On May 19, Shenzhen Tiantu Investment Management Co., Ltd. (hereinafter referred to as “Tiantu investment”, securities code: 833979), a listed company on the new third board, announced that the company submitted the application materials for initial public offering of overseas listed foreign shares and listing (H shares) to the China Securities Regulatory Commission, and has received the receipt certificate of administrative license application from the CSRC. The trading of the company’s shares was suspended from May 20.
The announcement shows that in order to promote the further development of the company and enhance the competitiveness of the company, the company plans to make an initial public offering of overseas listed foreign shares (H shares) and list them on the main board of the stock exchange of Hong Kong Limited. The company will employ Deloitte Touche Tohmatsu (special general partnership) and Deloitte guanhuang Chenfang to provide financial audit services for the issuance and listing of H shares of the company.
Competition in China’s private equity investment market is intensifying. By the end of March 2022, there were 14993 private equity and venture capital fund managers in China. After years of development and precipitation, the concentration of equity investment business is increasing day by day. Especially since this year, affected by the epidemic, the speed of raising and investment has slowed down.
For Tiantu investment to start the Hong Kong stock IPO process this year, insiders believe that for Tiantu investment, an institution with a large proportion of its own capital investment, it needs a larger amount of funds and has a stronger willingness to go public for financing. Some people in the industry said that this year is a real capital winter. Tiantu chose this time to list in Hong Kong stocks. On the one hand, it should serve fund-raising; On the other hand, it should also be out of consideration of brand publicity. After all, there are too many GP now.
issued fixed increase and exchange shares
Founded in 2002, Tiantu is one of the earliest professional institutions engaged in equity investment in China. Tiantu investment takes the lead in focusing on the investment in the field of consumer goods and takes the road of focus and specialization. The investment projects cover three consumption upgrading directions: innovative consumption, new retail and consumption technology. Tiantu investment has grown into a whole industry chain investment institution covering the investment stage from angel to M & a holding.
The latest disclosed annual report shows that as of December 31, 2021, Tiantu investment fund has invested in 193 projects with a total investment of RMB 14.107 billion; There are 166 projects under management, with a total investment of 11.373 billion yuan. Among them, in 2021, Tiantu investment completed 56 projects through managed funds and its own funds, an increase of 51% over 2020; The total investment amount was 1.629 billion yuan, basically the same as the 1.801 billion investment amount of the previous year.
As an established investment institution, Tiantu has invested in many star projects. Tiantu is among the leading brands in many consumer categories, such as Feihe, Zhou Heiya, Jiang Xiaobai, Dezhou grilled chicken and so on. In 2021, Tiantu’s investment project Aihui (all things new life, stock code: rere) landed on the New York Stock Exchange on June 18, and Naixue’s tea (Stock Code: 2150. HK) was listed on the Hong Kong Stock Exchange on June 30. It is expected that multiple projects will be listed in the next few years.
At present, Tiantu investment has managed 13 RMB funds and 3 US dollar funds. Among them, the LP share holders of four funds, Shenzhen Tiantu Xingrui Venture Capital Co., Ltd., Tianjin Tiantu Xingsheng equity investment fund partnership (limited partnership), Tianjin Tiantu Xinghua equity investment partnership (limited partnership) and Suzhou Tiantu Xingsu equity investment Center (limited partnership), have participated in the private placement and share conversion of Tiantu investment in October 2015, The LP shares of these funds have become the company’s own assets. The interests of the above four equity conversion funds have been 100% owned by the company.
Relevant industry insiders said that in that year, many new third board listed institutions exchanged funds for shares to LP. On the one hand, LP can realize its share in the capital market in advance. On the other hand, investment institutions are also willing to own high-quality equity projects. After all, the return of invested projects after listing is higher.
self owned capital investment accounts for a relatively high proportion
It is worth noting that, in addition to the income of private equity funds managed by traditional GP, a large part of its asset management business is equity investment with its own funds, that is, investing its own funds in the equity of consumer enterprises to directly obtain investment income, and contributing to the private equity funds managed by the company to indirectly obtain equity investment income. This includes the fund shares exchanged through fixed increase in 2015.
In addition, since 2018, Tiantu investment has also carried out non asset management business by acquiring and holding consumer goods projects, so as to obtain the industrial operation income of the project by improving and improving the strategy and daily operation of the M & a project. According to the 2021 annual report, the company is also responsible for the operation and management of two M & a dairy projects (Mengtian dairy and Yunuo dairy) (according to the description in the annual report, Tiantu investment has lost the control of these two dairy subsidiaries and will not be consolidated in the future).
Relevant industry insiders believe that for Tiantu investment, which accounts for a large proportion of its own capital investment, it needs a larger amount of funds and has a stronger willingness to go public for financing. At the same time, holding consumer goods project assets is also of great benefit to the stability of the company’s performance.
Industry insiders said that the loss of control of the two dairy subsidiaries and no longer consolidated treatment may be due to the fact that the company’s future listing, if this part of the income is too high and inconsistent with the main business, it may not be conducive to listing.
pe / VC listing and financing discussed again in Shenzhen
From international experience, IPO of investment institutions is not uncommon. Blackstone, an old institution, was listed on the New York Stock Exchange in 2007. KKR, which has just entered China for fund-raising, also landed on the New York Stock Exchange in 2010. In fact, China’s capital market has also explored the listing of venture capital institutions.
From 2014 to 2015, with the arrival of the bull market in China’s secondary market, the financing in the primary market also ushered in explosive growth. At the same time, venture capital institutions appeared as public companies for the first time from behind the scenes, including Kunwu Jiuding Investment Holdings Co.Ltd(600053) , Tiantu investment and so on, which were the company representatives who successfully hung up the listing on the new third board.
With the acceleration of the reform of the registration system, the listing of venture capital institutions has entered the public view again. On April 7 this year, Shenzhen local financial supervision and Administration issued and implemented several measures on promoting the sustainable and high-quality development of venture capital in Shenzhen. In terms of exit channels, it was the first to explore the listing system arrangement of head venture capital enterprises, promote the pilot of PE / VC share transfer, and develop s fund and variable capital.
A Shenzhen equity investment institution told reporters that if venture capital institutions can have the opportunity to be listed on the main board, it will be a significant benefit for the fund’s raising, investment, management and withdrawal, especially the exit channels, will be more diversified. At the same time, under the regulatory measures such as the letter phi of listed companies, the equity investment industry will also be more standardized.
