts in Rmb m
N.B.:
(1) unrealised gains from fair value changes of plantation assets less costs
(2) changes in fair value of plantation assets less costs taken into account
(3) changes in fair value of plantation assets less costs not taken into account
a large portion of China Forestry’s
positive net profi t is actually the
unrealised gain due to surge in fair
value of its plantation assets. After
removing such unrealised gain, it is
in fact suffering losses
unrealised gain due to a surge in the
fair value of its plantation assets. After
removing such unrealised gain, China
Forestry actually recorded a loss during the
period (fi g. 11).
In late 2009, China Forestry was
listed on the SEHK, offering its shares
at HK$2.07 (US$0.27) each. It then
boasted a market capitalisation of
HK$11.0 billion.
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-8
Figs. 12 & 13 Source: China Forestry Holdings Co., Ltd.
Graphic: ASIA PRIVATE EQUITY REVIEW
The Withering Forest
Ironically, it was not China Forestry’s
fi nancial health that caused its shares to
be suspended from trading in January
2011; rather it was the alarm voiced by
its auditor. KPMG indicated that it had
identifi ed “possible irregularities” when
it audited China Forestry’s 2010 books.
Coincidentally, two weeks before KPMG
drew public investors’ attention, China
Forestry’s then chief executive offi cer,
Mr Li Hanchun (李寒春), sold a parcel
of his own shares in China Forestry
for HK$398.2 million. In the following
month, the Hong Kong’s Securities and
Futures Commission (證券及期貨事
務監察委員會)(‘SFC’) sought a court
order to freeze Mr Li’s assets of the same
amount.
Soon, Mr Li was detained in China
for embezzlement of funds. The most
devastating news to China Forestry’s
investors was the colossal depletion
of cash and cash equivalent from the
company’s coffers. At the close of China
Forestry’s fi nancial year in 2010, which
ends in December, the company had
Dwindling Cash Coffers (2010 – Jun/2013)
Financials of China Forestry (2009 - Jun/2013)
6 months
ended June Full year ended Dec
June 2013 2012 2011 2010 2009
Turnover 101.0 144.0 392.3 1,064.0 793.7
Cash and cash equivalent 236.2 395.9 749.6 2,784.7 1,706.6
Finance cost on loan (61.9) (125.5) (177.0) (25.8) (78.4)
Interest-bearing
borrowings (1,140.5) (1,177.0) (1,124.8) (1,948.9) 0
All amounts in Rmb m
the rapid depletion of cash
from China Forestry is due to
the acquisition cost as well as
increased receivables
the reduced turnover, along
with steady interest bearing
borrowings, have weighed on
China Forestry’s fi nancial health
China Forestry’s Debt Repayment Schedule (2011 – Jun/2013)
6 months Full year ended Dec
June 2013 2012 2011
Within 1 year 39.8 70.0 0
2 to 5 years 1,100.7 1,107.0 1,124.8
Total debt outstanding 1,140.5 1,177.0 1,124.8
All amounts in Rmb m
Fig. 14 Source: China Forestry Holdings Co., Ltd.
Graphic: ASIA PRIVATE EQUITY REVIEW
Rmb2.8 billion (US$422.5 million) in
cash or the equivalent in its vault. But this
amount was slashed to Rmb749.6 million
in the following year when suspension of
China Forestry’s shares was in force. The
last fi nancials disclosed by the embattled
forestry company posted only Rmb236.2
million in cash as of June 2013, a fraction
of that boasted by China Forestry back
in 2010. Added to this, China Forestry
was also shouldering an Rmb1.1 billion
interest-bearing loan (fi gs. 12 & 13).
Comments
Investors have been patient with
China Forestry. Forty-two months
into its trading suspension, and
even after its recent default on the
semiannual interest payment on the
US$180.0 million loan, which has an
annual interest rate of 10.25%, China
Forestry has not received any demand
from note holders to repay the
principal. In the coming 12 months,
it also shall face an Rmb39.8 million
debt obligation (fi g. 14).
China Forestry is now considering
various options to restructure its
indebtedness, including repurchasing
the outstanding senior notes to reduce
its interest expense. In November 2013,
it offered to purchase the outstanding
notes through a combination of cash
and share warrants, but has yet to
receive the necessary percentage of
acceptance needed to validate the offer.
In June this year, after announcing
its default, China Forestry further
extended the notes repurchase offer
to December this year.
In the meantime, both Carlyle and
Partners Group can only hope China
Forestry will soon resume its trading
before its trees wither after years of
capital drought.
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-9
NEWS 動態透視
■The Football Club in China
China’s retailers have exhibited an unusual fervour
for football, with three of the country’s largest consumer
products sellers having recently acquired interests
in football.
Alibaba Group Holding Ltd. (阿里巴巴集團控
股有限公司)(‘Alibaba’), China’s largest e-commerce
company which is due to be listed on the New York
Stock Exchange in August, recently agreed to take a
50.0% stake in Guangzhou Evergrande Football Club
(廣州恆大足球俱樂部). The latter was the winner
of last year’s Asian Champions League. Alibaba paid
Rmb1.2 billion (US$192.0 million) for its equity interest.
Soon after, China’s two largest home appliances
retailers followed Alibaba’s footsteps.
Suning Commerce Group Co., Ltd. (蘇寧雲商集
團股份有限公司)(‘Suning’) announced its strategic
partnership with FC Barcelona, a famous sports club
based in Barcelona, Spain. The cooperation includes a
series of social and sporting projects, such as marketing,
image association rights, digital assets, and promotion
of sport among Chinese youngsters.
The partnership marks the fi rst Chinese sponsor
invited by FC Barcelona. Suning’s share price surged
by 7.1% on the day Li Bin, the CEO of operational
headquarters of Suning, revealed the cooperation with
FC Barcelona, two days before the announcement
was made.
Suning’s archrival, Gome Electrical Appliances
Holdings Ltd. (國美電器控股有限公司), recently
completed the acquisition of Dalian Aerbin FC (大連
阿爾濱足球俱樂部), a football team based in Dalian,
which shall move its headquarters to Beijing.
■P2P Loans to Come under Scrutiny
China’s peer-to-peer (P2P) industry will soon come
onto the regulator’s radar screen. According to Caixin
(財新), a domestic fi nancial publication, the country’s
banking regulatory body is drafting the fi rst blueprint for
P2P fi nancing. While such operations are not regarded as
fi nancial institutions, they fall under the private lending
category. The impending regulation is expected to
rein in the P2P loan industry which has mushroomed.
According to iResearch (艾瑞諮詢集團), a consulting
fi rm on online operations in China, in 2013, loans issued
through the P2P platform reached Rmb68.1 billion
(US$11.1 billion), a staggering three times the Rmb22.9
billion for the preceding year. P2P is part of the shadow
banking industry.
Hong Kong-based Morningside Ventures is
confident that P2P financing shall be a principal
source of capital for companies. It recently took a
stake of Yooli.com (有利網), an online peer-to-peer
fi nancing platform that was founded in 2013. Since
being formed, Yooli.com attracted interest from SB
China Venture Capital (軟銀中國資本), in addition
to Morningside Ventures.
Haitong Capital, the direct investment vehicle of
Haitong Securities Co., Ltd., has led a series C fi nancing
of 91JinRong.com Inc. (‘91JinRong’), an online fi nancial
services provider, with participation by existing investors
Matrix Partners China and China Broadband
Capital Partners. Beijing-based 91JinRong offers loan
services, fi nancial management and insurance services.
All transaction sums were not disclosed.
P2P lending is certainly garnering interest from venture
investors. Sequoia Capital recently teamed up with the
Hong Kong-listed TOM Group and invested US$14.0
million in WeLab Ltd., which operates WeLend.hk.
■ Formosa Plastics Waits for
Gala TV’s Screen
Formosa Plastics Group (台塑關係企業)(‘Formosa
Plastics’) continues to wait for regulatory approval for
its acquisition of EQT Partners’ interest in Gala TV
Corp. (八大電視股份有限公司)(‘Gala TV’). After a
regulatory road block, Formosa Plastics is understood
to have signed a new contract with EQT Partners and
will resubmit a new set of documents to the Investment
Commission, MOEA (經濟部投審會), for approval.
In April this year, Formosa Plastics announced its
plans to acquired Gala TV for between NT$4.0 billion
and NT$6.0 billion (US$132.7 million to US$199.1
million). The takeover was rejected by the National
Communications Commission Taiwan (台灣國家通
訊傳播委員會) as government-affi liated interest is
found in a number of this conglomerate’s subsidiaries,
a factor that prohibited Formosa Plastics from acquiring
Gala TV.
Formosa Plastics now reportedly intends to acquire
Gala TV through a separate private holding company.
The new approach refers to The Carlyle Group’s
(‘Carlyle’) sale of kbro Ltd. (凱擘股份有限公司)
(‘kbro’) to Fubon Financial Holding Co., Ltd. (富邦金融
控股股份有限公司)(‘Fubon’) in 2010. To circumvent
the regulatory barrier, Fubon created a separate private
holding company, with no affi liation with Fubon, to
hold an 80.0% interest of kbro (fi g. 15). As a result, it
took Carlyle 14 months to sell its majority interest in
the cable television operator and broadband internet
services provider to Fubon.
The Tsai Family & kbro (Nov/2010)
Fig. 15 Source: National Communications Commission
Graphic:
ASIA PRIVATE EQUITY REVIEW
Sheng Ting Co., Ltd.
kbro Co., Ltd.
Da Fu Media Co., Ltd. PX Capital Partners B.V.
The Carlyle Group
100.0%
20.0%
100.0%
acquires 80.0% for around
NT$60.0 bn
Daniel Tsai &
Richard Tsai
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-10
Key Points
●The parent company of JD Capital Co., Ltd. became the first China private
equity firm to have a quoted status.
●Limited partners (‘LPs’) of JD Capital gained access to liquidity through
the transfer of their interest in funds managed by JD Capital to equity
holding of the listed entity.
●JD Capital’s LPs enjoy both liquidity as well as entitlement to management
fees and profit distribution as a result of this structural overhaul.
FUNDS 基金動向
In Search of Liquidity
LPs seek access to liquidity in tradable
fund management firm
To a pool of limited partners of
funds managed by JD Capital Co.,
Ltd. (九鼎投資管理有限公司)
(‘JD Capital’), illiquidity and long-term
commitments are taboo. In late April,
Beijing Tongchuangjiuding Investment
Management Co., Ltd. (北京同創九
鼎投資管理股份有公司)(‘Beijing
Jiuding’), the parent company of JD
Capital, became the fi rst private equity
investment holding company to be
transformed from an unlisted to a listed
private equity fund management fi rm. It
was listed on China’s National Equities
Exchange and Quotations (全國中小
企業股份轉讓系統), also known as
the New Third Board (新三板)(‘Board’),
an equity exchange platform started in
January 2013 that utilises a transfer by
quotation approach between buyers
and sellers (fi g. 16).
Beijing Jiuding’s debut has enabled
its shareholders to achieve instant
liquidity. Its robust transaction volume,
since being listed, speaks volumes to
the effectiveness of Beijing Jiuding’s
quoted status. Since mid-May, Beijing
Jiuding took the crown as the most
heavily traded stock on the Board. As
an illustration, the transaction volume
of Beijing Jiuding in May amounted
to Rmb815.7 million (US$132.2
million) and accounted for 88.2% of
the overall transaction volume of the
Board for the month. In addition,
Beijing Jiuding’s share price has been
on the rise. At the close of 23rd
June, its shares closed at Rmb 800.0
each, well above the offer price of
Rmb610.0 each (fi g. 17).
Its forthcoming private placement
is set to further shore up its capital
pool by an additional Rmb2.3 billion.
Achieving Liquidity
Formed in 2007, JD Capital is an
established name in China’s private
equity market, with Rmb26.4 billion
of assets under management as of
October 2013. Prior to taking on
quoted status, Beijing Jiuding had 11
investors. Through the issuance of
new shares, it enlarged its pool of
investors to 142 to mainly include
management of JD Capital and limited
partners (‘LPs’) of funds managed by
JD Capital. In preparation for Beijing
Jiuding’s change to listed status, the
LPs transferred their interests in
funds managed by JD Capital into an
equity interest in Beijing Jiuding. In its
public offering, Beijing Jiuding issued
5.79 million shares that represented
Rmb3.5 billion.
In late June, Beijing Jiuding
announced to issue a further Rmb2.3
billion of shares via private placement,
making the total amount it raised to
Rmb5.8 billion. The issuance price
of Rmb750.0 per share is a 23.0%
increase compared with the Rmb610.0
per share back in late April, indicating
a warm reception from investors.
For the LPs and strategic
investors that had earlier committed
to funds managed by JD Capital,
transferring their interest to the
quoted Beijing Jiuding has provided
them the conduit to liquidity through
which they can pursue return of
their commitments in accordance
with their own time schedules.
Added to this, the limited partners
of JD Capital’s funds are no longer
passive equity investors, but can also
Dossier of Listing of Beijing Jiuding (Apr /2014)
Beijing Jiuding = Beijing Tongchuangjiuding Investment Management Co., Ltd.
JD Capital = JD Capital Co., Ltd.
Tongchuangjiuding
Investment
Consulting Co.
Lhasa Jiuding
Investment
Management Co.
Beijing Jiuding
(listed on New
Third Board)
141 investors
Tongchuangjiuding
Investment Holding
JD Capital
21 wholly-owned subsidiaries
14 majority-owned companies
1 fully-sponsored fund
2 majority-owned funds
58.9% 41.1%
100.0% 99.2% 100.0%
LPs of JD Capital’s funds transfer
their interest to equity interest of
Beijing Jiuding, which is then listed
on the New Third Board
Fig. 16 Source: Beijing Tongchuangjiuding Investment Management Co., Ltd.
Graphic: ASIA PRIVATE EQUITY REVIEW
Key points of the listing:-
• first quoted private equity firm
in China
• Beijing Jiuding enjoys instant fi nancial
boost of its shareholders’ equity and
debt to asset ratio
• provides liquidity for limited partners
(‘LPs’) of JD Capital, which can divest
shares of Beijing Jiuding in accordance
with their own time schedule
• LPs of JD Capital no longer act as
passive equity investors, but can also
enjoy management fees and profit
distribution arising from JD Capital’s
portfolio companies
• downside protection to shareholders:
Beijing Jiuding will compensate
investors if, after three years, its share
price could not reach a certain pre-
determined threshold
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-11
Trading Price of Beijing Jiuding (May – Jun/2014)
Beijing Jiuding = Beijing Tongchuangjiuding Investment Management Co., Ltd.
Changes in Beijing Jiuding after Listing
Before listing After listing(1)
Business Structure
Core Businesses • manage private equity funds
and investments
• generate income mainly via
management fee
• manage private equity funds
and investments
• management fee still accounts
for majority of income, but
investment income will rise
signifi cantly as Jiuding now
owns substantial portion of
its fund pool
No. of investors 11 investors 142 investors
Jiuding’s capital
contribution to its
managed equity funds
Rmb200.0 million Rmb3.9 billion
Jiuding’s own
contribution in its total
fund pool (%)
1.2% 22.9%
Financials
Total assets (Rmb m) 678.0 4,214.7
Total shareholders’
equity (Rmb m) 92.2 3,629.0
Net assets per share
(Rmb/share) -0.33 202.9
Current ratio (times) 0.62 2.46
Debt to asset ratio (%) 97.95% 11.77%
(1) up to 29th Apr, 2014
Beijing Jiuding = Beijing Tongchuangjiuding Investment Management Co., Ltd.
enjoy management fees and profi t
distribution arising from JD Capital’s
portfolio companies (fi g. 18).
Financial Boost &
Downside Protection
Beijing Jiuding enjoyed an instant
financial boost after its listing in
late April. Its shareholders’ equity
ballooned by 39-fold, from Rmb92.2
million to Rmb3.6 billion (US$15.0
million to US$588.6 million). In
addition, the listing improved Beijing
Jiuding’s debt-to-asset ratio, which
reduced from 97.95% prior to the
listing to 11.77% after the listing.
This was achieved through concerted
efforts between investors of Beijing
Jiuding as well as management of
JD Capital.
For JD Capital’s LPs, the listing
terms of Beijing Jiuding also provide
downside protection. In any event,
if after three years Beijing Jiuding’s
share price does not reach a certain
pre-determined threshold, it will have
to provide compensation to investors.
The arrangement seems to be perfect
for all parties.
Comments
The listing of Beijing Jiuding
coincides with the New Third Board’s
initiatives to improve its market fl ow
and transaction modes. After one-
and-a-half years of operation, the
board recently unveiled regulations
on requirements to be a market maker
on the board. The market maker
transaction mode is expected to be
implemented by August this year,
and shall help boost market fl ow of
the exchange.
China’s private equity investors have
been astutely seeking opportunities in
the New Third Board market since
its inauguration in early 2013. As
of June this year, no less than fi ve
private equity funds were launched
to specifi cally target the exchange. In
May, GTJA Innovation Investment
Co., Ltd. (國泰君安創新投資有限
公司)(‘GTJA Innovation’) teamed
up with various domestic firms to
launch the Rmb100.0 million (US$16.2
million) GTJA Innovation Investment
New Third Board Equity Investment
Fund (LP). The fund will invest
in small and medium enterprises
either listed or planned for listing on
Funds Targeting New Third Board Companies (2012 – Jun/2014) – Selective
Date Fund Name Size
May 14 GTJA Innovation Investment New Third Board Equity
Investment Fund (LP) 100.0
Jan 14 Ping An Securities New Third Board Investment Fund (1) 100.0-200.0
Dec 13 Gansu Jincheng New Third Board Equity Investment Fund 1,000.0
Dec 12 Qingdao Goldstone Haorui Investment Co., Ltd. N/A
Nov 12 Wuhan Guanggu New Third Board Equity Investment Fund
Partnership (LP) 500.0
All amounts in Rmb million
(1) prepared to be launched
Fig. 18 Source: Beijing Tongchuangjiuding Investment Management Co., Ltd.
Compiled by: ASIA PRIVATE EQUITY REVIEW
Fig. 17 Source: National Equities Exchange and Quotations
Graphic: ASIA PRIVATE EQUITY REVIEW
Fig. 19 Source: 21st Century Business Herald
Compiled by: ASIA PRIVATE EQUITY REVIEW
the exchange. In January, Ping An
Securities Ltd. (中國平安証券有限
公司) is said to be planning a New
Third Board fund with a target size
of between Rmb100.0 million and
Rmb200.0 million (fi g. 19).
In China, the largest private equity
market in Asia, a new set of parameters
is being minted for illiquid long-term
investing.
19 May14 23 May14 29 May14 5 Jun14 11 Jun14 17 Jun14 23 Jun14
0
200
400
600
800
1,000
1,200
(Rmb)
Since June, Beijing Jiuding has been
trading at a premium above its offer
price of Rmb610.0 per share
Trading Price Offer Price
610 Rmb
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-12
Anatomy of Weicon’s Buyout
INVESTMENTS 投資聚焦
The Financier
CDH takes a dual role in its
latest acquisition
Endowed with a new pool of
capital following the recent closing
of its latest fund at US$2.5 billion,
China’s CDH Investments (鼎暉投
資)(‘CDH’) has the necessary capital
for it to be both an equity investor
as well as a loan provider. In the
takeover of Shanghai Weicon Optical
Co., Ltd. (上海衛康光學眼鏡有限
公司)(‘Weicon’), CDH is to partner
with the Hong Kong-listed China
Grand Pharmaceutical and Healthcare
Holdings Ltd. (遠大醫藥健康控股
有限公司)(‘CG Pharma’) as an equity
investor. It shall also be the financier
of CG Pharma in this acquisition
(fig. 20).
Key Points
●CDH provides both equity and loan in the buyout of Weicon.
●Weicon showcases CDH’s savvy investment structure, in which CDH –
◦leverages on CG Pharma’s expertise
◦strengthens its relationship with CG Pharma by providing funds for
the latter’s acquisition of Weicon and
◦prepares its exit from Weicon through a put option.
99.6% 19.0%
52.25%
28.8%
CG Pharma intends to finance
its US$57.8 million acquisition of
Weicon through –
• internal funding
• proceeds of CB issued to CDH
Investments and another investor
Convertible Bonds to CDH
Issuer: CG Pharma
Subscription: HK$300.0 million (US$38.7 million)
Conversion price: HK$1.35 per share
Interest rate: 3.0% p.a.
Maturity: Five years
AIM Global
• to reduce its holdings
in Weicon from
100.0% to 28.75%
CG Pharma (SEHK-listed)
• acquisition to be executed
through Grand Pharm (China)
• to issue HK$300.0 million
CB to CDH to fi nance the
acquisition
CDH Investments
• US$21.0 m for a 19.0%
stake in Weicon
• subscribes to CG
Pharma’s HK$300.0
million CB
Grand Pharm (China)
• to assume a 52.25% interest
in Weicon for US$57.8 m
Weicon
• valued at US$110.5 m
Financials of CG Pharma (2012 – 2013)
Year ended Dec
2013 2012
Turnover 2,658 2,059
Profi t of the year 105 105
Cash and cash equivalents 250 305
Total bank borrowings 1,658 1,421
All amounts in HK$ m
Figs. 20 & 21 Source: ASIA PRIVATE EQUITY REVIEW
The Buyout
• CDH and Grand Pharm
(China), a subsidiary
of CG Pharma, are to
acquire a 71.25% stake in
Weicon from AIM Global,
the existing shareholder,
for US$78.8 million
• Upon satisfying certain
corporate milestones
which are expected to take
place after 2016, CDH
and CG Pharma will inject
an additional US$15.0
million into Weicon for
additional 3.5% interest
The Strategic Assets
The Shanghai-based Weicon is
a manufacturer of cardiovascular
medicines and antibiotics that is
currently owned by AIM Global
Holdings Ltd. (世標控股有限公
司). To CG Pharma, which is engaged
in the development, manufacture
and sale of bulk pharmaceuticals,
and pharmaceutical intermediates
and preparations, Weicon will
enhance its existing ophthalmic
products. But CG Pharma does not
have sufficient funds to take over
Weicon, which is being valued at
US$110.5 million.
The Deal Finances
In order for CG Pharma to take a
52.25% equity position in Weicon, it
would need to mobilise US$57.8 million.
But for the year ending December
2013, its cash and cash equivalent
stood at HK$249.8 million, or US$32.2
million. There is therefore a US$25.6
million shortfall if CG Pharma were to
finance the acquisition solely by its own
financial resources (fig. 21).
CDH is to provide the shortfall of
funds by subscribing to a HK$300.0
million (US$38.7 million) convertible
bond that shall be issued by CG
Pharma. The instrument has a five-
AIM Global = AIM Global Holdings Ltd.
CB = convertible bonds
CDH = CDH Investments
CG Pharma = China Grand Pharmaceutical and
Healthcare Holdings Ltd.
Grand Pharm (China) = Grand Pharm (China) Co., Ltd.
Weicon = Shanghai Weicon Optical Co., Ltd.
CG Pharma needs
US$57.8 million to take a
52.25% interest in Weicon.
But the HK$249.8 million
or US$32.2 million would
mean a shortfall of
US$25.6 million
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-13
年
七月號
Anatomy of Weicon’s Buyout
(con’d)
year tenor and a 3.0% coupon. CDH
and CG Pharma may invest a further
US$15.0 million into Weicon if the
latter meets prescribed milestones.
In this buyout of Weicon, CDH is
taking a lesser role by assuming a 19.0%
interest in Weicon for US$21.0 million.
Comments
The investment in Weicon offers a
multitude of opportunities for CDH.
In addition to being able to leverage on
CG Pharma’s operational expertise, it
will be able to co-control Weicon with
CG Pharma. Although CDH shall be
a minority shareholder, its interest in
Weicon shall be strengthened through
the convertible bond subscription.
For CDH’s limited partners, the
investment in Weicon shall generate
immediate cash flow as the HK$300.0
million convertible bond will return an
annual interest payment of HK$9.0
million (fig. 22).
The takeover of Weicon is a showcase
of the level of maturity attained by
China’s leading general partner firms
when crafting their investment structure
for the desired assets.
INVESTMENTS 投資聚焦
The Lodgers
China’s travel industry is attracting
capital from long-term investors
Legend Holding Co., Ltd. (聯
想控股股份有限公司) (‘Legend’)
believes the travel industry in China
shall be one of the industries that
will continue to enjoy robust growth,
despite the economic slowdown in the
country. Through two of its private
equity investment divisions, Hony
Capital (弘毅投資) and Legend
Capital (君聯資本), each has taken
a stake in lodging assets. Hony
Capital, the buyout investment arm
of Legend, is taking a minority stake
in Shanghai Jinjiang International
Hotels Development Co., Ltd.
(上海錦江國際酒店發展股份有
限公司)(‘Jinjiang’). It shall deploy
Rmb1.5 billion (US$245.3 million)
for a 12.4% stake in Jinjiang after
the investment.
Shanghai-listed Jinjiang owns
and operates both luxury and budget
hotels across China. Hony Capital
has invested through its Rmb 8.0
billion domestic currency fund.
Legend Capital, which focuses on
small transactions, led in the US$15.0
million series B fi nancing of Xiaozhu.
com (小猪短租網)(‘Xiaozhu’). The
latter is a short-term accommodation
platform. It had earlier raised
capital from Hong Kong-based
Morningside Ventures.
Established in 2012, Beijing-
based Xiaozhu is a website for people
to list and book unique lodgings.
It has counted Morningside as an
investor since 2013.
A pool of investors share
Legend Capital’s assessment of
the travel lodging industry.
GGV Capital (紀源資
本), Qiming Venture
Partners (啟明創投),
China Broadband Capital
(中國寬帶產業基金), CDH
Investments (鼎暉投
資), as well as Lightspeed
China Partners (光速安
振中國創業投資) have invested
US$100.0 million in Tujia.com (途家
網). It is by far one of the largest sums
ever invested in a vacation lodging
business in China.
Founded in 2011, Beijing-
based Tujia.com is a vacation rental
platform that offers searching
and booking services for vacation
apartments. Tujia.com had earlier
raised an aggregate Rmb400.0 million
(US$64.0 million) from this pool of
investors. In this most recent round
of fi nancing, Tujia.com successfully
enlisted two strategic investors, Ctrip.
com International Ltd. (攜程旅行網)
and HomeAway, Inc.
AIM Global = AIM Global Holdings Ltd.
CB = convertible bonds
CDH = CDH Investments
CG Pharma = China Grand Pharmaceutical and
Healthcare Holdings Ltd.
Grand Pharm (China) = Grand Pharm (China) Co., Ltd.
Weicon = Shanghai Weicon Optical Co., Ltd.
Deal Analysis
Downside protection
• Adjustment of consideration
◦The investors agree on a set of
benchmark net profi t, equity and
revenue needed to be achieved by
Weicon. If only 70.0% and 90.0%
of the target benchmark is achieved,
the purchase consideration will be
adjusted downwards
◦If the fi nancials are less than 70.0%
of the benchmark fi nancials, both
seller or CG Pharma have the right
to terminate the deal
• Put option
◦CDH is granted put option that
after the closing of the deal to until
2018, CDH has the right to ask CG
Pharma to purchase all or a portion
of CDH’s investment in Weicon at
an agreed price
Upside potential
• CDH can benefit from the CB
investment if the share price of CG
Pharma rises. The conversion price
of HK$1.35 per share represents
around a 15.5% discount to the closing
price of CG Pharma prior to the
announcement, at around HK$1.56
Instant cash return
• CDH is entitled to a 3.0% coupon
per annum of the CB, effectively
generating immediate cash fl ow from
this investment
Fig. 22 Source: ASIA PRIVATE EQUITY REVIEW
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-14
INVESTMENTS 投資聚焦
For the Health of
the Nation
Investors are pouring capital into the
healthcare segment
By 2020, China’s healthcare sector
is expected to be a US$1.0 trillion
market, according to McKinsey & Co.
The world’s most populous nation,
with its rapidly aging population, has
emerged as one of the most attractive
healthcare markets on the globe.
Currently, it is the third largest in the
world and has been attaining double
digit growth. Private equity investors
have been catching this healthcare
train in order to enjoy the robust ride.
The US$78.8 million committed
by CDH Investments (鼎暉投資)
(‘CDH’), along with the Hong Kong-
listed China Grand Pharmaceutical
and Healthcare Holdings Ltd. (遠
大醫藥健康控股有限公司)(‘CG
Pharma’), to acquire a majority
interest in Shanghai Weicon Optical
Co., Ltd. (上海衛康光學眼鏡有限
公司)(‘Weicon’) is the largest for a
China-based healthcare company.
Weicon is a high-end contact lens
maker. In this deal, CDH is to co-
control Weicon with CG Pharma. Its
portion in Weicon would represent a
US$21.0 million cheque. Both CDH
and CG Pharma have also earmarked
an additional US$15.0 million for
Weicon when the latter has satisfi ed
certain pre-determined milestones.
SIG China is another private
equity group that has entered into the
healthcare management space, albeit
its Meet You (美柚) solely targets
females. Meet You is a mobile app with
features of menstrual management as
well as health management for female
users. Teaming up with Meet You’s
existing investors, Matrix Partners
China and China Renaissance K2
Ventures (險峰華興), SIG China
led in the US$35.0 million fi nancing
of Meet You.
China’s robust healthcare market
is even enticing venture investors
to loosen their purse strings and
make generous allocations to
promising companies.
Legend Capital (君聯資本)
invested around Rmb100.0 million
(US$16.3 million) in Shanghai Aohua
Photoelectricity Endoscope Co.,
Ltd. (上海澳華光電內窺鏡
有限公司), which is engaged
in the research, development,
manufacture, and sale of
innovative endoscopic devices.
Qiming Venture Partners
(啟明創投) also enlisted its name in
the healthcare sector. It teamed up
with Taifu Capital (泰福資本) and
committed over US$10.0 million to
Shanghai Sanyou Medical Devices
Co., Ltd. (上海三友醫療器械有限
公司), which focuses on orthopaedic
implants and instruments.
The Shanghai-based Milestone
Capital (麥頓投資) is broadening
its geographic focus in search of
healthcare assets. It recently crossed
the Taiwan Strait and led in the
US$35.0 million fi nancing of JHL
Biotech, Inc. (喜康生技股份有限公
司), an emerging biopharmaceutical
company on the island. In addition
to KPCB China, Milestone Capital
enlisted a marquee group of Taiwan
venture capitalists and individuals to
join in this investment. They include
International Development Corp.
(統一國際開發股份有限公司),
Fubon Financial Holdings (富邦
金融控股公司), Taishin Financial
Holdings (台新金融控股公司),
China Development Industrial
Bank (中華開發工業銀行), and
Biomark Capital. (fi g. 23)
Healthcare Sector
Investment Pace (1H/2011 – 2014)
93.8
146.9
800
400
600
200
700
300
500
100
0
Amount pending
(US$ m)
1H/2011 1H/2012 1H/2013 1H/2014
268.8
672.0
767.1
Fig. 23 Source: ASIA PRIVATE EQUITY REVIEW
INVESTMENTS 投資聚焦
GIC Special Investments and
Olympus Capital Holdings Asia
(‘Olympus’) have led a series C round
of fi nancing in Huaxia Dairy Farm
Ltd. (華夏畜牧有限公司)(‘Huaxia
Dairy’), a milk producer, together
with existing investors including
Grand River Capital (大河資
本). The transaction amount was
US$106.0 million. Together with the
latest round of fi nancing, Olympus
has invested US$108.0 million
in Huaxia Dairy and becomes its
largest shareholder.
Established in 2004, Sanhe-based
Huaxia Dairy provides milk to major
dairy products companies in China,
as well as producing self-owned
milk brands.
Warburg Pincus has invested an
additional US$50.0 million in ANE
Logistics (安能物流有限公司),
following its fi rst commitment to the
company in January this year.
Founded in 2010, ANE Logistics
currently owns 50 logistics centres and
provides courier and logistics services.
The company has counted Sequoia
Capital China as an investor since
early 2013.
China Media Capital (華人
文化產業投資基金) has invested
Rmb200.0 million (US$32.5 million)
in Gewara (格瓦拉生活網).
Founded in 2008, the latter
provides online movie ticket
booking services. Gewara has
counted Shanda Capital (盛大資
本) and CDH Investments (鼎暉
投資) as investors since 2010 and
2011 respectively.
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-15
DIVESTMENTS 資金套現
IPO Train in HK
Hong Kong bourse hosts record number
of PE-backed IPOs in June
Concerns over the slowing of the
Chinese economy have contributed to
a lacklustre performance of the Hong
Kong stock market during the fi rst half
of the year. In these six months, the
territory’s bourse recorded US$20.0
billion of listings, only 35.0% of the
US$57.0 billion recorded for the entire
2010. The benchmark Hang Seng Index
was down by 0.5% for the fi rst six
months of the year while the H-share
index, which represents China-based
companies that trade in Hong Kong,
dropped by 4.4%.
The less robust Hong Kong stock
market did not erode private equity
investors’ faith and confi dence, with
the Stock Exchange of Hong Kong’s
(‘SEHK’) role as the artery of capital
return to private equity investors
undiminished.
The month of June saw private
equity racing to join the initial public
offering (‘IPO) liquidity route. In
these 30 days, there were four IPOs,
although not all were warmly received
by public investors (fig. 24). Ozner
Water International Holding Ltd. (浩澤
淨水國際控股有限公司)(‘Ozner’),
a water purifi er producer backed by
SAIF Partners, Ares Management
LLC and Goldman Sachs, was the
best performer. On its first day of
trading, its share price closed at a 10.7%
DIVESTMENTS 資金套現
UCWeb Inc. (UC瀏覽器)
(‘UCWeb’), which counts Ceyuan
Ventures (聯創策源), GG V Capital
(紀源資本), Morningside Ventures
and Nokia Growth Partners as
investors, shall be acquired by Alibaba
Group Holding Ltd. (阿里巴巴集團)
(‘Alibaba’). The latter currently holds
a 66.0% interest in UCWeb Inc. and
will assume full control of the mobile
web browser operator.
UCWeb received a capital injection
from the venture investors in 2007.
Key Points
●The lacklustre performance of the Hong Kong stock market during
the first half of the year did not erode private equity investors’ faith and
confidence to the bourse.
●Seven private equity-backed companies successfully made their debuts
on the SEHK in the first half of the year, with four completed in June,
surpassing that recorded for the same period in 2013.
premium over its offer price.
The other three private equity-
backed debuts, however, Tianhe
Chemicals Group Ltd. (天合化
工集團有限公司), Cosmo Lady
(China) Holdings Co., Ltd. (都市麗人
(中國)控股有限公司) and Ourgame
International Holdings Ltd. (聯眾國
際控股有限公司), failed to arouse
keen interest from public investors. All
saw their fi rst day closing shares priced
below their offer price.
For the fi rst half of the year, seven
private equity-backed companies
successfully made their debuts on
the SEHK and raised an aggregate
US$2.4 billion, a notable surge
compared with the US$291.6 million
for the same period in 2013. This
year’s fi gure is boosted by the listing
of Harbin Bank Co., Ltd. (哈爾濱
銀行), backed by CITIC Capital
Holdings Ltd. (中信資本控股有限
公司), which raised US$1.1 billion.
PE-Backed IPOs in Hong Kong (Jan – Jun/2014)
Listing
Date Company PE Investor(s)
Amount
Raised
Sell at
IPO
1st day
performance
13th Mar Haichang Hony Capital, Orix 315.7 X 18.0%
31st Mar Harbin Bank CITIC Capital
Partners 1,130.2 X 0.3%
15th May Sunfonda Standard Chartered 69.9 X 7.5%
17th Jun Ozner Goldman Sachs,
SAIF, Ares 147.0 X 10.7%
20th Jun Tianhe MSPEA, PAG 474.4 X 0.6%
26th Jun Cosmo Lady Capital Today 188.8 X 1.4%
30th Jun Ourgame China Media Capital 104.5 X 11.8%
Amount raised in US$ m
Ares = Ares Management LLC
Cosmo Lady = Cosmo Lady (China) Holdings Co., Ltd.
Haichang = Haichang Holdings Ltd.
Harbin Bank = Harbin Bank Co., Ltd.
MSPEA = Morgan Stanley Private Equity Asia
Ourgame = Ourgame International Holdings Ltd.
Ozner = Ozner Water International Holding Ltd.
Standard Chartered = Standard Chartered Private Equity
Sunfonda = Sunfonda Group Holdings Ltd.
Tianhe = Tianhe Chemicals Group Ltd.
X = investor(s) did not sell
Fig. 24 Source: ASIA PRIVATE EQUITY REVIEW
NewQuest Capital Partners
(‘NewQuest’) and H&Q Asia Pacific
(‘H&Q’) completely disposed of their
stakes in Taiwan Stock Exchange-
listed Primax Electronics Ltd. (致伸
科技股份有限公司)(‘Primax’) and
clocked an aggregate NT$4.0 billion
(US$131.9 million) from this latest
round of share disposal.
Founded in 1984, Primax is an
electronic equipment manufacturer and
has counted H&Q and Merrill Lynch
as investors since 2007. NewQuest
subsequently acquired Merrill Lynch’s
interest in Primax in 2011.
CITIC Capital Partners (
中信資本)(‘CITIC’) and CDH
Investments (鼎暉投資)(‘CDH’)
have agreed to sell most of their
shares in Xiezhong International
Holdings Ltd (‘Xiezhong’) (協眾
國際控股有限公司) to existing
shareholders for a total consideration
of HK$277.0 million (US$35.7
million). The sale has triggered a
general offer that shall represent an
offer price of HK$0.9 per share,
being the same price sold to both
CITIC and CDH. The two investors
invested in Xiezhong back in 2008.
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-16
THE LENS 圈內透視
Today’s Capitalist
Capital Today has set a benchmark for
China mid-market funds
When JD.com Inc. (京東商城)
(‘JD.com’) listed on Nasdaq in May,
a nine-year-old private equity firm
was sharing the glittering limelight
of the success of this fi rst debut by a
Chinese e-commerce company on the
US bourse. Since 2007, Capital Today
(今日資本) has invested US$18.0
million in JD.com. Based on the latter’s
initial public offer price, on a realised
and unrealised basis, Capital Today has
chalked up a gross multiple of over
111.0 times. It was among one of the
most envious multiples ever attained in
China (fi g. 25). The independent fund
management fi rm that was established
in 2005 is now a legend in its country’s
private equity industry.
Yet to Celebrate
Its 10th Anniversary
Compared with its peers that were
established in the same period, Capital
Today’s US$680.0 million fund pool,
through two funds, is modest. But its
founder, Ms Kathy Xu (徐新), has
attained a larger-than-life profi le.
Prior to setting up Capital Today,
Ms Xu began her direct investment
career in the Hong Kong-based
Peregrine Direct Investments, which
was once the largest investment
banking institution in Asia outside
of Japan. In 1998, she joined Baring
Private Equity Asia (‘Baring’) where
she was in charge of the fi rm’s China
investment division. During her
tenure with Baring, Ms Xu showed
her prodigious talent. Among some
of the outstanding deals that she
completed were Netease.com, Vanda
Systems & Communications Holdings
Ltd., and Comba Telecom Systems
Holdings Ltd.
In 2005, Ms Xu joined a growing
pool of aspiring general partners in
her home country and christened
her own firm. In the first leg of
her journey as an independent fund
manager, Ms Xu successfully recruited
some of her colleagues in Baring
as her founding partners. Capital
Today commenced its operations with
US$280.0 million as its maiden fund.
According to market sources, Ms Xu
successfully attracted a marquee list of
investors as limited partners, including
AlpInvest Partners, CDC Group
plc, International Finance Corp.,
and Partners Group.
Focused Investment Strategy
Riding on China’s growth story,
Capital Today’s portfolio has largely
concentrated on the consumer, retail,
pharmacy, and internet sectors, but
with food being its principal focus.
It has earlier invested in Kungfu
Catering Management Co., Ltd., a
fast food china operator, and exited
from it in 2012. In the same year, it
cornerstoned the initial public offering
(‘IPO’) of Tsui Wah Holdings Ltd. (
翠華控股有限公司), a tea restaurant
chain operator in Hong Kong. In the
internet-related food sector, Capital
Today has invested in dianping.com
(大眾點評網), a food review and
group-buying website, and also Anhui
Three Squirrels Electronic Commerce
Co., Ltd. (安徽三只松鼠電子商務
有限公司), a snack food brand selling
through the online channel.
In deals that Capital Today co-
invests with other investors, the total
commitment size of each deal has
been kept to a maximum of US$70.0
million. In situations where it is the sole
investor, Capital Today’s commitment
size has usually been less than US$30.0
million. The only exception was
Cosmo Lady (China) Holding Co.,
Ltd. (都市麗人(中國)控股有限公
司) (‘Cosmo Lady’), in which Capital
Today committed a total of US$52.7
million via two rounds (fi g. 26).
Capital Today’s minimalistic
commitment size and consumer-
related focus have proven to be a
formidable formula for success. In
addition to JD.com, Capital Today’s
initial investment in Todou Holdings
Ltd. (土豆網)(‘Todou’) also resulted
in substantial gain. After the merger
between Todou and Youku Inc. (優酷
Key Points
●Capital Today chalks up a gross multiple of over 111.0 times, on a
realised and unrealised basis from JD.com Inc.
●Capital Today’s investments mainly focus on consumer-related
companies and with modest commitment sizes.
●The plan to raise a US$400.0 million evergreen fund demonstrates Capital
Today’s confidence that it can provide sustainable return results.
Capital Today’s Performance Results
in JD.com Inc. (as of May/2014)
(1) estimated amount as of May 2014
(2) estimated amount based on IPO price of
US$19.0 per share
Invested Capital Realisation
18.0
400
200
2,000
2,200
0
1,200
1,400
1,600
1,800
600
1,000
800
(US$ m)
2,009
1,768.3(2)
240.7(1)
Capital Today’s Portfolio Companies – Selective
Company Date Amount Business
Thatgamecompany May 14 7.0 online games
Shanghai LifeVC Co., Ltd. Jul 13 30.0 furniture
Uzai.com Nov 11, Jul 10 25.0 travel site
Cosmo Lady (China)
Holdings Co., Ltd. Aug 11, Oct 10 52.7 lingerie
Ganji.com Dec 10 70.0 (1) online information
platform
All amounts in US$ m
(1) invests together with Sequoia Capital China
Fig. 26 Source: ASIA PRIVATE EQUITY REVIEW
111.6x
Fig. 25 Source: ASIA PE INDEX
Invested Capital
Distributed Capital Residual Value
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-17
Performance Results of Capital Today’s Portfolio Companies – Selective
Investment Realisation
Company Date Equity
amount Date Returned
amount
Residual
value Status
JD.com
Inc.
Mar 07 –
Jan 09 18.0 May 10 –
May 14 240.7 (1) 1,768.3 (1) partially
exited
Youku
Todou Inc. Apr 07 6.0 N/A N/A 37.8 (1) undivested
Kungfu
Catering Oct 07 8.0 (2) Nov 12 19.1 (2) N/A completely
exited
All amounts in US$
(1) estimated value as of the end of June
(2) estimated value based on market sources
Kungfu Catering = Kungfu Catering Management Co., Ltd.
Fig. 27 Source: ASIA PE INDEX
Dossier of Capital Today
Established year 2005
Founder Kathy Xu
Geographic focus China
Managed capital US$680.0 m
Funds
• Capital Today China Growth Fund, LP
◦closed in 2006 at US$280.0 m
• Capital Today China Growth Fund II, LP
◦closed in 2010 at US$400.0 m
• plans to launch a 28-year US$400.0 m evergreen fund (1)
Investment targets small- and medium-sized fi rms in the retail, consumer,
pharmacy, and internet sectors
(1)based on market reports
Fig. 28 Compiled by: ASIA PRIVATE EQUITY REVIEW
www.asiape.com
To order:
Online at
www.asiape.com
subscription@asiape.com
@Call our customer service
+852 2861 0102
PE Data consists of -
● Fund ● Investment ● Divestment
It covers data dating back to 2000/2001. Similar to all products in APER DataBank, the PE Data is a vault of
accurate data researched by a team of experienced researchers in the Asian private equity industry. It is another
tool that investment professionals can rely on in making astute decisions on fund allocations, deal strategies as well
as on choices of exits.
APER DataBank - PE Data
網) in 2012, the initial US$6.0 million
investment in Todou by Capital Today
is now an equity interest in Youku
Todou Inc. (優酷土豆集團) that was
valued at around US$37.8 million at
the end of June (fi g. 27).
Comments
Success breeds success. On the
heels of its spectacular success with
JD.com’s IPO, another company under
Capital Today also made its debut in
June. Cosmo Lady, a Chinese lingerie
maker, listed on the Stock Exchange
of Hong Kong in late June. Before the
end of the year, dianping.com, a food
review and group-buying website, is
expected to join the log of companies
realised by Capital Today.
Perhaps the most powerful display
of Ms Xu’s confi dence in her ability
to provide sustainable return results
to investors is her plan to raise a
US$400.0 million evergreen fund. It
shall have a 28-year life span.
In less than a decade since she
launched her own fund management
firm, Ms Xu is preparing to cloak
herself as the next Warren Buffet
of China. Hers is more than an awe-
inspiring story (fi g. 28).
July 2014 | 二零一四年七月號
GC-18
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
WINDOW OF THE WORLD 世界之窗
已向SK Shipping Co., Ltd.收購了SK B&T Pte. Ltd. (‘SK
B&T’)之45.0％股權。交易金額為824億韓圜（約8,100萬
美元）。
SK B&T是一家海洋石油供應公司，總部設於新
加坡。
（新加坡）
（新加坡）
General Partners
Qiming Venture Partners (‘Qiming’) has inducted
two partners, Mr Kuantai Yeh and Ms Jing Wu. Before
joining Qiming, Mr Yeh was a managing director of
Highland Capital Partners. Ms Wu was previously with
CITIC Private Equity Funds Management Co., Ltd.
(PRC)
TPG、太盟投資集團、OTPP將收購
物業服務供應商
由
TPG、太盟投資集團
TPG、太盟投資集團（PAG Asia Capital）
和安大略
和安大略
省教師退休金計劃
省教師退休金計劃（Ontario Teachers’ Pension Plan）組成
的財團同意以12億澳元（約11億美元）的企業價值向澳洲
的UGL Ltd. (‘UGL’)收購環球物業服務企業戴德梁行。
戴德梁行於2011年被UGL收購。美洲地區所產生的業
務收入佔其2013財政年度的55.0%。
(澳洲)
(澳洲)
KDB PE及DOMINUS收購石油供應公司
據報，
KDB Private Equity
KDB Private Equity及
Dominus Investment Co., Ltd.
Dominus Investment Co., Ltd.
SUMMARY: SUBSCRIBERS’ WEEKLY (JUN/2014)
WINDOW OF THE WORLD 世界之窗
PEOPLE ON THE MOVE 人物花絮
INSTITUTIONAL INVESTORS
From 13 June 14 issue: -
■BYD Sets up New Energy Automotive Fund
BYD Co., Ltd. (‘BYD’) has entered into an agreement with China
Science and Merchants Capital Management Co., Ltd. to set
up CSM BYD New Energy Automotive Industry Investment Fund
(‘Automotive Fund’) ... (PRC)
■IFC Finances Waste Water Treatment Project in China
International Finance Corp. is planning to invest US$4.0 million
in the series A fi nancing of MTI Environment Group Ltd. The latter
is a wastewater treatment ... (PRC)
From 27 June 14 issue: -
■PSERS Commits to Orchid Asia’s Latest Fund
Pennsylvania Public School Employees’ Retirement System
(‘PSERS’) has approved a US$75.0 million commitment to Orchid
Asia VI, LP, which has a target size of ... (Greater China)
■GVCGC Makes Its Start-ups Push
Guangdong Technology Venture Capital Group Co., Ltd.
(‘GVCGC’) has established an Rmb1.0 billion (US$162.2 million)
GVCGC Innovation Fund of Funds, joined by the Nanhai People’s
Government of Foshan ... (PRC)
FUNDS
From 6 June 14 issue: -
■IDG Closes Its Latest Fund
IDG Capital Partners has closed its latest China-focused fund,
IDG China Venture Capital Fund IV, LP, at US$586.0 million, and
indicated that the fund was heavily ‘oversubscribed’ ... (PRC)
■Shoreline Capital Reaches 1st Close for Its Fund III
Shoreline Capital Management Ltd. (‘Shoreline Capital’) raised
US$150.0 million in the fi rst closing of its Shoreline China Value
III LP. which has a target size of US$500.0 million ... (PRC)
■Shunwei’s Fund II Oversubscribed
Shunwei Capital Partners (‘Shunwei’) has reportedly raised
US$525.0 million for its second fund, Shunwei China Internet Fund
II, LP (‘Fund II’) ... (PRC)
From 13 June 14 issue: -
■Capital Today to Set up an Evergreen Fund
Capital Today is said to be raising a US$400.0 million evergreen
fund which will have a lifespan of 28 years. The proposed new
fund is believed to be one of the few evergreen ... (PRC)
■Wuhan to Set up 1st Laser Industrial Fund
The city of Wuhan plans to set up an industrial fund that focuses
on buyouts and short-term debt fi nancing in the laser industry. The
fund has a target size of Rmb5.0 billion ... (PRC)
From 27 June 14 issue: -
■Lightspeed’s Second China Fund Oversubscribed
Lightspeed China Partners (‘LCP’) has completed the fi nal closing
of its Lightspeed China Partners II, LP, at US$260.0 million,
exceeding the original target size of US$220.0 million ... (PRC)
INVESTMENTS
From 6 June 14 issue: -
■Apax Subscribes to Online Recruitment
Apax Partner has agreed to purchase an aggregate US$15.0
million worth shares in Zhaopin Ltd, for the latter’s initial public
offering at the New York Stock Exchange ... (PRC)
■Ceyuan Leads in Menstrual App
Ceyuan Ventures has led the US$30.0 million series C of fi nancing
in Dayima, a menstrual calendar application, with participations
from existing investors ... (PRC)
■CNEI Promotes Health
China New Enterprises Investment Co. has announced a
commitment of US$10.5 million in Qinghai Weide Special Sugar
Co., Ltd. (‘Weide’). Established in October, 2002 and located in
Xining City ... (PRC)
■GSR Ventures to Get Answers from Learning App
GSR Ventures has reportedly invested US$3.0 million in the series
A fi nancing of Xuexibao, a learning application for primary and
secondary students ... (PRC)
■IDG Leads in Mobile Sharing App
IDG Capital Partners has led a US$20.0 million fi nancing of
ZAPYA, a mobile sharing application. Established in 2012, Beijing-
based ZAPYA, operated by Lindong ... (PRC)
■JD Capital Invests in Fast Styling Industry
JD Capital Co., Ltd. has completed the series A fi nancing of
Guangzhou Cheeris Arts & Crafts Co., Ltd. (‘Cheeris’), a Chinese
fast styling brand ... (PRC)
■PEs Order Pork Dish
A consortium of private equity investors, including Kohlberg Kravis
Roberts & Co. L.P. (‘KKR’), Baring Private Equity Asia Ltd.,
Hopu Investment Management Co. and Boyu Capital ... (PRC)
■Qiming & Morningside Chat Online
Qiming Venture Partners has teamed up with Morningside
Ventures to commit US$15.0 million for the series A fi nancing in
inbilin, a free voice call application developed by ... (PRC)
■Sequoia Reads News on Toutiao
Sequoia Capital China has led in the US$100.0 million fi nancing
of Toutiao, a Chinese news application, with the participation of
Nasdaq-listed Weibo Corp. ... (PRC)
July 2014 | 二零一四年七月號
GC-19
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
SUMMARY: SUBSCRIBERS’ WEEKLY (JUN/2014)
■Tianxing Capital Leads in Film Marketing
Tianxing Capital has led the Rmb60.0 million (US$9.7 million)
series B fi nancing of Beijing Magilm Pictures Media Co., Ltd.
(‘Magilm Pictures’), a fi lm marketing company ... (PRC)
From 13 June 14 issue: -
■CITIC and Yunfeng Secure Foothold in Milk Industry
CITIC Private Equity Funds Management Co., Ltd. and Yunfeng
Capital (‘consortium’) have agreed to earmark no less than Rmb2.0
billion (US$324.8 million) ... (PRC)
■Gobi Supports Mobile Intelligence
Gobi Partners invested US$3.0 million into Jushang Information
Technology (Shanghai) Co., Ltd. (‘Jushang Intelligence’) Founded
in 2012, Shanghai-based Jushang Intelligence engages in the
research and development of ... (PRC)
■Investors Share Views on Female Apparel
Hopu Investment Management Co., Ltd. and Trust Bridge
Partners (‘Trust Bridge’) led a US$200.0 million series D fi nancing
of mogujie.com, an online female apparel retailer and shopping
guide community. Mogujie.com’s existing investors ... (PRC)
■Legend Capital Buys Medical Equipment
Legend Capital has committed to a series B fi nancing of Shanghai
Aohua Photoelectricity Endoscope Co., Ltd. (‘Aohua’). The
transaction amount was around Rmb100.0 million ... (PRC)
From 20 June 14 issue: -
■GGV & Chengwei to Produce 3D Animated Film
GGV Capital and Chengwei Capital have jointly led the US$20.0
million series B fi nancing of Light Chaser Animation Studios (‘Light
Chaser’), with participation from ... (PRC)
■Hony Capital to Invest in Hotel Operator
Hony Capital is subscribing shares of Shanghai Jinjiang
International Hotels Development Co., Ltd. (‘Jinjiang’) for a
consideration of Rmb1.5 billion (US$245.3 million) ... (PRC)
■Investors Rent Vacation Homes
A marquee list of investors including GGV Capital, Qiming
Venture Partners, China Broadband Capital, CDH Investments,
Lightspeed China Partners, Ctrip.com International Ltd., and
HomeAway, Inc. invested ... (PRC)
■Legend Capital Checks in to Short-term
Accommodation Platform
Legend Capital has led the US$15.0 million series B fi nancing of
Xiaozhu.com (‘Xiaozhu’), a short-term accommodation platform,
with the participation of ... (PRC)
■Morningside Funds P2P Financing Platform
Morningside Ventures has invested in the series B fi nancing
of Yooli.com, an online peer-to-peer fi nancing platform, for an
undisclosed amount ... (PRC)
■Qiming Backs Medical Devices
Qiming Venture Partners has teamed up with Taifu Capital and
committed over US$10.0 million to Shanghai Sanyou Medical
Devices Co., Ltd. Founded in 2005 ... (PRC)
■SAIF Partners Gets Answers from Zhihu
SAIF Partners has reportedly committed US$22.0 million to the
series B fi nancing of Zhihu.com, a question-and-answer website.
Established in 2010, Beijing-based Zhihu.com is a platform that
allows community users to create ... (PRC)
■WeLab Secures Funding from Sequoia and TOM Group
Sequoia Capital made its maiden startup investment in Hong Kong
by partnering with TOM Group in a US$14.0 million investment in
WeLab Ltd ... (PRC)
■Investors Buy Biotechnology
Milestone Capital has led a Series B fi nancing round of US$35.0
million in JHL Biotech, Inc., an emerging biopharmaceutical
company. The transaction enlisted a ... (Taiwan)
■Sequoia Capital Backs Cross-screen Marketing
Solutions Provider
Sequoia Capital has invested US$6.0 million in Appier Inc.
(‘Appier’), a technology company building next generation cross-
screen marketing solutions. Appier, ... (Taiwan)
From 27 June 14 issue: -
■CDH to Buy Contact Lens
CDH Investments (‘CDH’) has agreed to team up with China
Grand Pharmaceutical and Healthcare Holdings Ltd. (‘China Grand
Pharma’) to acquire a 71.25% ... (PRC)
■Govtor Capital Helps Build E-Commerce Site
Govtor Capital has invested Rmb50.0 million (US$8.1 million) in
Qianmi. The latter, founded in 2013, is a technology company that
helps merchants to set up ... (PRC)
■Greenwoods Provides Online Shopping Guide
Greenwoods Asset Management, a China-based hedge fund
management firm, has invested Rmb100.0 million (US$16.2
million) in the series A of fi nancing in taofen8.com ... (PRC)
■IDG Enjoys Oversea Travelling
IDG Capital Partners has reportedly committed the series A
fi nancing of HiTour.cc (‘HiTour’), an overseas travel services
provider. The transaction amount was not disclosed ... (PRC)
■SIG Leads in Female Health Management App
SIG China has led in the US$35.0 million series C fi nancing of
Meet You, a female health management application, with the
participation of existing investors ... (PRC)
DIVESTMENTS
From 13 June 14 issue: -
■Investors to Conclude Holdings in UCWeb
UCWeb Inc. (‘UCWeb’), which counts Ceyuan Ventures, GGV
Capital, Morningside Ventures and Nokia Growth Partners as
investors, shall be acquired by Alibaba Group Holding Ltd. ... (PRC)
From 20 June 14 issue: -
■CITIC and CDH Dump Shares of Xiezhong
CITIC Capital Partners (‘CITIC’) and CDH Investments (‘CDH’)
have agreed to sell most of their shares in Xiezhong International
Holdings Ltd (‘Xiezhong’) to existing ... (PRC)
■Ozner Listed on SEHK
Ozner Water International Holding Ltd. (‘Ozner’), backed by SAIF
Partners (‘SAIF’), Ares Management LLC (‘Ares’) and Goldman
Sachs, was listed on the Stock Exchange of Hong Kong. The
investors had invested an aggregate US$78.1 million ... (PRC)
■Tianhe Debuts at Hong Kong Bourse
Tianhe Chemicals Group Ltd. (‘Tianhe’), which counts Morgan
Stanley Private Equity Asia (‘MSPEA’) and PAG as its investors,
was listed on the Stock Exchange of Hong Kong ... (PRC)
■H&Q & NewQuest Complete Exit from Primax Electronics
NewQuest Capital Partners (‘NewQuest’) and H&Q Asia Pacifi c
(‘H&Q’) completely disposed of their stakes in Taiwan Stock
Exchange-listed Primax Electronics Ltd. ... (Taiwan)
From 27 June 14 issue: -
■ChiNext Hosts Two VC-Backed IPOs
Wuxi Xuelang Environmental Technology Co, Ltd. (‘Wuxi Xuelang’),
backed by Boxin Capital, is listed on the ChiNext of Shenzhen
Stock Exchange ... (PRC)
■Cosmo Lady Lists on SEHK
Cosmo Lady (China) Holdings Co Ltd (‘Cosmo Lady’), backed by
Capital Today, was listed on the Stock Exchange of Hong Kong.
Capital Today invested an aggregate US$52.7 million ... (PRC)
■Xunlei Ltd. Debuts on NASDAQ
Xunlei Ltd. was listed on NASDAQ and raised US$87.8 million from
its initial public offering (‘IPO’). Since 2005, the cloud acceleration
subscription services provider has received ... (PRC)
July 2014 | 二零一四年七月號
GC-20
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
All amounts in US$ m
Summary Status:
as of 30th Jun, 2014
Divestments
Firm Company Mode Listing Venue Pg
Boxin Capital Wuxi Xuelang Environmental Technology Co,
Ltd.
IPO ChiNext 19
Capital Today Cosmo Lady (China) Holdings Co Ltd IPO SEHK 15-17,
19,21
Ceyuan Ventures, GGV Capital,
Morningside Ventures and Nokia Growth
Partners
UCWeb Inc. trade sale unlisted 15,19
CITIC Capital Partners,
CDH Investments
Xiezhong
International Holdings Ltd
trade sale SEHK 19,21
JD Capital Co.,Ltd Feitian Technologies Co., Ltd. IPO ChiNext 19
Morgan Stanley Private
Equity Asia, PAG
Tianhe Chemicals Group Ltd. IPO SEHK 15,19,21
Morningside Ventures, IDG
Capital Partners, Ceyuan Ventures
Xunlei Ltd. IPO NASDAQ 15,19,23
NewQuest Capital Partners and H&Q
Asia Pacific
Primax Electronics Ltd. open market Taiwan Stock Exchange 15,19
SAIF Partners, Ares Management LLC
and Goldman Sachs
Ozner Water International Holding Ltd. IPO SEHK 15,19,21
Funds
Firm Name of Fund Size Focus Status Pg
Capital Today N/A 400 Growth/ Expansion C To be
launched
16-18
IDG Capital Partners IDG China Venture Capital Fund IV, LP 586 Venture Capital C Closed 18
Lightspeed China Partners Lightspeed China Partners II, LP 260 Venture Capital C Closed 18
Shoreline Capital Management Ltd. Shoreline China Value III LP 500 Debt C Raising 18
Shunwei Capital Partners Shunwei China Internet Fund II, LP 525 Venture Capital C Closed 18
(R)=Regional (C)=Country (G) = Global
Investments
Firm Targets/Portfolios Deal Size Location Pg
Apax Partner Zhaopin Ltd 15.0 PRC 18
CDH Investments, China Grand Pharmaceutical, Healthcare
Holdings Ltd.
Weicon Optical Co., Ltd. 78.8 PRC 12, 13, 14,
19
Ceyuan Ventures, Sequoia Capital China, Bertelsmann Asia
Investments
Dayima 30.0 PRC 18
CITIC Private Equity Funds Management Co., Ltd., Yunfeng
Capital
Inner Mongolia Yili Livestock Development Co.,
Ltd.
324.8 PRC 19
GGV Capital, Chengwei Capital, Hillhouse Capital
Management, IDG Capital Partners.
Light Chaser Animation Studios 20.0 PRC 19
GGV Capital, Qiming Venture Partners, China Broadband
Capital, CDH Investments, Lightspeed China Partners
Tujia.com 100.0 PRC 13, 19
Hony Capital Shanghai Jinjiang International Hotels
Development Co., Ltd.
245.3 PRC 13, 19
Hopu Investment Management Co., Ltd., Trust Bridge
Partners, Banyan Capital, IDG Capital Partners, Qiming
Venture Partners
mogujie.com 200.0 PRC 19
IDG Capital Partners ZAPYA 20.0 PRC 18
Kohlberg Kravis Roberts & Co. L.P., Baring Private Equity
Asia Ltd., Hopu Investment Management Co, Boyu Capital
COFCO Meat Investment Co., Ltd. 270.0 PRC 18
Legend Capital Shanghai Aohua Photoelectricity Endoscope Co.,
Ltd.
16.3 PRC 14, 19
Legend Capital, Morningside Ventures Xiaozhu.com 15.0 PRC 13, 19
Pennsylvania Public School Employees’ Retirement System Orchid Asia VI, LP 75 PRC 18
Qiming Venture Partners, Taifu Capital Shanghai Sanyou Medical Devices Co., Ltd. 10.0 PRC 14, 19
SAIF Partners Zhihu.com 22.0 PRC 19
Sequoia Capital China, Weibo Corp. Toutiao 100.0 PRC 18
Sequoia Capital, TOM Group WeLab Ltd. 14.0 PRC 9, 19
SIG China, Matrix Partners China, China Renaissance K2
Ventures
Meet You 35.0 PRC 14, 19
SIG China, Sequoia Capital China Leleda 10.0 PRC 19
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
(DECEMBER 2013 TO JUNE 2014)
COUNTRY/
LISTED CO
PRIVATE EQUITY
INVESTORS
23 Dec
2013
26 Mar
2014
27 Jun
2014
July 2014 | 二零一四年七月號
GC-21
Hong Kong (in HK$)
Besunyen Holdings Co., Ltd. GGV Capital, Qiming Venture Partners, Ignition Venture
Partners, NewMargin Ventures
0.48 0.43 0.46
China Fiber Optic Network System Group Ltd. The Cathay Capital Group 1.46 2.03 1.78
China Flooring Holding Co., Ltd. Morgan Stanley Private Equity Asia, International Finance Corp.,
Headland capital Partners Ltd.
1.34 1.18 1.27
China ITS Holdings Ltd. CCB International Asset Management Ltd., Baring Private
Equity Asia, Temasek Holdings, GE Capital Equity
Investment Ltd., Investor Growth Capital Asia, Mizuho
Securities Principal Investment Co., Ltd., Intel Capital
1.84 1.53 1.62
China NT Pharma Group Co., Ltd. TPG 0.92 0.93 0.83
China Outfi tters Holdings Ltd. (formerly
Shanghai Doright Fashion Co Ltd or CEC
Outfi tters Ltd)
Orchid Asia Group Management Ltd., IDG-Accel China
Capital, Kohlberg Kravis Roberts & Co., Sequoia Capital
China, China Everbright Investment Management Ltd.
1.13 1.34 1.12
China Tianrui Group Cement Company Limited Kohlberg Kravis Roberts & Co., JPMorgan Private Capital Asia 2.06 2.3 2.3
China Yongda Automobiles Services Holdings
Ltd
Prax Capital, Baring Private Equity Partners Asia 6.72 7.15 6.9
Far East Horizon Ld. Kohlberg Kravis Roberts & Co., GIC Special Investments, China
Internatioanl Capital Corporation Ltd.
6.15 5.74 5.65
Freetech Road Recycling Technology (Holdings)
Ltd.
CITIC Securities International Partners, China International
Capital Corporation Ltd.
3.20 2.15 2.36
Huaneng Renewables Corporation Ltd. Stanard Chartered Private Equity Ltd., Olympus Capital
Holdings Asia, GE Capital
3.56 2.85 2.53
International Housewares Retail Co., Ltd. EQT Partners Asia 3.46 3.84 3.3
New China Life Insurance Company Ltd MBK Partners, Standard Chartered Principal Finance Ltd,
Temasek Holdings, Hony Capital, CITIC Private Equity Fund
Management Co., Ltd., International Finance Corp.
25.85 23 24.75
Sitoy Group Holdings Ltd IDG Capital Partners 4.51 4.38 4.72
Springland International Holdings Ltd. CDH Investments 3.95 3.44 3
Sun Art Retail Group Ltd. General Atlantic Partners 11.00 9.29 8.9
Sunac China Holdings Ltd. Bain Capital, CDH Investments, New Horizon Capital 4.59 4.21 4.22
Tenfu (Cayman) Holdings Co Ltd. China International Capital Corporation, Sequoia Capital China,
IDG Technology Venture Investment, General Atlantic
Partners
3.88 3.69 3.47
Tenwow International Holdings Ltd. Orchid Asia Group Management Ltd., Milestone Capital
Management Ltd., The Carlyle Group
3.58 3.37 2.76
Time Watch Investments Ltd. Orchid Asia Group Management Ltd. 1.02 1 1.16
Tsui Wah Holdings Ltd. Capital Today, Prax Capital 5.16 4.56 3.81
Xiao Nan Guo Restaurants Holdings Ltd Milestone Capital Management Ltd, CITIC Securities
International Partners
1.39 1.32 1.15
Xiezhong International Holdings Ltd. CITIC Capital Partners, CDH Investments 0.88 0.87 1.5
Yuanda China Holdings Ltd. Standard Chartered Private Equity 0.70 0.62 0.68
Forgame Holdings Ltd. TA Associates, Qiming Venture Partners, Ignition Capital
Partners
51.80 41.25 25.95
Boyaa Interactive International Ltd. Sequoia Capital China 7.26 8.8 8.14
Jintian Pharmaceutical Group Ltd. CVC Capital Partners, SEAVI Advent Private Equity 2.28 2.5 2.43
Consun Pharmaceutical Group Ltd. Hony Capital 4.57 6 5.84
Fu Shou Yuan International Group Ltd. The Carlyle Group 4.40 4.1 4.18
China Cinda Asset Management Co., Ltd. CITIC Capital Holdings CO., Ltd., Haixia Huifu Industrial
Investment Fund Management Co., Ltd.
4.58 4.16 3.8
Hydoo International Holding Ltd. Hony Capital 2.20 3.53 2.48
Artgo Mining Holdings Ltd. The Carlyle Group - 1.84 1.95
(Started trading on the HKSE on 30th December, 2013 with closing price at HK$2.52)
Haichang Holdings Ltd. Hony Capital, Orix Corporation - 1.73 1.39
(Started trading on the HKSE on 13th March, 2014 with closing price at HK$2.02)
Ozner Water International Holding Ltd SAIF Partners, Ares Management LLC, Goldman Sachs - - 3
(Started trading on the HKEX on 17th June, 2014 with closing price at HKD 2.99)
Sunfonda Group Holdings Ltd Standard Chartered Private Equity - - 3.6
(Started trading on the HKEX on 15th May, 2014 with closing price at HKD 3.88)
Harbin Bank Co., Ltd. CITIC Capital Partners - - 3.06
(Started trading on the HKEX on 31st March, 2014 with closing price at HKD 2.90)
Tianhe Chmeical Groups Limitd Morgan Stanley Private Equity Asia, PAG - - 1.98
(Started trading on the HKEX on 20th June, 2014 with closing price at HKD 1.79)
Cosmo Lady (China) Holdings Co Ltd Capital Today - - 3.5
(Started trading on the HKEX on 27th June, 2014 with closing price at HKD 3.55)
People’s Republic of China (in Rmb)
Anhui Shengyun Machinery Co., Ltd. CITIC Private Equity Management Co., Ltd. 29.97 25.08 15.75
(Anhui Shengyun Machinery Co., Ltd.: Stock split from 10 shares to 18 shares on 20th May, 2014)
Beijing Shouhang Resources Saving Co., Ltd. Sequoia Capital China, Gold Stone Investment Ltd. 26.77 31.62 28.01
Do-Fluoride Chemicals Co., Ltd. Shenzhen Capital Group Co., Ltd. 12.80 16.3 14.29
Grandhope Biotech Co., Ltd. GGV Capital 29.45 42.8 47.83
Hainan Shuangcheng Pharmaceuticals Co., Ltd. IDG Capital Partners, SEAVI Advent 15.35 14.9 10.3
(Hainan Shuangcheng Pharmaceuticals Co., Ltd.: Stock split from 10 shares to 15 shares on 22th May, 2014)
Hangzhou Tigermed Consulting Co., Ltd. Qiming Venture Partners 60.71 65.99 33.32
(Hangzhou Tigermed Consulting Co., Ltd.: Stock split from 1 share to 2 shares on 22nd April, 2014)
PERFORMANCE OF SELECTED PRIVATE EQUITY-BACKED LISTED FIRMS
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
(DECEMBER 2013 TO JUNE 2014)
COUNTRY/
LISTED CO
PRIVATE EQUITY
INVESTORS
23 Dec
2013
26 Mar
2014
27 Jun
2014
July 2014 | 二零一四年七月號
GC-22
HC SemiTek Corporation IDG Capital Partners, Gold Stone Investment Co., Ltd., CXC
Capital, Inc.
9.76 18.6 18.68
Hiconics Drive Technology Co., Ltd. Legend Capital 7.37 9.12 9.1
Hybio Pharmaceutical Co., Ltd. SAIF Partners, Shenzhen Capital Group Co., Ltd. 18.49 26.63 26.63
Jiangsu Phoenix Publishing & Media Corporation
Ltd.
Hony Capital 9.08 9.23 9.25
Jiangsu Rainbow Heavy Industries Co., Ltd. The Carlyle Group 9.30 12.21 9.29
Jiangxi Huawu Brake Co., Ltd. Shenzhen CDF-Capital Co., Ltd., Shenzhen Oriental Fortune
Capital Co., Ltd.
12.77 14.99 7.43
(Jiangxi Huawu Brake Co., Ltd.: Stock split from 1 share to 2 shares on 13th May, 2014)
Lepu Medical Technology (Beijing) Co., Ltd. Warburg Pincus 15.37 21.58 21.3
Loncin Motor Co., Ltd. China Science & Merchants Investment (Fund) Management 9.03 9.2 8.78
Shanghai Acrel Co., Ltd. GGV Capital 34.25 25.3 26.04
Shanghai Luxin Packaging Materials Science &
Technology Co., Ltd.
Legend Capital, Doll Capital Management 18.49 20.84 8.64
(Shanghai Luxin Packaging Materials Science & Technology Co., Ltd.: Stock split from 1 share to 2 shares on 10th June, 2014)
Shenzhen Hepalink Pharmaceutical Co., Ltd. Goldman Sachs 22.40 20.44 18.47
Shenzhen MTC Co., Ltd. Shenzhen Capital Group Co., Ltd. 13.23 12.08 7.82
Shenzhen O-fi lm tech Co., Ltd. Shenzhen Capital Group Co., Ltd. 44.90 43.39 21.1
(Shenzhen O-fi lm tech Co., Ltd.: Stock split from 1 share to 2 shares on 22nd April, 2014)
Sinosun Technology Co., Ltd. GGV Capital, KPCB China, Intel Capital, Walden International,
Ping An Caizhi Investment Management Co., Ltd., Fortune
Venture Capital Co., Ltd.
16.70 19.54 25.3
Suzhou Anjie Technology Co., Ltd Legend Capital 32.59 30.17 31.99
Tongkun Group Co., Ltd. Morgan Stanley Private Equity Asia 5.75 5.84 6.18
Wuhu Token Science Co., Ltd. Haitong-Fortis Private Equity Fund Management Co., Ltd. 13.75 19.59 19.59
Xiamen Changelight Co., Ltd. Sequoia Capital China 10.50 13.14 11.9
Xinjiang Goldwind Science & Technology Co.
Ltd.
Haitong-Fortis Private Equity Fund Management Co., Ltd,
NewMargin Ventures
7.92 9.91 9.51
Yonghui Superstores Co., Ltd. HSBC Private Equity (Asia) 13.65 12.16 6.15
(Yonghui Superstores Co., Ltd.: Stock split from 1 share to 2 shares on 14th April, 2014)
Zhejiang D.A. Diagnostics Co., Ltd. Softbank China Venture Capital 55.70 76.74 42.89
(Zhejiang D.A. Diagnostics Co., Ltd.: Stock split from 10 shares to 17 shares on 4th June, 2014)
Zhengzhou Coal Mining Machinery Group Co.,
Ltd.
Shenzhen Capital Group Co., Ltd. 6.49 5.93 4.83
China Wafer Level CSP Co., Ltd. Infi nity CSVC Ventures LP, Oriza Holdings Co., Ltd. - 32.07 42.25
(Started trading on the SSE on 10th February, 2014 with closing price at Rmb27.59)
Shaanxi Coal Industry Co., Ltd. CITIC Private Equity Management Co., Ltd. - 4.13 4.18
(Started trading on the SSE on 28th January, 2014 with closing price at Rmb4.55)
Beijing Sinnet Technology Co., Ltd. Sequoia Capital China - 87.19 52.29
(Started trading on the SZSE on 29th January, 2014 with closing price at Rmb71.86, Beijing Sinnet Technology Co., Ltd.: Stock split from 1 share to 2 shares on 21st April, 2014)
Beijing Tongtech Co., Ltd. Infotech Pacifi c Ventures - 60 62.17
(Started trading on the SZSE on 29th January, 2014 with closing price at Rmb55.16)
NetPosa Technologies Ltd. China Science & Merchants Investment (Fund) Management,
Intel Capital
- 129 87.32
(Started trading on the SZSE on 29th January, 2014 with closing price at Rmb71.86, NetPosa Technologies Ltd.: Stock split from 1 share to 2 shares on 7th May, 2014)
Porton Fine Chemicals Ltd. DT Capital Partners - 44.88 82.71
(Started trading on the SZSE on 29th January, 2014 with closing price at Rmb36.15)
Shanghai Amarsoft Information & Technology
Co., Ltd.
Legend Capital - 33.3 46.79
(Started trading on the SZSE on 28th January, 2014 with closing price at Rmb33.7)
Suzhou SLAC PrecisionEquipment Co., Ltd. Govtor Capital - 50.8 64.8
(Started trading on the SZSE on 29th January, 2014 with closing price at Rmb50.62)
Zhejiang Wolwo Bio-Pharmaceutical Co., Ltd. Shenzhen Oriental Fortune Capital Co., Ltd. - 35.2 31.4
(Started trading on the SZSE on 21st January, 2014 with closing price at Rmb29.15)
Beijing Kingee Culture Development Co., Ltd. Shenzhen Capital Group Co., Ltd. - 21.1 23.23
(Started trading on the SZSE on 27th January, 2014 with closing price at Rmb15.2)
Beijing Utour International Travel Service Co.,
Ltd.
JD Capital - 66.68 90
(Started trading on the SZSE on 23rd January, 2014 with closing price at Rmb33.62)
Chenzhou City Jingui Silver Industry Co., Ltd. CMS Zhiyuan Capital - 20.84 25.55
(Started trading on the SZSE on 28th January, 2014 with closing price at Rmb20.67)
Geron Co., Ltd. Leading Capital - 25.4 29.38
(Started trading on the SZSE on 28th January, 2014 with closing price at Rmb10.35)
Guangzhou Tinci Materials Technology Co., Ltd. Guosen H&S Investment Co., Ltd. - 24.7 31.98
(Started trading on the SZSE on 23rd January, 2014 with closing price at Rmb19.83)
Huaiji Dengyun Auto-parts (Holding) Co., Ltd. Shenzhen Cowin Venture Capital Investments Ltd. - 21.08 35.03
(Started trading on the SZSE on 19th February, 2014 with closing price at Rmb14.63)
Kennede Electronics MFG Co., Ltd. Starry Fir Fund Capital - 23.63 30.23
(Started trading on the SZSE on 29th January, 2014 with closing price at Rmb19.28)
Muyuan Foodstuff Co., Ltd. International Finance Corporation - 35.05 43.28
(Started trading on the SZSE on 28th January, 2014 with closing price at Rmb34.66)
Shanghai Liangxin Electrical Co., Ltd. Guotai Junan Venture Investment Co., Ltd. - 28.91 34.05
(Started trading on the SZSE on 21st January, 2014 with closing price at Rmb27.79)
Zhejiang Yueling Co., Ltd. NewMargin Ventures, Zhejiang ZheShang Venture Capital - 25.68 31.8
(Started trading on the SZSE on 29th January, 2014 with closing price at Rmb22.12)
PERFORMANCE OF SELECTED PRIVATE EQUITY-BACKED LISTED FIRMS
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
(DECEMBER 2013 TO JUNE 2014)
COUNTRY/
LISTED CO
PRIVATE EQUITY
INVESTORS
23 Dec
2013
26 Mar
2014
27 Jun
2014
July 2014 | 二零一四年七月號
GC-23
Wuxi Xuelang Environmental Technology Co., Ltd. Boxin Capital - - 23.33
(Started trading on the SZSE on 27th June, 2014 with closing price at Rmb21.21)
Feitian Technologies Co., Ltd. JD Capital - - 52.48
(Started trading on the SZSE on 27th June, 2014 with closing price at Rmb47.71)
Singapore (in S$)
Anchun International Holdings Ltd. SkyVen Asset Management Pte. Ltd. 0.09 0.08 0.08
China Minzhong Food Corp. Ltd. CMIA Capital Partners 0.86 0.94 0.88
Taiwan (in NT$)
Cosmos Bank SAC Private Capital 14.95 14.85 15.1
EnTie Commercial Bank The LongReach Group 14.90 13.6 14.55
Jih Sun Financial Holding Co. Integral Partner Group 8.41 8.49 8.49
Ta Chong Bank Ltd. The Carlyle Group 10.70 10.1 10.05
Yageo Corp AIG, Kohlberg Kravis Roberts & Co. 10.65 13.75 20.95
USA (NASDAQ) (in US$)
21Vianet Group, Inc. GGV Capital, Matrix Partners, Meritech Capital Partners 22.11 25.45 29.99
Autonavi Holdings Limited Omaha Capital China, Walden International, KPCB, Sequoia
Capital China
14.10 20.07 20.87
Charm Communications Inc. AIF Capital 4.25 4.32 4.5
China Lodging Group, Limited Chengwei Ventures, Northern Light Venture Capital, CDH
Investments, IDG Capital Partners
28.86 23.35 24.66
Jiayuan.com International Ltd. Qiming Venture Partners, Ignition Partners 5.87 6.45 6.11
Sky-mobi Limited Sequoia Capital China 5.87 8.46 7.98
YY Inc. Morningside Ventures, Steamboat Ventures, GGV Capital, Tiger
Global
50.05 71.01 74.65
Qunar Caymen Islands Ltd. GSR Ventures, GGV Capital, Hillhouse Capital Management,
Tenaya Capital, Mayfi eld Fund
27.82 26.85 27.79
Sungy Mobile Ltd. IDG Capital Partners, JAFCO Asia, China Broadband Capital,
WI Harper Group
18.24 20.02 13.92
iKang Healthcare Group Inc GIC Special Investments Pte Ltd, NewQuest Capital Partners,
Walden International, WI Harper Group, Goldman Sachs
- - 17.19
(Started trading on the NASDAQ on 9th April, 2014 with closing price at USD 15.20 )
JD.com Inc Capital Today, Tiger Global, Hillhouse Capital Management, Bull
Capital Partners Ltd, Sequoia Capital China, Insight Venture
Partners, KPCB China, Ontario Teachers' Pension Plan,
Kingdom Holding Company
- - 28.01
(Started trading on the NASDAQ on 22nd May, 2014 with closing price at USD 20.90)
Tarena International, Inc. IDG Capital Partners, JAFCO Asia, Goldman Sachs - - 12.21
(Started trading on the NASDAQ on 3rd April, 2014 with closing price at USD 9.06 )
Xunlei Ltd Ceyuan Ventures, Morningside Ventures, IDG Capital Partners,
Primavera Capital Group
- - 15.09
(Started trading on the NASDAQ on 25th June, 2014 with closing price at USD 14.90)
Tuniu Corp Gobi Partners, DCM, Sequoia Capital China, Highland Capital
Partners, Temasek Holdings Pte Ltd
- - 16.86
(Started trading on the NASDAQ on 9th May, 2014 with closing price at USD 10.07)
USA (NYSE) (in US$)
Bitauto Holdings Ltd. Nippon Venture Capital Co., Ltd., Hotung Investment Holdings
Limited, Doll Capital Management, Legend Capital, Authosis
Capital, Bertelsmann Asia
28.76 33.22 46.26
Country Style Cooking Restaurant Chain Co., Ltd. Sequoia Capital China, SIG China 10.10 10.1 8.98
Jinkosolar Holding Co., Ltd. Shenzhen Capital Group, China Israel Value Capital, Pitango
Venture Capital, Hupomore Capital Partners,
28.31 27.22 29.73
LightinTheBox Holding Co., Ltd. Ceyuan Ventures, GSR Ventures, Trustbridge Partners 7.52 6.63 6.42
NetQin Mobile Inc. GSR Ventures, Ceyuan Ventures, Sequoia Capital China, Fidelity
Asia Ventures
11.56 16.77 6.07
Phoenix New Media Ltd. Intel Capital, Bertelsmann Asia Investments AG, Morningside
Ventures
9.43 9.89 10.73
Qihoo 360 Technology Co., Ltd.
Renren Inc. Doll Capital Management, Joho Capital, China Media Capital 3.02 3.18 3.32
Taomee Holdings Ltd.
Vipshop Holdings Ltd Doll Capital Management, Sequoia Capital China 85.17 134.3 188.55
Youku Tudou Inc. Farallon Capital Management LLC, Chengwei Ventures, Sutter
Hill Ventures, Bain Capital, Maverick Capital, Ltd., IDG
Technology Venture Investment, GGV Capital, Temasek
Holdings Pte. Ltd.
30.13 26.88 23.19
58.com Inc. Warburg Pincus, SAIF Partners, Doll Capital Management 31.72 39.15 54.9
500.com Ltd. Sequoia Capital China, Vision Knight Capital 31.06 34.68 36.35
Autohome Inc. Orchid Asia Group Management Ltd. 29.25 36.62 33.26
Jumei International Holding Ltd China Renaissance K2 Ventures, Sequoia Capital China - - 26.6
(Started trading on the NYSE on 16th May, 2014 with closing price at USD 24.18)
Cheetah Mobile Inc. Matrix Partners China - - 21.24
(Started trading on the NYSE on 8th May, 2014 with closing price at USD 14.10 )
PERFORMANCE OF SELECTED PRIVATE EQUITY-BACKED LISTED FIRMS
ASIA PRIVATE EQUITY REVIEW - Greater China Edition | 亞洲直接投資評論 - 大中華版
July 2014 | 二零一四年七月號
GC-24
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Rmb100 = AUD17.16
Rmb100 = EUR11.87
Rmb100 = GBP9.46
Rmb100 = HKD125.82
Rmb100 = INR968.79
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EXCHANGE RATES
PRIVATE EQUITY RELATED COMPANIES IN THIS ISSUE
AlpInvest Partners ............................... GC-16
Apax Partner ......................................... GC-18
Ares Management LLC .........GC-15, GC-19
Baring Private Equity Asia ....GC-16, GC-18
Biomark Capital .................................... GC-14
Boxin Capital ........................................ GC-19
Boyu Capital .......................................... GC-18
Capital Today ..........................GC-16, GC-18
CDC Group plc .................................... GC-16
CDH Investments .................GC-12, GC-13,
GC-14, GC-15, GC-19
Ceyuan Ventures .......GC-15, GC-18, GC-19
China Broadband Capital ......GC-13, GC-19
China Broadband Capital Partners ...... GC-9
China Development Industrial Bank GC-14
China Media Capital............................. GC-14
China New Enterprises Investment Co.
........................................................ GC-18
China Renaissance K2 Ventures ........ GC-14
CITIC Capital Holdings Ltd. ............. GC-15
CITIC Capital Partners ....................... GC-19
CITIC Private Equity Funds
Management Co., Ltd.. ................ GC-19
EQT Partners ......................................... GC-9
GGV Capital .............GC-13, GC-15, GC-19
GIC Special Investments .................... GC-14
Gobi Partners........................................ GC-19
Goldman Sachs .......................GC-15, GC-19
Govtor Capital ......................................GC-19
Grand River Capital ............................. GC-14
Greenwoods Asset Management .......GC-19
GSR Ventures ....................................... GC-18
Guangdong Technology Venture Capital
Group Co., Ltd. ............................GC-18
Haitong Capital ....................................... GC-9
Hony Capital ...........................GC-13, GC-19
Hopu Investment Management Co.
..........................................GC-18, GC-19
H&Q Asia Pacifi c ...................GC-15, GC-19
IDG Capital Partners .............GC-18, GC-19
International Finance Corp. .GC-16, GC-18
JD Capital Co., Ltd.. ..............GC-10, GC-18
Kohlberg Kravis Roberts & Co. L.P.
............................................GC-5, GC-18
KPCB China ......................................... GC-14
Legend Capital ........................GC-13, GC-14
Lightspeed China Partners ....GC-13, GC-19
Matrix Partners China .............GC-9, GC-14
Merrill Lynch’s ...................................... GC-15
Milestone Capital ....................GC-14, GC-19
Morgan Stanley Private Equity Asia .. GC-19
Morningside Ventures ............ GC-9, GC-13,
GC-15, GC-18, GC-19
NewQuest Capital Partners ................ GC-15
Nokia Growth Partners ....................... GC-19
Olympus Capital Holdings Asia ......... GC-14
Partners Group ....................................... GC-7
Pennsylvania Public School Employees’
Retirement System ....................... GC-18
Qiming Venture Partners
............. GC-13, GC-14, GC-18, GC-19
SAIF Partners .........................GC-15, GC-19
SB China Venture Capital ..................... GC-9
Sequoia Capital .........................GC-9, GC-19
Sequoia Capital China ............GC-14, GC-18
Shoreline Capital Management Ltd., Ltd.
........................................................ GC-18
Shunwei Capital Partners .................... GC-18
SIG China ................................GC-14, GC-19
Taifu Capital ............................GC-14, GC-19
The Carlyle Group ..................... GC-7, GC-9
Tianxing Capital ................................... GC-19
Trust Bridge Partners .......................... GC-19
Warburg Pincus .................................... GC-14
Yunfeng Capital .................................... GC-19
