This island of youth, the capital of manufacturing, is riding the wind and waves to "new".
For example, they either belong to the field of advanced manufacturing industry, or they are companies that serve the advanced manufacturing industry: semiconductor companies that produce MEMS devices by Golmud Micro; Energy Chain Group, Telun Power and Zhongjiate Electric are energy/power industry chain companies; Kaos and Nippon are both producer service enterprises. The former is an industrial Internet enterprise, and the latter is a logistics supply chain enterprise. For another example, more than half of the six enterprises are incubated from traditional manufacturing giants: Gerway comes from Gerway shares; Caos and RRS were incubated in Haier Group; The parent company of the phone is Trudeau. Another point is about time: Although the time of establishment varies, most enterprises have significantly accelerated the pace of financing after 2019. In 2021, Gerway will complete the strategic financing of 9 institutions exceeding 2.1 billion yuan. Since 2019, Caos has completed five rounds of financing, with nearly 30 investors. Telun started to raise the financing speed from 2020, completed three rounds in two years, and obtained about 2 billion investment from 19 institutions in total. In addition, this is also true of Zhongjiate Electric and Energy Chain Group. These points were confirmed in the communication with Qingdao investors. They said that Qingdao is China's "capital of advanced manufacturing". It is not only full of traditional giants, but also upgrading to "new quality productivity". In particular, since 2019, Qingdao Venture Capital has taken on a new look, with a scene of "a hundred flowers blooming in spring". "If you want to know Qingdao, you can observe it from the above three aspects". "A well deserved city of advanced manufacturing" In this case, let's start with manufacturing. Friends who know Qingdao should not be unfamiliar with its long manufacturing history. As early as the end of the Eastern Han Dynasty, Xu Gan, one of the seven sons of Jian'an, recorded the grand scene of "heavy industry" in Qingdao (Jiaodong coast of the Qi State) at that time in the Ode to the Capital of Qi By the end of the Qing Dynasty, the Germans had built Jiaoji Railway, Qingdao Port, locomotive factory and brewery in Qingdao, making Qingdao the first city to start industrialization in China. By 1936, Qingdao's industry and commerce were among the top in the country, and its textile industry was even more outstanding. Together with Shanghai and Tianjin, Qingdao was called "Shangqingtian". After the founding of New China, the industrial foundation accumulated in the early stage has been further developed. At the beginning of reform and opening up, Qingdao has formed a sound industrial system, with 141 industrial subdivisions such as textile, light industry, machinery, and chemical industry. After becoming a city specifically designated in the national plan in 1986, the gross industrial output value has increased by 19.2% annually in 10 years on average. Today, Qingdao has the most complete industrial system in China, covering 39 of the 41 industrial categories. Moreover, compared with inland industrial cities, it also has the unique advantage of Qingdao Port, which facilitates the globalization of enterprises. Therefore, it is not surprising that in Qingdao, Haier and Hisense are global home appliance giants. Liu Xiang, Chairman of Jingming Capital, said to me that "Qingdao is a well deserved advanced manufacturing city in China". Jingming Capital is an investment institution based in Qingdao and deeply engaged in advanced manufacturing. He said that the city of Qingdao determines Jingming's industrial genes. "For example, our team members can be divided into two categories: one is the practitioners of securities investment banks, who have long served the listing of manufacturing enterprises; the second is the engineers or domestic research institutes from manufacturing giants such as Hisense, Haier and the Chinese Academy of Sciences." So in his eyes, "The development of high-end manufacturing and Qingdao has always been complementary." Judging from the financing situation of Qingdao enterprises in recent years, this is true. Figure/Smart Investment Promotion System According to the recruitment smart investment promotion system of China Investment, In 2023, the industry distribution of the investment amount of professional institutions in Qingdao (international industry, including traditional manufacturing industry and advanced manufacturing industry), with the manufacturing industry accounting for 69.75%, ranking first. If the time is longer, the manufacturing industry will account for 48.05% and the information technology will account for 40.7% from 2019 to 2023. These two sets of data reflect Qingdao's industrial base and venture capital preference. This corresponds to the case of Qingdao Unicorn in the first article. The six unicorn enterprises in Qingdao are either advanced manufacturing companies such as semiconductor and new energy, or productive service enterprises in the field of industrial Internet and energy digitalization. In a word, the star projects in Qingdao are all around the advanced manufacturing industry chain, which shows its industrial background. Industry giant: both incubate projects and supply capital On the other hand, "a typical feature of Qingdao's entrepreneurial ecology is that a considerable number of entrepreneurial companies are incubated by industrial giants." Cheng Wenchuan, the managing director of Fortune Global, said to me, "This situation is quite prominent in Shandong and Qingdao. If you compare Qingdao with Beijing, Beijing has a large number of colleges and universities, and entrepreneurial projects are unmatched by other cities. Qingdao is characterized by large enterprise groups as the gathering center of capital, talents and resources." Add these traditional manufacturing giants, They all have internal needs for transformation and upgrading, so "they are very active in internal entrepreneurship and incubation." Take Caos for example. In 2017, Caos incubated by Haier was established to provide ecological enterprises with services such as supply chain, equipment management and intelligent transformation. It aims to promote Haier's industrial Internet strategy, empower small and medium-sized enterprises, and help enterprises transform and upgrade. With Haier's endorsement, Caos has successfully raised funds in the primary market. Up to now, it has completed five rounds of financing, with a valuation of about 17 billion yuan. In March 2020, in Round A, Caos completed financing of 950 million yuan at one fell swoop, which was the largest round A financing in Qingdao at that time. The investors behind it are also influential, including well-known institutions such as the National Research Fund, China Merchants Zhiyuan Capital, Saifu Fund and Tongchuang Weiye. There are numerous cases similar to Caos. Qingdao local media once made a statistics, Among the 190 leading private enterprises in Qingdao, there are 13 Haier enterprises such as Kaos, among which Raytheon Technology, Kejie Intelligence, Haier Biology and other companies have successfully landed in the capital market. In addition, Hisense Group, CRRC Sifang, Ruiyuan Holdings, Stande Group and other industrial parties are all "spreading their branches". The star project of CRRC Sifang, Sirui Intelligent, is a leading semiconductor process equipment developer. In February of this year, we just received joint investment from 14 institutions, such as Haisong Capital, SAIC Investment, Shangqi Capital, China Merchants Group Venture Capital and Youth Venture Capital. The Xinxin Microenterprise incubated by Hisense in 2019 is a developer of smart TV SoC chips and AI chips, and has received three rounds of capital injections from many institutions, such as Huichuan Industrial Investment, Guofang Innovation and United Capital. More importantly, Industrial giants not only incubate projects, but also provide capital. In 2015, Haier Group took the lead in setting up Haier Capital, which focuses on industrial investment in intelligent technology and medical health. Haier Capital ED Niu Tenglong told me that Haier Capital mainly invests in hard technology, including semiconductor, new materials, intelligent manufacturing, medical technology, medical services, medical devices and other subdivisions. "We take the fund as the main body, and create a win-win industrial ecological investment and co creation platform by linking projects, upstream and downstream industries, government, LP and other ecological resources." With the help of Haier's industry and ecological resources, Haier Capital has moved from Qingdao to the whole country, developed into a well-known CVC with a management scale of more than 30 billion yuan, and invested more than 130 high-quality projects in the country. In addition to Haier, the pace of industrial capital turnover has accelerated significantly in the past two years. Goethe set up Qingdao Tongge Venture Capital in Qingdao. In August 2022, Tongge Venture Capital, together with Mihayou, Sanqi Mutual Entertainment and other companies, launched a venture capital fund of 555 million yuan. Recently, it officially ended with Hisense Group, established CVC Yiyang Investment, and initiated the establishment of an equity investment fund of 1 billion yuan. In addition, Qingdao enterprises such as Aucma and Baiyang Pharmaceutical are also investing directly or as LPs in the primary market. Turning point 2019: Investing in Qingdao is investing in the national strategy How did Qingdao venture capital ecology develop? To many people's surprise, as early as 1995, Qingdao set up a science and technology risk development center, which was one of the first cities in China to explore risk investment. Five years later, Qingdao invested another 100 million yuan to establish Qingdao Science and Technology Venture Capital Co., Ltd. (hereinafter referred to as "Qingdao Science and Technology Investment"), one of the first state-owned investment enterprises in China. The IPO of Qingdao's first institution came from this institution. In December 2006, Qingdao Jinwang, a candle manufacturer invested by Qingdao Scientific Investment, successfully landed in Shenzhen Stock Exchange. On the day of listing, Qingdao Scientific Investment's previous investment of 6 million yuan soared to 100 million yuan. This was undoubtedly a breakthrough for the budding Qingdao venture capital ecology at that time. However, during this period, Qingdao venture capital was still fragmented. It was not until 2010 that Qingdao set up the first municipal guidance fund with a scale of 500 million yuan that it marked the beginning of systematic investment. To really feel the "water temperature" of venture capital, it will be five years before the national "mass entrepreneurship and innovation" - as can be seen from the six unicorn enterprises mentioned at the beginning of the article - their establishment time is roughly distributed in 2014-2017. This represents the first wave of entrepreneurship in Qingdao. Another important time node is fast forward to 2019. The landmark event of that year was that Qingdao held the first "Global (Qingdao) Venture Capital Conference". According to the official report, the conference "has more than 5000 people signing up, more than 3000 people attending, and more than 1000 people giving advice", which is "unprecedented". And then Qingdao issued the "Ten Rules for Venture Capital Investment in Qingdao", proposing the most generous regulations for venture capital support. To take one example, Qingdao took the lead in reducing the proportion of reinvestment of municipal guiding funds from 2 times to 1.1 times. This seems to be the trend and logical at present, but it was amazing at that time. It was once called the most relaxed (from another point of view, the most "radical") return investment standard in the country, which caused a lot of trouble in the venture capital industry nationwide. Therefore, 2019 can be said to be a landmark node for Qingdao to fight high and participate actively. Behind the "radical" is the urgent transformation needs of Qingdao. Cities dominated by traditional manufacturing industries are all faced with upgrading to high-end, intelligent and green industries. Qingdao is one of the fastest moving cities. "Traditional white goods can no longer be regarded as an advanced manufacturing industry. They found that the localization rate of some high-end chips and other upstream links was low, and there was a risk of getting stuck," Liu observed. At the 2019 venture capital conference, the leaders of Qingdao also said frankly that Qingdao has a unique resource endowment, prominent regional advantages, convenient transportation, strong industrial foundation, and a well-known city brand at home and abroad. It is a city of great cultural and development charm in northern China, but the quality of development does not match the resource endowment. If we zoom out a little further and look beyond Qingdao, Qingdao is not only Qingdao in Shandong, but also Qingdao in northern China. Therefore, in 2019, Qingdao proposed a new urban strategy: to be a major node city in the economic corridor of the "Belt and Road" New Eurasian Continental Bridge, and a "dual positioning" city as the strategic fulcrum of maritime cooperation. So to some extent, The rise and fall of Qingdao represents the rise and fall of the north. This is in response to the slogan of Qingdao: "Investing in Qingdao is investing in the national strategy.". To achieve these strategic goals, of course, we must rely on innovation. "Real talents will not be satisfied with Qingdao giving them a set of seascape houses to see the sea. What they need is to start a business and realize the value of their own innovation. Venture capital is the capital force that can help talents realize their dreams." So, The inherent needs of industrial development, the major upgrade of urban strategy, and the "Tianshi" of the opening of the science and technology innovation board in 2019 have jointly contributed to the leap forward development of Qingdao after 2019. At the end of 2019, there were 271 private fund managers in Qingdao, 614 of which had been registered, with a fund scale of 56.4 billion yuan. By the end of 2023, there will be 375 private fund managers in Qingdao, of which 2535 have been registered, with a fund management scale of 196.4 billion yuan. The growth rate of Qingdao private equity funds and managers has been higher than the national average for five consecutive years, maintaining a leading growth trend in the country. State owned Assets Trading, Going New The above data shows the explosive growth of Qingdao venture capital after 2019. There is no doubt that the key driver is Qingdao state-owned assets. As mentioned above, in 2010, Qingdao set up a municipal guidance fund, which is a major player in the field of venture capital in Qingdao. After 2019, the municipal guidance fund ushered in an important upgrade, and other state-owned LPs also went from behind the scenes to in front of the stage. In 2019, Qingdao Guiding Fund, together with Qingdao Urban Investment, Qingdao Guoxin, Shandong New Energy Capital and other state-owned institutions, launched the first 12 billion yuan (50 billion yuan in total) Qingdao Science and Technology Innovation Master Fund, which was one of the largest master funds in Shandong at that time, focusing on supporting Qingdao's original innovation, achievement transformation and high-end technology industrialization project cultivation. The establishment of this science and innovation fund has changed the pattern of venture capital investment in Qingdao. As of July 2023, there are more than 70 sub funds and direct investment projects of the Science and Technology Innovation Foundation, with a total scale of more than 20 billion yuan, and a group of leading venture capital institutions such as Meihua Venture Capital, Yuanhe Origin, Tongchuang Weiye and CICC Capital have been successfully introduced. Two years after the establishment of the Science and Technology Innovation Master Fund, the Qingdao Guiding Fund has been restructured into Qingdao Innovation Investment Co., Ltd., and its business scope has gradually expanded from simply managing the government guiding fund to an investment platform company of "fund+direct investment". Data shows that by the end of 2023, the Qingdao Guidance Fund has set up 141 equity participation funds, with a total scale of more than 140 billion yuan; It has completed equity investment in more than 1300 projects, with an investment amount of 51 billion yuan. Among them, there are nearly 500 direct investment projects in Qingdao with an investment amount of 22.1 billion yuan, and 71 direct investment projects have been IPO listed. In addition to the municipal guidance fund and the science and innovation fund. The reform of state-owned enterprises in Qingdao has also promoted the development of state-owned LP. In 2021, SASAC will officially implement the second batch of comprehensive reform experiments of state-owned assets and enterprises. Following the first batch of Shanghai and Shenzhen, Qingdao has become one of the new batch of pilot cities (Shenyang, Hangzhou and Xi'an are also approved). On the eve of the approval, Qingdao has approved four enterprises, namely Qingdao Urban Investment Group, Qingdao Huatong Group, Qingdao West Coast Development Group and Qingdao State Investment Corporation, to take the lead in launching the pilot reform of state-owned capital investment and operation companies. In the following four years, Qingdao state-owned assets, represented by the four companies mentioned above, acted frequently and prominently in the primary and secondary markets. According to statistics, in the secondary market, Qingdao state-owned assets have successively acquired 14 listed companies. Just in the past May Day, Qingdao State owned Assets launched the acquisition of Ruilian New Material (688550) and Colin Electric (603050). In the primary market, state-owned companies above have also become the main source of LP. For example: If it is said that the municipal guidance fund was "unique" before 2019, now the LP ecology composed of municipal and district state-owned assets can be called "spring scenery". Of course, the investment goal of state-owned assets must ultimately be reflected in the city's science and innovation enterprises and industrial ecology. Data shows that by the end of 2019, there were 39 listed companies in Qingdao, and by the end of 2023, this number has increased to 67. The growth rate of science and technology innovation enterprises is not small. By the end of 2023, there will be more than 9000 technology-based SMEs, with a year-on-year growth of 33%, ranking first in the province in terms of the number of recognized SMEs; The total number of high-tech enterprises was about 8000, up 20% year on year. In terms of industrial ecology, Qingdao is gradually shifting from traditional manufacturing to emerging industrial systems focusing on electronic information, advanced manufacturing, biomedicine, etc. Qingdao's two industrial clusters of rail transit equipment and energy conservation and environmental protection have been selected into the first batch of strategic emerging industrial clusters in China; Qingdao's industrial Internet and integrated circuit clusters were successfully selected as strategic emerging industrial clusters in Shandong Province. In 2019, Qingdao proposed to build a global venture capital center to promote urban innovation and development. Now, five years later, this island of youth, the capital of manufacturing, is undoubtedly riding the wind and waves to "new". reference material: 1. Qingdao Municipal Venture Capital Guidance Fund Management Center, Qingdao Venture Capital History (1995-2020) 2. Business Week, Qingdao's state-owned assets story in the "3 trillion" 3. State owned asset think tanks and Qingdao state owned asset tycoons have sprung up capital markets with frequent big moves 4. Rising Qingdao industry and advancing Caos
