Unicorn excavator The selection of targets may not be the top three in the industry

Reporter: Gao Yuan

Camera: Hou Tianyi

Zeng Zhijie, managing partner of Yuanhe High Hope Innovation Growth Fund. He was the Senior Managing Director of CITIC Capital Holdings Limited, the General Manager and Managing Partner of Kaixin Venture Capital Management Limited, and has over 18 years of venture capital experience. He has successively managed the venture capital part of Kaixin Venture Capital Fund, CITIC Capital Venture Capital USD Fund and CITIC Capital RMB Fund, and is one of the few investors in China with rich experience in dual currency fund management.

A collection of ideas

Seventeen years ago, the layout of chip semiconductors stretched the cycle to see time always pays off

Internet model innovation encounters bottlenecks The digital economy will recreate traditional industries

The digital economy will have greater achievements in the domestic unified market scenario

There are still investment opportunities in physical stores The core is technology-driven

Hardware and content will eventually reach a balance, but content is more important

The selection of targets may not be the top three dark horses in the industry have these characteristics

Investing is about looking at people, and a perfect resume is not so important

The key to looking at people is to look at three points

Interview summary

Seventeen years ago, the layout of chips and semiconductors stretched the cycle to see time always pays off

Gao Yuan: Thanks to Zeng Zong's interview with First Finance, you have already invested in china's semiconductors and chips in 2005, and this industry has a long cycle and large investment. What has been the profitability of the underlying so far? You invested in this track 17 years ago, how do you convince yourself and the investors at that time?

Zeng Zhijie: I joined Walden International around 2000, which is one of the few institutions that focuses on investing in semiconductors even in the United States, and at that time, investing in semiconductors was not a very fashionable thing. Because everyone will invest more in the Internet, communications, TMT is good, few institutions are willing to pay special attention to investment in the semiconductor field, because semiconductors are heavy investment, the cycle is very long, technology-intensive industry, in the end it is a very hard job, just because no one did it, but Walden International was in the United States at the time, including in China, we actually have the opportunity to invest in a lot of good targets.

Let me give you an example, when we were in 2001, we invested in SMIC. This way we have invested in china's well-known semiconductors, and many of these semiconductor companies are invested by us. But it's true that investing in semiconductors until a few years ago was really hard work because the cycle was too long. In the past two years, thanks to the changes in the macro environment, semiconductors have suddenly ushered in a big spring, but we have come to people who are actually very emotional, because it is really a very long investment cycle, 17 years ago on the investment in chips, semiconductors This track I think time will pay off, on the other hand, this is also closely related to the times.

Internet model innovation encounters bottlenecks The digital economy will recreate traditional industries

Gao Yuan: At present, many of these companies and investors who invested in Internet model innovation in the past have now stopped talking about Internet model innovation, and seem to think that it is a thing of the past era, and even feel that some have no technical content, I don't know how you look at this problem.

Zeng Zhijie: The Internet has encountered some low tides in the past two years, but it does not mean that there are no opportunities in this field, and I think that it is only 30 years that human beings have the Internet. There is still a lot of opportunity in the future. But in the past two years, the Internet has encountered some setbacks, and I don't think the Internet has no technical content, I can only say that many models of the traditional Internet are not established in the current market environment. For example, in the traditional model of the Internet industry in the past, everyone likes to use this model of holding high and burning money to do things, but in the current market environment, this model is not very established; the traditional barbaric growth, borderless expansion, etc., are indeed restricted in the current market environment; the traditional secondary market also gives a high valuation for Internet companies. Now everyone is also aware of the many problems faced by these companies, and the valuation has also been greatly affected. It is true that it may be a big blow to the morale of investors. But if you want to stretch the cycle, these things are normal. We call such enterprises the digital economy, such as the JD Logistics, SF, Jitu, etc. we invest in, and we summarize all such enterprises into the category of digital economy.

The digital economy will have greater achievements in the domestic unified market scenario

Gao Yuan: If we superimpose digital technology and targets like JD Logistics into the scene of a unified domestic market, what opportunities does it bring to our investment industry?

Zeng Zhijie: It will bring a lot of opportunities. China has been ahead of the world in many fields over the years, in fact, thanks to the contribution of these companies, they have formed China's entire unified market and rebuilt China's entire circulation channels. It is precisely because of these big Internet companies, big logistics companies, we actually skipped many countries in Europe and the United States, in the retail end they have done some things for many years, we completely jumped these steps over, but our retail system will be more effective and more efficient. The Chinese we live here enjoy the convenience of life, and now we are even more convenient than the developed countries in the West.

There are still investment opportunities in physical stores The core is technology-driven

Gao Yuan: You studied and lived in Japan, and I remember that there was a Japanese who was very proud of his 7-11 convenience store model, which could be spread all over the streets, but later found that Chinese much more convenient than them.

Zeng Zhijie: Yes, the technology of 7-11 was very advanced in the 90s, when 7-11 in Japan was already networked, of course, its earliest was still a network connected with Dos technology, and at that time, 7-11's headquarters in Japan could see the daily sales data of all parts of the country. It was even able to see whether the person who bought the bottle of shampoo was a man or a woman, and it was under the conditions at the time that Japan's retail industry was actually the world's leading, and later, we skipped this step altogether.

GAO Yuan: From a business point of view, is there still an opportunity for physical and chain stores to flourish again, with the help of the digital technology and digital economy you mentioned?

Zeng Zhijie: There will still be, but it will take a new form. Because we are also an investor in Wanda Business Management, when investing in this project, we are also thinking about our investment logic, people still can't stay at home every day, just rely on mobile phones to solve all things; physical business also has its space and opportunities, but it is possible that everyone is not saying to go to shopping mall to simply buy something, everyone may be more experience or social or how;

In fact, for These physical retail industries in China, there are higher requirements, you have to keep iterating, evolving, and then to 2.0 to 3.0, we invest in traditional industries more to see if it has improved its operational efficiency through new technologies. If there is a target that we can look at, if not, we generally will not touch, whether you are a traditional industry, or an Internet company, we prefer to invest in these technology-driven companies.

Hardware and content will eventually reach a balance, but content is more important

Gao Yuan: Are you still maintaining the habit of reading every day?

Zeng Zhijie: Yes, reading for our line, can get enough information, meet with a variety of people, I think for our line is very critical, I read a lot of books, all kinds of books, my Kindle has two or two or three hundred books, of course, most of them have not been read, I will spend a lot of time on reading.

Gao Yuan: You like to read, and you have used the Kindle for a long time. At present, there is a lot of hardware in the market, such as Huawei, Xiaomi are doing this kind of hardware, will you consider investment opportunities in other such targets?

Zeng Zhijie: Hardware is actually not so important, to be honest. Whether you read a book on a Kindle, on a phone, or on a PC, I don't think it matters that much. In fact, the core is important in the end, and the content behind it is important. I myself feel that in the end the content will still be king.

Of course, that is to say, the hardware and content of this era will reach a balance in the end, on the contrary, looking at Amazon, the Kindle as a hardware as a carrier, as a device is a bit old, but Amazon's content this piece it is still very solid.

The selection of targets may not be the top three dark horses in the industry have these characteristics

First Finance Gao Yuan: When you choose the target, you did not completely choose the head company, and sometimes you chose the dark horse. How can you define it? Find the dark horse?

Zeng Zhijie: I think there are two points, first, this industry does not have so many top three you can invest; second, if you look deep enough and transparent enough for an industry, we call our own key node companies, if your understanding of the industrial chain is deep enough, in fact, you see the so-called track of these big heads outside, you can see a lot of these small node companies, but these node companies are very critical, if the entire industrial chain leaves them, it will not work. In fact, these companies are also very good investment targets, but you must understand the industry very well.

Investing is about looking at people, and a perfect resume is not so important

Gao Yuan: I found that many investors are very picky about choosing entrepreneurs and entrepreneurs, such as his resume, educational background, etc., but I found that some of the companies you invested in in the past were not like this, and the founders of some companies did not have a good education and did not have a good successful entrepreneurial experience in the past, but you invested in him. I don't know what made you make this decision?

Zeng Zhijie: My investment experience for so many years, I have summed it up myself, a good entrepreneur, a successful entrepreneur, as a person, he may not be perfect in his personality, and many entrepreneurs will have his paranoia. But even if he is imperfect and paranoid, he may be able to do a thing to the extreme. If you are a completely stable person, it may not be suitable for starting a business. Because you mentioned Changshu Auto Accessories, I will tell you what kind of a person they are.

He did not read books, originally came from a carpenter background, started this business from a young age, he can not even speak Mandarin to this day, but he will spend a month a year in Germany, to communicate with people in the German industrial chain. He had a time when the general manager of his company had been inviting an American. What can do business is not the same as a group of people we imagine every day, they have a particularly distinct and vivid place, because if you can do this thing, if the personality is too perfect, it is not very good.

The key to looking at people is to look at three points

Gao Yuan: Sometimes these entrepreneurs are somewhat similar to artists, such as some people, who may have spent the first half of their lives or when they were alive in poverty, found their own works after their lives, and then sold them to sky-high prices.

Zeng Zhijie: Do you think court painters have good paintings?

Gao Yuan: There must be good paintings.

Zeng Zhijie: But there are not many such great painters who can be passed on to future generations.

GAO Yuan: Right. It's true.

Zeng Zhijie: If an entrepreneur's growth is too smooth, sometimes it is not necessarily a good thing, because investment is an art in the end. All the external conditions were right, and in the end he was still uncertain. First, he must also be a very righteous person, there can be no crooked doors, crooked doors and evil ways will eventually bring down the enterprise; second, this person still has to have passion, passion and paranoia; third, as you just said, his past experience, background, resources are not suitable to do this thing.

"Investors Say" is a professional talk show focusing on stock investment and equity investment launched by First Finance. The invited guests come from professional investment companies, all of which personally manage hundreds of millions of assets, and are truly "powerful factions". The program focuses on emerging industries, macroeconomics, and investment concepts, excavates the most valuable viewpoints, and provides a strong reference for your investment decisions.

Views are for informational purposes and do not constitute investment advice

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