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VC giant cultivates promising firms

Writer: Zhang Yu  |  Editor: Zhang Chanwen  |  From: Shenzhen Daily  |  Updated: 2022-12-28

In the long journey of entrepreneurship, venture capital (VC) is like a booster that helps fuel startup companies and small businesses with long-term growth potential.

On Dec. 23, the shares of two companies, Joulwatt Technology Co. Ltd. and OrbusNeich Medical Group Holdings Ltd., commenced trading on the sci-tech innovation board of the Shanghai Stock Exchange and the main board of the Hong Kong Stock Exchange, respectively.

Executives of Joulwatt Technology Co. Ltd. celebrate the listing of the company’s stocks on the sci-tech innovation board of the Shanghai Stock Exchange on Dec. 23. Courtesy of Joulwatt

The two enterprises share one similarity: they were invested by Shenzhen Capital Group Co. Ltd. (SCGC), a State-owned enterprise in Shenzhen.

The two companies’ stock exchange listings marked that SCGC had invested in and helped 238 enterprises in seeking initial public offerings (IPOs) in total, and 33 enterprises in 2022 alone.

The stellar figure has undoubtedly outshone that of the year 2010, which was 26, hitting a new record in the VC giant’s development history.

Benchmarking itself against global investment company Blackstone, SCGC has been dedicated to discovering and cultivating value-added companies. After 23 years’ development, it has become a comprehensive investment conglomerate with 430.9 billion yuan (US$61.92 billion) in total asset under its management.

SCGC, as an industry leader, has invested in over 1,400 companies, with a total investment amounting to about 90.5 billion yuan. Among the companies it has invested in, 238 are listed in 17 capital markets around the world, statistics from the company showed.

“We position ourselves to discover and cultivate value. SCGC will invest in whatever the country needs,” Ni Zewang, chairman of SCGC, told reporters in a media research tour at the company’s headquarters in Nanshan District recently.

According to Ni, “SCGC will invest in whatever the country needs” is not only a slogan, but also the company’s investment philosophy.

According to Ni, the company has been making an investment list involving key and core technology sectors such as new generation information technology, new materials, new energy and biomedicine, so that the company’s investment team can look out for targets according to the list.

As a tech powerhouse, Shenzhen is where SCGC grows and prospers. At its birthplace, SCGC has been focusing on promoting local enterprises’ development, industrial agglomeration and improvement of the VC ecology.

According to Ni, SCGC has so far invested in 385 VC projects in Shenzhen, with a total investment of 23.65 billion yuan. In particular, 90% of the invested projects were related to the 20 strategic emerging industrial clusters and eight future industries that the city has given priority to.

As of Dec. 15, stocks of a total of 56 Shenzhen enterprises invested by SCGC had been floated on the stock market, including Mindray, BGI, Sunway Communication, Winner Medical and Chipscreen.

According to Qiao Xudong, general manager of SCGC’s investment research institute, SCGC adheres to the principle of “early investment, small investment and technology investment.” Of all the projects the company has invested in, the number of projects in the initial stage and growth stage accounted for 21% and 71%, respectively.

“Entrepreneurship is a super long race, which needs to focus on financing step by step. The pursuit of capital quality is better than the pursuit of valuation,” Ni said when asked to give advice to entrepreneurs.

Ni noted that the so-called capital quality is to look for a suitable entrepreneurial partner or cooperative organization, and to find professional investment institutions that understand entrepreneurs and can collaborate for a long time.

“The most important thing is that entrepreneurship must integrate into the country’s overall development. We will do whatever the country and the industries need, which is undoubtedly worth doing,” Ni said.