Overseas private placements are most concerned about investment areas such as Sichuan consumer medicine (VC 269)

There are three major industries in Sichuan that overseas PEs are keen on: 1. Consumption and consumption channels 2. Pharmaceutical industry 3. Seed and breeding industries and agricultural circular economy enterprises.

Two major agreements between financing companies and PE that cannot be ignored

1. Make clear performance expectations when negotiating. If the performance does not reach the agreement, the owner ’s shares will be diluted. 2. Directors have one vote veto power, and investment institutions will usually send one director at the time of shareholding, and require directors to have one vote veto power when appropriate.

As the only Hong Kong law firm registered in Sichuan to conduct business, Hong Kong Hu Baiquan Law Firm has operated a number of cases involving the introduction of overseas PE (private equity investment) investments in Sichuan enterprises and overseas listings. On the 26th, Yu Hao, a member of the Huaxi Entrepreneurship Tutors Group and a senior manager of Hong Kong Hu Baiquan Law Firm, revealed that from recent contacts, overseas PEs are most concerned about the three major investment areas in Sichuan. And companies in the corresponding fields are also contemplating listing opportunities. Companies participating in the first Sichuan SME Financing Summit can pay more attention to potential opportunities in this regard.

Sichuan three investment opportunities are big

Yu Hao said that overseas investors are optimistic about the three aspects of investment. The first is in the field of "consumption and consumption channels". For example, Huiji, Shengdile Village, Hongqi Chain, etc. have received investment. In addition to the general supermarket chain in this kind of consumption channel, there are various end-market chain brands such as automobiles, home furnishing and clothing.

The second aspect is the pharmaceutical industry. Yu Hao revealed that many medical equipment technology companies in Chengdu are making financing. In addition, blood products, hospitals, and plastic surgery are also receiving much attention. "Some of the overseas PEs currently introduced are also looking at various plastic surgery chains in Sichuan, but the biggest risk in the plastic surgery industry is the lack of reproducible technology and certain investment difficulties. Therefore, it is more cautious to watch."

The third aspect is agriculture. These include seed industry and breeding industry and enterprises with special characteristics of circular economy. "For example, a related company in Ziyang, Sichuan has already received investment and is currently preparing to go public."

Hope to invest in companies with high expected growth rates

"In addition to the introduction of overseas PE, in terms of local institutions, we cooperate with Chengdu Chengchuanghuizhi Fund and hope that through this summit, we will find some projects that can provide pre-financing and value-added services." Yu Hao said, as for investment requirements, no The starting point for certain profits is high, but the annual growth rate of profits in the next 2 to 3 years is expected to be no less than 30%. There are no specific restrictions on the investment industry. The investment of a single SME project is between 10 and 30 million yuan.

Yu Hao also put forward suggestions for the business owners attending the conference. At present, there are many PE institutions. Powerful enterprises should choose competitive institutions. It depends on the past cases and performance of investment institutions. As for companies looking for investment, it is important to prepare a business plan, and financing needs should be clear. There are two other points that are easy to ignore. First, many companies need to sign a gambling agreement with investment institutions when financing. If the performance does not reach the agreement, the shares of the business owner will be diluted. This necessitates clear performance expectations during negotiations. The second point is that investment institutions, due to concerns about the impact of operations, generally send a director to the invested enterprise when they invest in shares. In order to ensure the right to speak, the investment institution will ask the directors to veto in due course. Therefore, business owners who need financing should consider more. "

Investment companies are best listed domestically

It is reported that some companies participating in this summit are also very concerned about the issue of listing after getting investment in the future. "From the current point of view, domestic listing is more cost-effective." Yu Hao believes that as for whether to list overseas, it depends on the market conditions, and the policy restrictions.

At present, there are still some Sichuan enterprises in preparation for overseas listing. "There are three queues here. One of Sichuan's beauty chains expects to be listed in Hong Kong by the end of 2011. However, it requires a relatively large amount of investment. For example, private enterprises should give up their controlling rights and introduce industry investors."

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