Many PE-backed companies are queuing up for IPOs, with 30% having a price-to-earnings ratio below 10.

　　Recently, the China Securities Regulatory Commission (CSRC) once again released the "Basic Information Table of Companies Applying for Initial Public Offerings (IPOs)". As of May 3, a total of 653 companies are queuing up for listing, among which 181 companies have passed the review of the CSRC's issuance review committee and are in the pre-disclosure stage (expected to go public within the next 1-2 months). According to statistics from ChinaVenture, 74 of these companies have a VC/PE background, involving over 100 investment institutions. These institutions are expected to realize A-share exits within the next year.
　　Based on the above data, ChinaVenture has sorted out the companies with VC/PE backgrounds that have already gone public or are about to go public since 2012, and has compiled statistics on indicators such as the investment scale, investment cost, and investment cycle of the investment institutions behind them, in order to reveal the development characteristics and market trends of China's VC/PE industry in recent years. According to the statistical results, different types of institutions in the industry, such as the rapidly expanding Jiu Ding Investment and Zhongke Zhicheng, veteran domestic venture capital institutions such as Shenzhen Capital Group and Dacheng Capital, and securities investment companies such as Jinshi Investment and GF Xinde, all show different investment styles.
　　Jinshi and Dacheng hold the most shares; Zhongke Zhicheng and Jiu Ding win with scale
　　ChinaVenture selected all the companies that have gone public (including those that have passed and failed the review) since 2012, as well as those that have entered the pre-disclosure stage for listing—a total of approximately 200 disclosed cases—as research objects. Relying on CVSource, a financial data product under ChinaVenture, it sorted out the VC/PE investment institutions behind them. The statistical results show that among the above-mentioned companies intending to go public, 12 VC/PE institutions invested in more than 3 companies. Among them, Jinshi Investment and Dacheng Capital have the most holdings, both reaching 8 companies; Zhongke Zhicheng and GF Xinde hold 7 companies each; and Jiu Ding Investment holds 6 companies.
　　Judging from the total amount of disclosed investment cases of companies intending to go public since 2012, the rapidly expanding Zhongke Zhicheng and Jiu Ding Investment ranked first and second, reaching 844 million yuan and 539 million yuan respectively, with an average investment of 120 million yuan and 90 million yuan per project. However, Jinshi Investment and Dacheng Capital, which ranked first and second in the number of investments, ranked only 7th and 8th in total investment due to their smaller average investment per project.
　　From specific cases, Zhongke Zhicheng's investment per project is more concentrated. In its 7 investment projects, it invested a total of 728 million yuan in the Ruishi Dongfang and Chongqing Longxin projects, while the average investment in the other five projects was only 23 million yuan. Jiu Ding Investment's investment scale is relatively average. The largest investment, Hongqi Liansuo, was only 150 million yuan, the smallest investment, Zhongying Electronics, was 26 million yuan, and the other four projects were around 90 million yuan. In addition, GF Xinde's total investment reached 366 million yuan, ranking third, with an average investment of 52.33 million yuan per project, exceeding the investment level of other securities investment companies and most professional VC/PE investment institutions.
　　Aggressive Jiu Ding Investment has the lowest cost; securities investment companies have the shortest investment cycle
　　To examine the investment cost of the investment institutions participating in the intended listing companies, ChinaVenture, based on the information provided in the disclosed company prospectuses, conducted statistics on the price-to-earnings ratio (P/E ratio) of each investment project in the year of investment, and calculated the weighted average investment cost of each investment institution based on the investment amount, obtaining the average investment cost of the main VC/PE institutions (see Figure 3).
　　The statistical results show that Jiu Ding Investment had the lowest investment P/E ratio, at only 8.7 times. This shows that behind its aggressive investment style, its investment cost has been effectively controlled. In addition, the investment costs of Dongfang Fuhai, Zhongke Hongyi, and Dacheng Capital were all below 10 times. The P/E ratio of most institutions was between 10 and 15 times, while only Yong Hua Investment had an investment cost exceeding 15 times.
　　Overall, the average investment P/E ratio of the above-mentioned investment institutions was 12.3 times, showing that under the prevalence of Pre-IPO investment and intensified market competition, the investment cost of the entire equity investment industry has also increased accordingly. However, compared with the average investment P/E ratio of 12-15 times in the Chinese PE market in 2011, because the investment behavior of the above-mentioned investment institutions mostly occurred in the first half of 2010, their investment cost has not yet reached its highest point.
　　From the distribution of project investment P/E ratios, among the 65 companies intending to go public in which the above-mentioned institutions hold shares, there are 5 projects with a P/E ratio below 6 times, 6 projects with a P/E ratio between 6 and 8 times, and 10 projects with a P/E ratio between 8 and 10 times, with projects having a P/E ratio below 10 times accounting for 32.3%; there are 18 projects with a P/E ratio between 10 and 12 times, and 13 projects with a P/E ratio between 12 and 15 times, totaling 47.7%; and 12 projects with a P/E ratio above 15 times, accounting for 18.5%. Among them, the project with the lowest investment cost was Jiu Ding Investment's investment in Wuxi Hua Dong Heavy Machinery in October 2010, with a P/E ratio of only 4 times, while the project with the highest cost was Yong Hua Investment's investment in Beijing Dongyi Risheng, with a P/E ratio of 38.6 times.
　　Regarding the investment cycle of the institutions, that is, the time from when the institution invested in the company to when the company went public (the estimated time for companies in the pre-disclosure stage to go public is within the next two months), according to ChinaVenture's statistics, the average is 26.6 months. In other words, the time when the currently listed and intended VC/PE-backed companies introduced PE investors was basically around the first half of 2010. The investments during this period basically belong to Pre-IPO investment projects.
　　Among the various institutions, Zhongke Hongyi had the longest investment cycle, reaching 37 months, followed by Dacheng Capital and Shenzhen Capital Group, at 31 months and 26 months respectively. Jiu Ding and Zhongke Zhicheng's investment cycles were both around 20 months. The investment cycles of securities investment companies were generally shorter, with institutions such as Jinshi Investment and GF Xinde having investment cycles of around 18 months. Such a short investment cycle mainly benefits from the "underwriting + direct investment" model previously adopted by securities investment companies.