2019.11.30 Su Wen Views:
“New contents and forms of the M&E industry can find traces in the past. They are embodied by new ways of consumption through new media.”
Lin Ling: M&E Investment, Changes Often Happen
Lin Ling, one of first investors who kept his eyes on the M&E industry, cultivated 100X-return projects like Everyday Network (300295.SZ) and influential companies like Huashang Media Group, Motie, Omnijoi (300528.SH), SilkroadCG(300556.SH), Original Force, Ergeng, MeWe Media and Spiritual Wealth Club. Being in the competition for 16 years, he has gone through the rise and the fall of M&E industry. He is still confident about the way ahead of this industry. This explorer as well as an alchemist has developed a set of mature investment philosophy. He divides M&E companies into the following three types:
First, technology-based companies. These companies normally possess core industrial technologies which enable them to offer exceptional services of cultural and creative products and social media like animation, special effect and VR. The best demonstrations are SilkroadCG (300556.SH) and Original Force.
Second, platform-based companies. These companies will first draw high volume through online and offline measures, create their own business ecological systems and then gain profits from their platforms. Firstly, an excellent platform should possess big amounts of content providers and consumers with strong buying power. Secondly, the platform should generate ways of converting contents into cash or introducing the consumers to other profitable channels. Thirdly, the platform should create some barriers and thresholds to secure its originality and competitiveness. Huawen Media Group (000793.SZ), Everyday Network (300295.SZ) and Ergeng are strong proves.
Third, content and IP-based companies. A hit IP is rare, but contains enormous economic potential. However, the sustainability and structure of an IP should be taken into consideration. CoStone normally values streamlined content production. In other words, the quality content can be produced regardless of individual capability, wills, experience and exterior factors. The factory-like production model, long adopted by Hollywood, can reduce risks on M&E investment. Omnijoi (300528.SH), MeWe Media, Spiritual Wealth Club, lrts.me and Vancools demonstrated it.
Lin Ling concluded, “New contents and forms of the M&E industry can find traces in the past. They are embodied by new ways of consumption through new media.” He indicated two important concepts – technology and channels shift. As the Internet, the mobile Internet, 4G and 5G are widely applied, more forms and communication channels of contents are created. “We should focus more on the relationships between technological advancement and find opportunities to bring contents closer to consumers. Because it is nurturing many quality M&E projects and sound investment” he added.
Above: Excerpt of the interview with Lin Ling from Manager. Please refer to the link below to view the interview in full: http://stonevc.com/news_view.aspx?TypeId=5&Id=795&Fid=t2:5:2
Rewritten by: Luo Xinying, Edited by: Du Zhixin, Wei Yiyi
Over the past year, the bull market returned, with technology leading the way.
As I said back in October 2024, the rally that began on September 24 was not merely a rebound, but a reversal. Since then, China's capital markets have undergone a broad revaluation, moving from undervaluation toward fair value.
The Shanghai Composite Index reached its highest level in a decade. The "Yi-Zhong-Tian" trio—Eoptolink, Zhongji Innolight and TFC Communication, three prominent Chinese optical communications stocks—saw their share prices multiply severalfold in a single year. Cambricon's market capitalization briefly exceeded RMB 600 billion. Elsewhere in the technology sector, triple-digit price-to-earnings ratios and valuations exceeding RMB 10 billion became commonplace.
Some investors were greedy; others, fearful. Still others asked me: Are technology stocks in a valuation bubble?
My answer is that what we are witnessing is the hunger and anxiety of an era, reflected in the capital markets. Once you understand this, the current fervor for technology investing is no longer difficult to explain.
Investment has nothing to do with macroeconomics, but everything to do with geopolitics.
China-US relations will shape the investment landscape for decades to come. Geopolitics has played a major role in shaping the hunger and anxiety of our times, fundamentally reshaping the way we invest.
What, then, lies at the heart of China's hunger and anxiety?
The Fourth Industrial Revolution is already underway, yet China has not fully overcome the technological shortcomings left by the Third. There is no time to lose.
This is why some people wonder: Why do Chinese computing chip companies command such high valuations when their technologies still lag so far behind NVIDIA's? Why does NVIDIA trade at just 50 times earnings, while a company hailed as "China's answer to NVIDIA" commands a multiple of 300?
To me, this gets the logic exactly backward.
It is precisely because these companies cannot catch up with NVIDIA in the near term that they command a higher strategic premium. The wider the technological gap, the greater the strategic value.
The further something lies beyond our reach, the stronger our hunger. The harder it is to catch up, the deeper our anxiety. If China were to achieve a complete breakthrough in computing chips one day, valuations might actually come down.
Where can one find China's most spectacular natural landscapes?
Much of the answer, I believe, lies in and around the Hengduan Mountains: the Meili Snow Mountains, Jade Dragon Snow Mountain, Mount Gongga, Mount Siguniang, Jiuzhaigou, and many others. Vast differences in elevation and deep fault lines have given rise to landscapes of extraordinary grandeur.
Hard-tech investing follows a similar logic.
Technological gaps, discontinuities in capabilities, and missing links in industrial systems: a leap in difficulty brings a leap in valuation, and a successful breakthrough can, in turn, bring a leap in returns.
This logic extends well beyond computing chips. It is equally evident in memory semiconductors, commercial spaceflight, and other sectors where China still faces substantial technological gaps with other countries.
It was precisely this conviction that led CoStone Capital, starting in 2016, to decisively focus its investments on three areas: hard tech, emerging industries, and life sciences and healthcare. In this context, "hard tech" refers specifically to important industries in which China faces a technological gap with the United States.
Thanks to this forward-looking strategy, CoStone Capital established an early presence across the full value chains of key sectors, including semiconductors, artificial intelligence, and robotics.
Looking ahead, the frontiers of technological progress and industrial upgrading are boundless. Nor can the gaps in hard technology be closed overnight. The twin windows of opportunity presented by technological innovation and the development of homegrown alternatives to foreign technologies have only just begun to open.
The road ahead is long, but the future holds immense promise.
As an investment firm, CoStone Capital will continue to invest where the hunger and anxiety of each era run deepest, move forward with the tensions that shape our times, and extend our reach toward the most challenging—and most important—frontiers.
Spring 2026