China Soft Capital Management Group Co. LTD
As a comprehensive investment company, CSC focuses on the national strategic emerging industries. With its orientations towards new-generation information technology, high-end equipment manufacturing, culture, education and health, CSC has formed a unique trinity of comprehensive fintech business system. Based on its professional resources, CSC serves hi-tech enterprises, searching for investment opportunities, and forms its unique competitive edges.
Firstly, CSC has provided intellectual property capital-raising service towards micro, small, and medium-sized enterprises (MSMEs) through its intellectual property funds. Due to the government's policy of mass entrepreneurship and innovation, a large number of MSMEs has sprung up. These enterprises have developed rapidly but their high business risks have created the need for financial support. . For financial institutions, the key to solve problems during financial activities including high costs is the how to make credible valuation of those corporate value, especially the intangible assets and technical value. Beijing Techina soft Intellectual Property Fund Management Co., Ltd., a subsidiary of CSC has launched "Growth Loan with Equity Option", an investment-loan linkage product, with "equity & intellectual property" as collaterals to assist high-growth companies in obtaining large loans from banks and gained investment options from them. This business concentrates on investing in and supporting technology-based enterprises with core technologies, effectively helping high-growth enterprises solve the problems of debt financing of light assets, unsecured assets, and low credit lines, in total it has helped enterprises obtain more than RMB 2 billion bank loans. At the same time, taking the growth loan as the project pool, CSC picks the ideal project for equity investment and currently has invested more than 20 projects. This unique "Techina Model", which is standardized, large-scale and duplicable, has been widely recognized by the society and become a strategic partner of bank investment-loan linkage,. In 2017, the model was successfully landed in Hunan Province and was entrusted with the management of the intellectual property operation fund for key industries set up by the State Intellectual Property Right Office in Hunan Province.
Secondly, we have created a financial service ecosystem for the high-growth S&T enterprises with our focus on the technology venture capital. CSC's tech venture capital business has always focused on emerging industries driven by national strategies, especially those premier enterprises from new-generation information technology and high-end equipment manufacturing industries that are in their growth stage. We have made outstanding achievements in deeply exploring investment opportunities, advancing the fund's investment and successful exit. By the end of 2019, CSC had invested in more than 70 projects, more than half of which has been exited successfully, and the overall IRR is over 36%. Below are some representative cases: In April 2011, Focused Photonics Inc.(FPI)(300302.SZ) had its IPO on the Growth Enterprise Market(GEM), this project generated a total return of 7 times of the investment, with the annualized rate of return of 90%; In March 2012, TOYOU(300203.SZ) launched its IPO on the GEM, this project generated a total return of 8 times of the investment, with the annualized rate of return of 120%; In April 2015, B-SOFT(300451.SZ) was first listed on GEM; In August 2016, FLOWER KING(603007.SH) hit the IPO market on the main board; In March 2017, MEGEMEET(002851.SZ) had its IPO on Small and medium-sized enterprise board (SMEs board).
Thirdly, we have taken M&A and investment as a breakthrough to boost the transformation and development of "new real economy" enterprises. With its strong asset integration capability, CSC is able to locate undervalued enterprises, and gain returns through integration and successful exits. CSC's M&A and investment is mainly cooperated with listed companies. We jointly establish industrial investment funds focusing on high-end manufacturing, culture and education, science and technology and other capital-intensive industries, searching for potential integration opportunities across the country and around the world. CSC assists the relevant leading enterprises to carry out horizontal, vertical or overall industrial M&A and investment and provide customized services for strategic development, assists enterprises in improving corporate fundamentals, and ultimately enhance their industry position through asset integration and internal generation. Typical Successful M&A Cases include: Kaiwen Academy (002659.SZ) transformed into international education; China High-Speed Railway Technology Co., Ltd. (000008.SZ) diversified strategic layout, China Soft Technology (002453.SZ) transformed into fintech industry, etc.
Fourthly, taking FoF portfolio fund as a platform, CSC provides multi-asset and multi-strategy products allocated in the secondary market with high liquidity and safety. The rapid changes of macro cycle have made quantitative hedged FoF portfolio an important choice for institutional investors. Hangzhou China Soft New Momentum Asset Management Co.,Ltd., a subsidiary company of CSC group, is committed to building a full-process FoF portfolio fund solution, launching a complete set of "allocation-selection-management" business system including asset and strategy allocation, fund evaluation and selection, post-investment management and risk control. Particularly, its independent research and development project --- FoF business full-process management system --- Fund Access and Evaluation System (PMS), Post-investment Risk Identification and Risk Control System (AMS) has been widely recognized by institutional clients because of its credible data system and selection criteria, comprehensive external service functions and perfect coverage of post-investment management. By the end of 2019, New Momentum Asset Management FoF Business Asset Under Management (AUM) has exceeded 5 billion RMB, making it one of the largest private FoF funds in China. Its main clients include banks, central enterprises, large state-owned enterprises, listed companies, securities companies, trusts and family wealth offices, etc.
Fifthly, CSC takes the transformation of scientific and technological achievements and the upgrading of post-investment technologies as guarantee to establish the whole chain of scientific and technological innovation. In recent years, China has attached great importance to scientific and technological innovation, and regarded innovative development as the first of the "five development concepts". CSC and Z-Park Techina Intellectual Property Financial Service Group jointly established L'ontologie, through the integration of more than 100 million patents, more than 140 million scientific and technological papers, more than 40,000 scientific research projects from EU and the US, million-sized big data of technology enterprises and talents, it is able to monitor global cutting-edge scientific and technological progress in real time, directly locate technology and its holders and research and development team, and accurately find and track the latest progress. Besides, with the help of AI tools including knowledge engine, neural network and natural language processing, it can make deep research and analysis on the technical direction of major emerging technology industries, this can be an effective technical risk control method to assist financial institutions in financing and investment. Our company also applies mature international methods and tools for improving innovation capabilities to assist enterprises to develop technology and patent layouts, optimize R&D management processes and provide full-process training and consulting services, which can effectively support technology upgrades of technology-oriented enterprises after investment, promote result transformation. CSC has built relationships with a number of financial institutions, research institutes and high-tech enterprise clients.
(1) Lead direct investment to boost the rise of China's information technology and high-technology industry Information technology is a strategic pillar industry that promotes economic and social development, and is gradually becoming one of the important indicators to measure the overall competitiveness of a country. China has actively advanced the development of information technology. Especially, the "2018 China Central Government Work Report" specifically included the development of artificial intelligence and Internet of Things as the national strategies. Through direct investment, CSC supports technological innovation and entrepreneurship, and promotes the development of strategic emerging industries, now it has a talent team with both domestic and foreign profession and market experience. Among them, the average working age of senior investment executives is 15 years, 73% of the staff are from investment business line, more than 70% of them have master's degree or above, and 100% of them have passed the China Fund Qualification Exam. So far, the group has 8 private equity fund managers and 2 private securities fund managers. It has set up more than 20 funds and managed assets of more than 20 billion RMB, providing a variety of investment products and services for domestic and foreign investors. After 11 years of efforts, CSC has become an excellent domestic equity investment group with technology finance as its core competence.
(2) Innovate service modes and provide financial support for the development of micro, small and medium-sized technology enterprises (MESEs).
Providing financial services for MESEs has always been the concern of society. In 2015, the State Council of People's Republic of China issued "Several Opinions on Deepening System and Mechanism Reform and Accelerating the Implementation of Innovation driven Development Strategy", proposing to "select qualified banking financial institutions to explore pilot investment and loan linkage business". In order to solve the financing problems of MESEs, especially technology enterprises with light assets, CSC and its partners jointly launched intellectual property financing services, starting with "Growth Loan with Equity Option", and with "equity investment" and "merger and acquisition investment" as driving forces. At present, CSC has helped more than 200 MESEs in Beijing and Hunan province in realizing the landing of intellectual property financing business and transformation of technological achievements.
(3) Promote the combination of industry finance and innovation, serve the new real economy
Under the guidance of the global industry 4.0 wave and the domestic "manufacturing power" policy, the new real economy represents the future of China's economy. Support of strong capital market is necessary for the development of the new real economy.. CSC has invested in new real economy enterprises, represented by Kaiwen Academy (002659. SZ), China High-Speed Railway Technology (000008. SZ), Focused Photonics (300203. SZ), Megmeet (002851. SZ), B-Soft (300451. SZ), etc., and helps them to gain breakthrough in "new technology" and building "new business model". In the process of investment, CSC displays its professional spirit, upholds the professional service attitude, pays attention to the enterprise's comprehensive ability, development prospect, and resource allocation, rather than the short-term fluctuation of performance, and focuses in-depth on the long-term sustainable development. CSC fully supports scientific and technological innovation, and is committed to "become the entrepreneur behind the entrepreneur", adding new impetus to China's "supply side reform" and the revitalization of the real economy.
(4) Increase financial technology investment and promote the transformation of scientific and technological achievements
Fintech is in the stage of acceleration and innovation. Advanced technologies such as artificial intelligence, big data, and biometrics are promoting the financial industry to evolve towards the Internet and the informatization field, in order to effectively solve the problems of financial business innovation, safe and efficient transaction, and the integration of technology and intelligence. In addition to active investing in the fintech field, CSC has built 4 internal intelligent business systems. The 1st one is the investment knowledge management system which covers the whole process of investment and help achieve business collaboration. The 2nd one is the corporate value evaluation system. It can be a powerful tool which performs intelligent valuation and risk evaluation of the target enterprises, and revalues the invested enterprises, becoming a powerful tool to assist decision-making and post-investment management. The 3rd one is the technology and patent evaluation system. Based on industry data and experience models, it serves for intellectual property pledge financing and the transformation of scientific and technological achievements. The 4th one is the hedge fund asset allocation system, providing services for the institutional investors in the secondary market.
(5) Adhere to public welfare and pursue responsible investment
During its development, China Soft Capital has never forgotten to repay the society, and has always been fulfilling the corporate citizenship and social responsibility, and funded numerous public welfare institutions in different industries including education, research and environmental protection so as to help realize the common progress in the fields of nature, technology and social environment. In 2015, CSC established the Beijing China Soft Science & Technology Development Foundation, which has donated to many public welfare organizations such as SEE Foundation, Shenzhen MCF Wet Land Protection Foundation, One Foundation, Wild China Foundation etc. Foundation members and volunteers went to Beijing, Guizhou, Jiangsu, Gansu, Shandong and other places for many times to help children in need, actively organizing and promoting youth science education activities. Beijing China Soft Science & Technology Development Foundation is also the first principal of double trustee charitable trust in Beijing, with a cumulative donation amount of more than 15 million. At the same time, relying on CSC's influence in science and technology venture capital, the foundation has provided public welfare funding for innovative talents and science educators, deeply involved in the operation of a series of think tanks and research institutions represented by China New Supply Economics Research Institute and Zhongguancun Internet Financial Research Institute, and supported academic research of macro policy and industry trends and contributed to the continuous promotion of China's economic reform and development practices.
Company websites: http://www.chinasoftcapital.com.cn