From growth investment to mergers and acquisitions, from consumer brands to supply chains, it has been deeply cultivating the food field for more than 11 years since its establishment, adhering to long-term value-oriented welfare investment, and is known as the "king" of investment in the domestic food field. Not only has it successfully invested in Haidilao, Meituan, Feihe, Weilong and other enterprises, but also extended its investment tentacles to overseas targets that supply the Chinese market.
In the face of uncertainties such as the current COVID-19 pandemic, what changes have taken place in the investment logic over the years? This issue of Global Finance Connect interviewed Wang Hang, founding partner of Welfare Investment and vice chairman of New Hope Group.
Southern Finance: A few months ago, Welfare & Welfare Investment completed the third phase of THE US dollar fundraising, the amount of 800 million US dollars, the source of funds in Asia-Pacific, Europe, North America, South America and other places, in the current economic situation, M&F investment still has such a rapid high oversubscription, does this mean that the global economic market is still more confident in china's consumer market?
Wang Hang: Yes, China is a rare investment treasure in the world, from the supply side, China has the most complete industrial chain in the world and the most powerful supporting capabilities. On the demand side, China is the world's largest single market. China has a team of hard-working civil servants and passionate entrepreneurs, and it trains half of the world's engineers every year. With such an advantage, where do investors around the world not invest in China?
Welfare Investment is a fund focused on the field of food consumption, the industry is stable enough, and the space is large enough. As long as we can give relatively stable expectations to investors around the world, we believe that their preferred investment region in the world is still China.
Southern Finance: How do you view the consumer industry under the influence of uncertain factors such as the new crown pneumonia epidemic?
Wang Hang: The value of the existence of professional investment institutions is reflected in the uncertain environment. These uncertainties will bring about changes in both supply and demand, such as emerging interactive methods such as online live broadcasting, and changes in consumption concepts and consumption paths. In addition, more fundamental and deeper changes such as the structure of the Chinese population and intergenerational transformations will have a more profound impact on consumption. Investment institutions must capture these changes.
On the other hand, for institutions that invest based on an industry, we are more concerned about what those things are unchanged. For the toc business, consumers are pursuing safety, health, nutrition and convenience, and young consumers are also pursuing pleasure and fun. For the to b business, the pursuit is to improve efficiency, reduce waste and sustainability. We hope to solve the pain points of the industry through investment, promote the development of the industry, and also create returns for investors, which is the "change and change" that an investment institution should think about in an uncertain environment.
Southern Finance: Do you think that in terms of project mining and transaction structure, the domestic investment logic has changed in recent years?
Wang Hang: These must be changing. In terms of project mining, from the past pursuit of projects to the creation of projects; investment models, from grabbing projects to cooperating in projects; post-investment management, from the past "light investment management" to the current "heavy investment management". In the past, some things that were thought about before investing, now there may be more things that need to be thought about and managed after investment. For investment institutions, values, methodologies, organizational culture and the creation of core competitiveness must change accordingly.
There are about 25,000 private equity funds on file in China, and there may be 15,000 equity investments. If investment institutions want to survive, they must be different. To this end, Housheng proposed to achieve "one specialty and two innovations". The so-called "one specialty" is to focus on one industry, and only by truly understanding the industry can we provide sustainable value for the invested enterprises. The so-called "two innovations", first of all, is to have the ability to create projects, the pain points of large and medium-sized enterprises are not the same, for the inheritance of enterprises to do a good job of "undertaking investment", for emerging leading enterprises to do a good job of "companionship investment"; secondly, to create profits, to care about the improvement of corporate ebitda (tax, interest, depreciation and pre-amortization profit), not just to care about the change of pe ratio (price-to-earnings ratio).
Southern Finance: After more than 11 years of establishment, Housheng Investment has been focusing on the field of food consumption, what challenges and temptations have you faced?
Wang Hang: There will be, I think, but reverence is greater than temptation. Welfare pursues the concept of "long-termism and value symbiosis", in order to achieve long-term development, some things can be done, some things cannot be done, and investment institutions should empower enterprises and provide value for partners. To solve some pain points in the industry, the industry needs our gang to meet the challenge and do more long-term and more basic things.
Over the past 11 years, looking back, we still have a lot of accumulation. For example, in overseas mergers and acquisitions, we have solid management capabilities after mergers and acquisitions, so we can create projects and talk with leading enterprises and industry leaders. When the entire team has such capabilities, it is more obvious that "long-termism" and "value symbiosis" are not empty words.
Southern Finance: You often mention that we must use the concept of enterprise to treat investment, to be an innovator in the entrepreneur, a scientist behind the entrepreneur, and the role of the investor has changed, what aspects should we help the enterprise?
Wang Hang: The positioning and adherence of enterprises is very important, as an investor, we must help enterprises to clarify and firmly believe in their own positioning.
For small and medium-sized enterprises, it is necessary to take the road of "specialization and innovation". Focus on doing a fine thing, while having its own characteristics and innovation. In this way, in a market segment, there is long-term competitiveness and can become a hidden champion.
For large enterprises, it is necessary to take the road of "real expertise and high level". First of all, adhere to the industry, large enterprises because of the advantages of talent, information, etc., business layout, to maintain caution about financialization, real estate, etc.; secondly, large enterprises also need "specialization", compared with small and medium-sized enterprises, large enterprises often have a lot more choices, but sometimes this "much more", may be benefits, may also be trouble. It is the mission of large enterprises to focus on the main business, temper the spirit of craftsmen, and persistently invest in promoting the improvement of national economic factors; while focusing, it is also necessary to be "high", have high-tech content, and rely on the progress of science and technology to support long-term development. In this regard, investment institutions should also change accordingly, and the personnel structure of the people's welfare requires more science and engineering backgrounds, and even some scientists to join; and finally, "platformization", large enterprises should learn to live in harmony with small and medium-sized enterprises. In the future market economy, enterprises are a kind of synergistic cooperative relationship, not to fight alone, but to coexist and prosper, forming a benign ecosystem.
It is worth noting that in recent years, many enterprises are facing the problem of alternating between the old and the new, and handing over to fund management is a good choice, because its interests are relatively detached, and it will definitely maintain the brand created by the entrepreneur, but the fund without industrial background and practical experience in M&A investment may be more difficult to do. At this time, the "specialty" of Welfare is an advantage, we must be the first in the field of food consumption in China, and I believe we can play some unique role in the inheritance of private enterprises in this field.
Southern Finance: The field of food consumption, which is deeply cultivated by Welfare and Welfare Investment, is closely related to the lives of the people. People's livelihood is the essence of the government's work, in the process of investment, how do you think it should be integrated with the development of local industries?
Wang Hang: Since 2012, with the help of the World Bank's International Finance Corporation, the ESG system (environmental empowerment, social socialization, and governance beyondance) has been established, which means that the responsibility of others is your responsibility, and you must think and solve problems from the perspective of the other party.
From the perspective of the enterprise, we must first solve the basic survival problems, and then handle the relationship with the stakeholders in a friendly and appropriate manner. The government hopes that the enterprise where it is located is standardized, and now many enterprises have the goal of listing, and the listing process is a standardized process, and in this regard, investment institutions can play a good role.
China has gone through the stage of capital shortage, and at this time, more attention is paid to the construction and improvement of regional economic ecology. Now many local governments have guidance funds or fund of funds, which is remarkable. Some local governments work hand in hand with market-oriented investment institutions, which is a good phenomenon.
The food consumption industry may not be so sexy, but it is closely related to people's livelihood, and what we do with the invested enterprises is closely consistent with the needs of local governments in many ways.
Southern Finance: At present, local governments attach great importance to the business environment and vigorously promote investment promotion, how do you think about the change of the role of the government?
Wang Hang: Attracting investment is of great significance to China's economic development. From the past "boundless", the evolution to today's theme of investment promotion, which helps to promote local industrial chains and form industrial supporting capabilities.
It can be found that many of the objects of investment promotion in the early days were foreign investment. In addition to capital, these multinational enterprises can also introduce some overseas advanced management experience and technology, which reflects the openness of our country. In my opinion, China's economy should continue to develop and maintain this openness.
Today, we may need a warmer, richer, and more diversified economic ecology. A city cannot be full of tight industries, but also needs to have a humanistic and warm service industry. Now that some foreign investors are gradually losing competitiveness in China and even withdrawing from China, it is time for funds like ours to play a role.
I've seen mayors of some cities invite entrepreneurs to talk, but they can actually invite some investment institutions. Because investment institutions are unique market players, many enterprises are linked through investment, and these enterprises are often excellent enterprises that have been tested by the market and are reliable. If the strength of investment institutions is also condensed, a better situation of more mutual integration and interoperability will be formed.
Editorial Board: Yu Xiaona
Reporter: Wei Wenjing
Editor: Cao Jinliang
Producer: Xiang Xiufang Fang Xiaorong
Producer: Li Qun
Subtitle: Li Qun
Voiced by: Dong Jialong (intern)
New media coordinator: Ding Qingyun, Zeng Tingfang, Lai Xi, Huang Daxun
Producer: Southern Finance All Media Group
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