JD Capital-invested Fusenmei Got Listed
Chengdu Fusenmei Furniture Co., Ltd. (Fusenmei, 002818), a JD Capital-invested company, got listed on Shenzhen Stock Exchange on November 9.
Fusenmei is a regional leading company of building materials and furniture, headquartered in Chengdu, Sichuan Province. After listing, drove by the two-wheel strategy of “Industry + Finance”, the company will enhance its head position in traditional market and further explore new businesses and expand its geographic reach.
In 2016, there have been seven JD Capital-invested companies getting listed or preparing to get listed on A share market, namely Fusenmei (002818), Xinjiang Xintai Natural Gas (603393), Dowell (300535), Monarch (002798), DAKE (300503), Beiken Energy (approved by CSRC) and Jiangsu Flag Chemical (approved by CSRC).
Pre-IPO Investment Witnessed Fruitful Results
JD Capital focused on “Pre-IPO” investment since its establishment in 2007 to 2013. Pre-IPO investment refers to investing in outstanding companies in rapidly developing industries to hold their shares and carry out value-added services before they got listed, and to exit through decreasing shares of holding in public market after they get listed. Through this investment model, JD Capital and its fund LPs can share the dividend brought by the growth of China’s economy and capital market, and gain substantial profits.
With the development of Pre-IPO businesses, JD Capital took the lead in establishing a development system covering the whole nation and a professional investment, risk control and post-investment management team, therefore accumulating abundant industrial resources and investment experiences. JD Capital-invested companies through Pre-IPO model ushered together into a period of substantial gains after 2014, with 19 companies successfully completing their IPOs on A share market as of now, making up 5% of the total within the same period. Meanwhile, there have been 26 IPOs under reviewing by CSRC. All the data of JD Capital listed above ranked first among Chinese VC/PE firms.
While promoting the IPOs of invested companies, JD Capital has actively pursued exit through M&As, backdoor listing, listing on NEEQ followed by board transfer, and etc. It has successfully exited from 21 companies via non-IPO means since 2014, which on the one hand diversified the practices of capital operating, and on the other hand met the return and refund demand of investors.
Thanks to the great advantages and performance in investment and exit, JD Capital has been the front runners or the top one for many times on the list of annual PE investment firms rewarded by Zero2IPO Group, China Venture or other authoritative institutions.
Integrated Investment Model Has Been Launched
While receiving the great results in Pre-IPO investment, JD Capital has made a new investment strategy, considering the changes in real economy and capital market. Now it has stepped into a new era of integrated investment across the board.
Under the backdrop of “new normal”, with the slowdown of macroeconomic growth and diminishing inner drive of companies, industrial integration and M&As have become new engines of corporate development. Compared with the past Pre-IPO equity investment, the integrated investment model promoted by JD Capital currently will give full play to the “Industry + Finance” characteristics of PE capital, helping target companies continue to carry out various forms of M&A integration plans and become leading companies at home or even abroad. As the market cap of those companies grows, the investment of JD Capital will yield a good and stable return.
In order to implement the integrated investment model comprehensively, JD Capital launched “JD·Bellwether Plan”. On the one hand, it handpicked the leading companies and the quasi ones in all subdivided industries, sustained its investment through share acquisition, equity holding, mezzanine investment, and private placement, etc., and helped them to expand through the major mean of M&As integration. On the other hand, for industries like healthcare, education, public services and etc., which are decentralized and lack of flagships, JD Capital actively carried out industrial integration to build leading companies.
The system, resources and experiences accumulated in Pre-IPO era will provide a powerful support for integrated investment strategy. JD Capital has invested in nearly 300 companies in total, conducted due diligence over 3000 companies and had contacts with over 20000 companies. Currently, JD Capital has made the decision to include Fusenmei and other 50 JD Capital-invested companies as the first cooperating companies in the “JD·Bellwether Plan” and make them the key potential investment targets. Numerous companies which have been covered in due diligence or have had connections with JD Capital previously can be considered as the subjects or targets of M&As. The business development system with national coverage and global reach can continue to play an important role and the value evaluation skills and capital operating experiences accumulated in Pre-IPO phase will also shine in integrated investment phase.
Because the integrated investment model requires much larger investment amount of a single investor and is more flexible, it is suited to the participation of big investment firms. In line with the new strategy of integrated investment model, JD Capital launched “JD· Institutional Cooperation Plan” at the capital end, enhancing the cooperation with the current investors from nearly 100 firms and forcefully exploring more institutional investors. To fulfill the asset allocation requirement of institutional investors, besides standard PE fund, JD Capital has also developed new fund products such as private placement fund, mezzanine fun and etc.