2016.09.30 Lin Ling Views:
TMT has become the latest darling of investors over the past five years. It is helped by the fast-developed smartphone and mobile internet industries and the inclusion of O2O. The digitalization of traditional Chinese manufacturers and their new business models are also part of the reason.
TMT has become the latest darling of investors over the past five years. It is helped by the fast-developed smartphone and mobile internet industries and the inclusion of O2O. The digitalization of traditional Chinese manufacturers and their new business models are also part of the reason.
In Lin Ling’s view, if China can give birth to Baidu, Alibaba, and Tencent, more world-level enterprises will be born out of the same land as well.
In industries, many portfolio companies in niche markets are gaining momentum. Their strength will be enhanced by the increasingly developed capital market and finance industry in China.
Unsophisticated companies and capital lend TMT companies great untapped potential, said Lin. Meanwhile, start-ups need a huge amount of capital to grow, which lends opportunities to the deeper integration of industries.
A TMT fund will be raised to invest in content-centered consumption and entertainment and “Internet+”. To be more specific, automobiles, tourism, house decoration, education, health care and finance will be among our target industries. The latest development in tech industries will be another focus.
The above are key points made by Lin Ling, a CoStone partner, in an interview with the Securities Times.
(1) Is there any investment opportunity in China's TMT industry when the secondary market is in turmoil, which comes along with a reduced P/E ratio in the TMT industry and the tight investment and financing in the primary market?
(2) Which industries will TMT enterprises try to step in?
(3) Are highly valued unicorns still worth investing in?
Lin Ling shared his insights and demonstrated that the TMT industry is more about investment opportunities than challenges.
Rewritten by Chen Cong, Edited by Li Yunzhen, Du Zhixin
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
