2020.06.15 CoStone Capital Views:
Snibe (300832.SZ), Shenzhen New Industries Biomedical Engineering Co., Ltd., a leading Chinese biomedical technology company, sees its price bump up to 24.5 USD/share. It has raised over 10bn USD. In late May, less than two weeks since its IPO, Snibe has attracted 194 renowned Chinese institutional capital managers. This week adds another 24. Over 200 renowned capital managers, by now, have been attracted by Snibe, the newly emerged Prince Charming of China’s A-share market.
Snibe (300832.SZ), Shenzhen New Industries Biomedical Engineering Co., Ltd., a leading Chinese biomedical technology company, sees its price bump up to 24.5 USD/share. It has raised over 10bn USD. In late May, less than two weeks since its IPO, Snibe has attracted 194 renowned Chinese institutional capital managers. This week adds another 24. Over 200 renowned capital managers, by now, have been attracted by Snibe, the newly emerged Prince Charming of China’s A-share market.
“Instruments + Reagents”- A Closed Business Circle
A Closed Business Circle of “instruments + reagents” secures sustainable profits for Snibe. A full and cost-effective product portfolio beefs up its business as well, said Wang Qiwen, a CoStone partner.
The low price makes Snibe equipment available to as many end clients while the reagent makes itself a bread earner of Snibe bringing handsome and sustainable profits. This resembles the business model of the printer industry where companies profit from not printers but consumables like printing papers, toner cartridges, etc.
Snibe, founded in 1995, with the dedication to developing, manufacturing, and selling in vitro diagnostic instruments and reagents has become the largest Chinese manufacturer of chemiluminescent immunoassay instruments and reagents. The industry also gives birth to other bulls like Autobio (603658.SH) and Maccura (300463.SZ). Snibe prospectus unveils 258mn revenue and 118mn net profits with 23.1% and 32.7% compound growth rate respectively in the past four years.
Sequoia and CoStone Capital, two leading partners in China’s capital market are Snibe’s pre-IPO shareholders. After years, CoStone, who started as early as 2014, sees its book profits booming over 10 times.
A fast-growing industry, self-independent core technologies, and a stable and loyal team are the three secrets for CoStone’s handsome return, Wang concluded,
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
