2019.12.26 Chen Xiachang Views:
Zhang Wei indicated that OmniVision’s original and world-class technologies were the reason why CoStone would hold a large position in it. OmniVision was once the biggest supplier of Apple’s iPhone. It is still one of the top runners even if Sony has robbed Apple’s orders. Sony, Samsung and OmniVision are now the three most important gamers in high-end cameras whose technologies are far advanced than any other competitors in this circle. OmniVision has the most influential clients in the world. It will definitely be the best semiconductor company in China once it goes public in A share, and a rare bid.
On February 2016, OmniVision Technologies, Inc. became private and delisted from the U.S. market.
On December 2017, major PEs including CoStone Capital invested in OmniVision.
On August 2019, Willsemi acquired OmniVision.
On November 5, 2019, Willsemi’s market value soared to ¥100 bn ($15.483 bn),
On December 25, 2019, Willsemi’s market cap hit ¥140.768 bn ($21.795 bn), making it the most valuable stock in China’s chip industry.
CoStone obtained 4X unrealized profits from OmniVision in less than two years. Zhang Wei, chairman of CoStone Capital, once said that investment should go to enterprises with a margin of safety. He believed that the key to hard technology investment lied in the original and world-class technologies. Once he saw the chance, he would go for it. His investment philosophy brought him another success.
Zhang Wei indicated that OmniVision’s original and world-class technologies were the reason why CoStone would hold a large position in it. OmniVision was once the biggest supplier of Apple’s iPhone. It is still one of the top runners even if Sony has robbed Apple’s orders. Sony, Samsung and OmniVision are now the three most important gamers in high-end cameras whose technologies are far advanced than any other competitors in this circle. OmniVision has the most influential clients in the world. It will definitely be the best semiconductor company in China once it goes public in A share, and a rare bid.
Zhang Wei, founder of CoStone Capital, and Yang Shengjun, Managing Director of CoStone Capital, illustrated the logics of this investment and revealed their confidence in China’s semiconductor industry.
Above: Excerpt of STCN’s report on CoStone’s investment on OmniVision. Please refer to this link to view the report in full: http://stonevc.com/news_view.aspx?TypeId=5&Id=800&Fid=t2:5:2
Rewritten by: Luo Xinying, Edited by: Du Zhixin, Wei Yiyi
The year 2019 marks the fortieth anniversary of China’s Reform &Opening-Up, once again, we meet at the turning point of history. What’s the next step for the game, is there any clear guidance? The answer is affirmative.
Our country is enjoying a good momentum of development, which does not come from the Washington Consensus nor the Beijing Consensus. China’s experience has proved that both the visible hand and the invisible hand are crucial: the visible hand, stands for the government-led reform, and would yield benefits for reform and opening up; the invisible hand, stands for the Marginal Power represented by the private sector, and would improve economic efficiency and tax collection, create jobs and employment opportunities.
Provided that we want to protect and expand the benefits form reform, three simple but mandatory agreements are to be made and followed: No.1 Private ownership must be recognized, protected and treated equally with public ownership constitutionally, both ownerships are scared and inviolable;No.2 Make further clarification of the principal position of market economy, “deepen economic system reform by centering on the decisive role of the market in allocating resources”, as President Xi addressed in the third Plenary Session of the 18th CPC Central Committee;No.3 Implement the guiding principles of “comprehensively promoting law-based governance” of the fourth plenum. The rule of law is essential for economic growth, irreplaceable to protect private ownership, and necessary to encourage innovation and entrepreneurship.
Above are three rules for us to avoid falling into the Middle-income Trap. Assuming that we are breaking systematic barriers to private enterprises’ participation in market economy, and boosting innovation and entrepreneurship of our society, then we are heading towards a promoting direction. We are marching in the path of light, regardless of the ups and downs of Sino-US relationship, the drop in GDP growth rate, or the monetary policy.
These principals also apply on knowing how better to run a business: don’t be hedged by rules and regulations at the beginning, pay more attention to your survival, and you’ll learn more when you start your second business.
For many years, Huawei has been the only Chinese company on the list of the Top 50 R&D Spenders. Regardless of the economy and its income, what Huawei has been doing is investing in its future, dedicated to R&D, continuously and resolutely. This provisional work underscores Huawei’s accomplishments, making Huawei anindustry leader.
So, there are standard answers on how to run a company,which could be summarized as concentration and professional dedication, continuous investment on innovation and trying harder in R&D. Entrepreneurship is also important, every single company needs entrepreneurs to push aside all obstacles and difficulties, to implement strategies and ideas. We, as investors, are destined to look for such outstanding entrepreneurs and their companies, invest in them and partner with them.
At this key point of history, a country, a company, or asingle individual, will all need to find the right path. Four decades after the Reform and Opening-up, it’s time to learn from our experience and stop “wadding across
