Report on China’s equity investment market in 2019-2020 From 36Kr

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The following is the Report on China’s equity investment market in 2019-2020 From 36Krrecommended by recordtrend.com. And this article belongs to the classification: Investment & Economy, research report.

“The year of the black swan” – 2020 is nearly half way through. As of the end of May 2020, the number of transactions in China’s equity investment market was 1543, which is the fifth quarter since Q1 of 2019 when the number of transactions fluctuated continuously. In terms of transaction numbers, there are fewer and fewer companies that can finance: in 2020, the number of successful financing companies in Q1 was 61% of the same period last year. However, in terms of total transaction amount, 2020q1 increased by 54% compared with 2019q1. This shows that: some sub sectors and specific companies are lucky to receive the olive branch of capital in the chaos, and the head companies have completed an amazing amount of single financing.

Based on the above, 36 krypton Venture Capital Research Institute has studied the investment and financing situation of China’s equity investment market since Q1, 2019, and reviewed and compared the fluctuation changes of the overall market since 2015. This paper focuses on the four areas where capital is particularly active in the epidemic: enterprise services, medical and health care, live entertainment and online education, and sorts out the basic industrial logic and subdivision fields of the four key tracks. The report will focus on answering the following questions:

What are the changes of China’s equity investment market and four key areas (enterprise services / medical health / entertainment live / online education) in terms of investment hotspots, investment regions and investment stages in 2019? What are the most active investment institutions? Where are the new unicorns launched? What are the major financing events and M & A events that deserve attention in the four major areas? What are the layout of the Internet giants and traditional leading enterprises in the four major fields that can not be ignored?

36 krypton thinks: the new crown epidemic has completely calmed the primary market, which is already in the trough, and has brought inevitable resistance to the market correction in the short term. However, the start-up companies and investment institutions have shown amazing resilience and strong fighting power in this crisis. Adapting to the current situation, adjusting strategies and returning to value will remain the same theme this year and the next one or two years.

However, we can still observe new exciting points and changes in China’s equity investment market. Here are our findings:

The “black swan” broke the pace of market correction and investment institutions were cautious

Looking back at the past five years, the whole primary market has expanded unprecedentedly. According to the whale standard data, we have observed that the total amount of transactions in China’s equity investment market during the period from 2015q1 to 2020q1 reached 7.5 trillion, and the peak number of transactions occurred in 2015q4, reaching 4691. The peak of transaction amount appeared in 2017q2, reaching 699 billion yuan in a quarter.

A clear turning point for the market occurred in April 2018. After the introduction of the new regulations on asset management, the liquidity of the primary market was suddenly tightened, coupled with the high valuation of Unicorn, the problems such as the breakup of IPO and the inversion of the primary and secondary markets emerged, which forced the whole venture capital industry to restructure and clear up. Compared with that in 2018q4, the overall trading volume of the 2019q1 market dropped by half to 251.8 billion yuan, while the number of transactions fell to the level of 2015: 1275. The whole year of 2019 is generally defined by the industry as the trough of cycle and the cold winter of capital, which was expected to be adjusted and improved in 2020.

However, the new outbreak of black swan broke the pace of the market. Under the control of the epidemic situation, enterprises can not fully return to work and production, the efficiency of home office management is low, and the consumption demand of large and small b-end and C-end is greatly suppressed. Both the supply side and the demand side are frustrated, and a large number of enterprises are facing business stagnation and tight cash flow.

For investment institutions, the increase of investment risk, the uncertainty of investment return, and the more cautious to take out. By 2020q1, the total number of transactions in the primary market was only 842, falling to the quarterly lowest level in five years, including the number of projects disclosed after investment delivery at the end of 2019.

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