Newly established private equity funds soar, and investment in the medical field is hot

, The industry’s new funds soared

1.1 Newly established funds soared year-on-year

In May, newly established domestic venture capital and private equity funds surged year-on-year. According to China Investment Data, in May 2021, a total of 788 funds were newly established in China’s VC/PE market, a year-on-year increase of 155% and a month-on-month increase of 116%. Supported by the relevant investment policies of the local government this month, various industrial funds have been established one after another. The favorable policies of various fund towns are also driving the industry to flourish.

Chart 1: China’s venture capital and private equity newly established funds and the year-on-year

 


Data source: CV Source, Haiyin Research Institute

1.2 The investment market is temporarily down, but investment in the medical field is hot

PE/VC investment performance was sluggish in May, but investment in the medical field was hot. According to China Investment Data, in May 2021, the investment in the PE and VC industries was US$11.9 billion, a year-on-year decline of 9%. The number of industry investment cases was 453, down 36% year-on-year. The investment amount and quantity of this month are relatively low, and the overall investment projects are mainly in the middle and late stages, the industry tends to be cautious in the short term.

Chart 2: PE/VC market investment scale and year-on-year

Data source: CV Source, Haiyin Research Institute

Chart 3: PE/VC market investment volume and year-on-year

Data source: CV Source, Haiyin Research Institute

The average investment amount of a single private equity project continued to grow. In terms of the average investment amount of a single PE/VC project, the average investment amount of a single private equity project in May 2021 was US$34.88 million, a year-on-year increase of 90%. The overall trend of focusing on high-quality projects continues.

Chart 4: PE/VC single project average investment

Data source: CV Source, Haiyin Research Institute

Investment in the medical field continues to maintain a hot trend. The industry hot spots in the PE/VC market mainly focus on healthcare, IT and information technology, and manufacturing. In May, the investment in the healthcare sector exceeded US$2.5 billion, with more than 71 investment cases, and investment continued to be hot. As a result of JD Logistics’ listing this month, the transportation and logistics sector has received subscriptions from 7 cornerstone investors including SoftBank and Temasek, resulting in a relatively high amount of investment in this area.

Chart 5: Proportion of VC/PE financing amount in various industries in May 2021

Data source: CV Source, Haiyin Research Institute

2. Industry withdrawal remains stable

Global IPOs of Chinese companies have maintained stable operations. According to China Investment Data, in May 2021, the overall IPO rhythm of the market remained stable. In May, a total of 48 Chinese companies achieved IPOs globally. The number of IPOs increased by 100% year-on-year, and the total IPO funds raised were 64.4 billion yuan, an increase of 153% year-on-year. The project with the largest amount of IPO funds raised this month is JD Logistics, which raised 20.229 billion yuan.

Figure 6: The scale and number of IPOs of Chinese companies in the global market

Data source: Wind, Haiyin Research Institute

The number of IPOs on the Sci-tech Innovation Board ranks first among all sectors. In terms of the number of IPOs in May 2021, the number of IPOs on the Science and Technology Innovation Board is 14, ranking first among all A-share sectors. In terms of the scale of fundraising, the amount of funds raised on the main board of the Hong Kong Stock Exchange reached 21.7 billion yuan, far exceeding that of other sectors, mainly due to the large amount of funds raised by Jingdong Logistics, a listed company on the Hong Kong Stock Exchange.

Chart 7: A-share market enterprise IPO scale and year-on-year

Data source: Wind, Haiyin Research Institute

Chart 8: The number of IPOs of companies in the A-share market and the YoY

Data source: Wind, Haiyin Research Institute

Figure 9: Number of IPOs in each sector in May 2021

Data source: Wind, Haiyin Research Institute

3. The return rate of private equity exits has fallen

The book return on the exit of private equity projects has fallen. In May 2021, PE/VC institutions’ exit book returns reached 93 billion yuan, and the exit return rate reached 2.69 times, slightly higher than the same period last year, but the quarter-on-quarter decline was mainly due to the recent large fluctuations in the secondary market leading to a return in yield. narrow.

Exhibit 10: IPO book return and rate of return

Data source: CV Source, Haiyin Research Institute

On the whole, benefiting from the cashing of the exit proceeds of high-quality projects in the early stage, private equity fundraising surged year-on-year in May, and future investment in the industry is expected to continue to improve. It is worth noting that although the rate of return on private equity investment has declined, it is still at a relatively high level overall. Affected by this, it is expected that the future private equity industry investment is expected to show a further expansion trend.

This report is produced by Haiyin Wealth Management Co., Ltd. The information in this report is derived from published materials and information, but Haiyin Wealth Management Co., Ltd. (hereinafter referred to as “Haiyin Wealth”) does not guarantee the accuracy and completeness of these materials and information. The information, opinions, etc. in this report are for investors’ reference only, and do not constitute bids or levies for the securities trading. The information and opinions do not take into account the specific investment purpose, financial situation and specific needs of the personnel who obtained this report, and at no time constitute a personal recommendation to anyone.

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