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News release

Chinese Enterprises IPOs Surge in Q3; 46 Enterprises Listed

Overseas; VC/PE Exits Increasingly Active

Zero2IPO Research Center Oct. 27, 2009 Beijing

According to the China Enterprises IPO Report Q3 2009 recently released by Zero2IPO

Group, a famous research, advisory and investment institution focusing on VC and PE

industries in Greater China Region, 46 Chinese enterprises went public on 13 overseas

markets and two domestic markets which Zero2IPO Research Center focuses on in

Q309, raising a combined US$20.71B, or US$450.25M on average. With the recovery of

the overseas market and the resumption of domestic IPOs, Q3 witnessed a surge in the

number of Chinese enterprises listed at home and abroad, with both the number of

listings and the amount raised therein reaching a relatively high level since 2008. To be

specific, the number of IPOs was only smaller than that of Q108, but was up by 18 year-

on-year and 35 quarter-on-quarter. The amount raised hit a new high since 2008,

increasing by 5.78 times from a year earlier and 7.82 times from a quarter ago. (See

Chart 1)

By market, 18 of the 46 listed enterprises went public on foreign markets1, raising a

collective RMB6.60B, an increase of eight in terms of IPO number and 5.22 times in the

amount raised. The domestic market also saw 28 listings, ten more from a year earlier,

raising a total of US$14.11B, an increase of 6.08 times year-on-year. (See Table 1)

In Q309, 14 of the 46 listed Chinese companies were backed by VC/PE investment,

garnering a total of US$1.85B. Compared from the same period last year, the number of

listed VC/PE-backed enterprises was up by four and the amount raised rose 158.9%.

Table 1 Chinese Enterprises Domestic and Overseas IPOs in Q30 9

ListingMarket

Financing Amt.(US$M)

% ofTotal

No. ofIPOs

% ofTotal

Average

Financing Amt.

(US$M)

DomesticMarket

14,111.33 68.1% 28 60.9% 503.98

OverseasMarket

6,600.28 31.9% 18 39.1% 366.68

Total 20,711.61 100.0% 46 100.0% 450.25

Source: Zero2IPO Research Center 2009.10 www.zero2ipo.com.cn

Chart 1 Quarter-on-quarter Comparison of Chinese Enterprises Domestic and

Overseas IPOs (Q108-Q309)

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News release

Overseas IPOs and Amount Raised on Continuous Rise, with High

Concentration in Market and Industry

In Q309, overseas markets kept warming up and IPOs moved on steadily in countries

around the world. Under this context, Chinese enterprises grow increasingly active ingetting listed overseas. Altogether 18 Chinese enterprises went public on three overseas

markets, collecting a total of US$6.60B. Year-on-year, the number of listings was up by

eight and the amount raised jumped 5.22 times; quarter-on-quarter, the number of IPOs

rose by seven and the amount raised surged 181.1%. (See Chart 2)

Chart 2 Quarter-on-quarter Comparison of Chinese Enterprises Overseas IPOs

(Q108-Q309)

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News release

In terms of market breakdown, Chinese enterprises became more concentrated in terms

of listing markets, and the 18 enterprises were mainly listed on three markets: HKMB,

NASDAQ, and SGX. HKMB attracted a majority of these enterprises, with 11 IPOs

collecting US$5.42B, which accounted 61.1% of the total number of Chinese enterprises

overseas IPOs and 82.1% of the amount raised thereby. Four Chinese enterprisesdebuted on NASDAQ, collecting US$1.07B, representing 22.2% and 16.3% of the total

respectively. SGX also saw the listing of three Chinese enterprises which collected a

humble US$108.47M, accounting for 16.7% and 1.6% of the total respectively. (See

Table 2)

Table 2 Chinese Enterprises Overseas IPOs in Q309 by Market

ListingMarket

FinancingAmt.

(US$M)

% ofTotal

No. ofIPOs

% ofTotal

Average

Financing Amt.

(US$M)

HKMB 5,417.19 82.1% 11 61.1% 492.47NASDAQ 1,074.63 16.3% 4 22.2% 268.66SGX 108.47 1.6% 3 16.7% 36.16Total 6,600.28 100.0% 18 100.0% 366.68


By industry, Traditional sector continue to lead in both number of IPOs and amount

raised. A total of 13 Traditional enterprises went public in this quarter, raising a combined

US$4.36B, taking up 72.2% of the total number of IPOs and 66.0% of the total amount

raised. Quarter-on-quarter, the number of Traditional listings was up by six, and the

financing amount jumped 141.2%. The number of Broad IT debuts also registered aconspicuous rise from Q2, with three IPOs collecting a total of US$1.11B up by two and

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News release

8.21 times respectively. Both Clean-tech and Services witnessed a decline in the number

of IPOs and financing amount. The number of Clean-tech debuts was down by one and

the financing amount decreased by 96.0%. Services had no Chinese debut in this

quarter. (See Chart 3)

Table 3 Industry Breakdown of Chinese Enterprises Overseas IPOs in Q309

Industry(Grade 1)

FinancingAmt. (US$M)

% ofTotal

No. ofIPOs

% ofTotal

AverageFinancing Amt.

(US$M)

Traditional 4,356.68 66.0% 13 72.2% 335.13

Bio/Healthcare 1,126.56 17.1% 1 5.6% 1126.56

Broad IT 1,105.56 16.8% 3 16.7% 368.52

Clean-tech 11.48 0.2% 1 5.6% 11.48

Total 6,600.28 100.0% 18 100.0% 366.68


Domestic IPO Market Restarted; Financing Amount Hits News on Both

Shanghai and Shenzhen Bourses

In Q309, Along with a steady recovery in domestic economy and the launch of the

Growth Enterprise Market (GEM), great progress wad made in the IPO system reform,

domestic IPO market was restarted, and Chinese enterprises domestic IPOs moved on

in a orderly way. In this quarter, 28 enterprises got listed on two domestic capital markets,

garnering a US$14.11B in total, or US$503.98M on average. Thanks to issue of large-

cap stocks by China State Construction Engineering Corporation (CSCEC) and

Metallurgical Corp. of China Ltd. (MCC), the financing amount reached a quarterly record

in Q309 since 2008. Also in this quarter, ten more Chinese enterprises went public on

domestic markets than on overseas markets, and the financing amount on domestic

market was 2.14 times that on overseas market. (See Chart 3)

Chart 3 Quarter-on-quarter Comparison of Chinese Enterprises Domestic and

Overseas IPOs (Q108-Q309)

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News release

In Q3, most of the domestically listed enterprises were small- and medium-sized. Except

for the four debuts on the Shanghai Stock Exchange, 24 of the 28 enterprises listed at

home went public on the Small and Medium Enterprise Board (SMEB) on the Shenzhen

Stock Exchange, raising US$2.12B in total, or US$88.39M on average. (See Table 4)

Table 4 Chinese Enterprises Domestic IPOs in Q309

Listing Market FinancingAmt. (US$M)

% ofTotal

No. of IPOs % ofTotal

Average

Financing Amt.

(US$M)

Shanghai StockExchange

11,989.99 85.0% 4 14.3% 2,997.50

Shenzhen SMEB 2,121.34 15.0% 24 85.7% 88.39

Total 14,111.33 100.0%

28 100.0%

503.98


By industry, Traditional sector remained on the top in both the number of IPOs and

amount raised, with 13 Traditional debuts collecting US$11.32B, which accounted for

46.4% of the total IPOs and 80.2% of the total amount raised. Broad IT followed with six

listings. Bio/Healthcare, Services and Clean-tech respectively reported four, three and

two debuts. (See Table 5)

Table 5 Industry Breakdown of Chinese Enterprises Domestic IPOs in Q309

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News release

Industry(Grade 1)

FinancingAmt.

(US$M)

% ofTotal

No. of IPOs % ofTotal

Average FinancingAmt. (US$M)

Traditional 11,323.07 80.2% 13 46.4% 871.01

Services1,882.49 13.3% 3 10.7% 627.50

Bio/Healthcare 439.63 3.1% 4 14.3% 109.91

Broad IT 337.98 2.4% 6 21.4% 56.33

Clean-tech 128.17 0.9% 2 7.1% 64.08

Total 14,111.33 100.0%

28 100.0%

503.98


VC/PE-backed IPOs up Steadily; Domestic and Overseas Exits by Investment

Institutions Increasingly Active

With the steady recovery of overseas IPO market and the resumption of domestic IPOs,

there has been an apparent rise in the number of IPOs by VC/PE-backed Chinese

enterprises and the amount raised thereby. In Q3, altogether 14 VC/PE-backed Chinese

enterprises got listed overseas, collecting a total of US$1.85B. Both the number of IPOs

and financing amount reached record highs since 2008. On a year-on-year basis, the

number of VC/PE-backed enterprises was up by four and the financing amount rose

158.9%. On a quarter-on-quarter basis, the number of IPOs was up by nine and the

financing amount by 4.5%.

Among14 VC/PE-backed Chinese enterprises; four were listed on HKMB, and ten on

Shenzhen SMEB. The listings of these enterprises will allow 31 VC/PE investment funds

to exit their investment on the secondary market, providing an average rate of return on

investment of 4.06 times. To be specific, overseas listed enterprises provided investors

an average rate of return on investment of 3.97 times, and the figure for the domestically

listed ones stood at 4.13 times. (See Table 4 and Table 6)

Chart 4 Quarter-on-quarter Comparison of VC/PE-backed Chinese Enterprises

Domestic and Overseas IPOs (Q108-Q309)

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News release

Quarter-on-quarter Comparison of VC/PE-backed Chinese Enterpri

Domestic and Overseas IPOs (Q108-Q309)

1,055.98

1,209.90

716.44

437.42

1,774.771,854.98

141.19

14

10

1

5

14

10

2

0.00

400.00

800.00

1,200.00

1,600.00

2,000.00

Q1'08 Q2'08 Q3'08 Q408 Q109 Q209 Q3'09

Source: Zero2IPO Res earch Center 2009.10 www.zero2ipo.com.cnTable 6 VC/PE-backed Chinese Enterprises Domestic and Overseas IPOs in Q309

CompanyName

ListingDate

Listing Market Industry Financing Amt.(US$M)

VC/PE Fund

Chigo 2009-7-13 HKMB TraditionalHome Applicance

21.24 High Surplus (VC)

Your-Mart 2009-7-17 ShenzhenSMEB

Services

(Retail)

143.34 Sunbridge (PE),Shanghai Xinmeng(PE)

BBMG 2009-7-29 HKMB Traditional(Materials)

768.34 New Horizon (PE)

AccelinkTechnologie

s

2009-8-21 ShenzhenSMEB

Broad IT

(Opto-electronics)

93.70 Changyuan Yingjia(VC)

WorldUnionProperties


Traditional

(Real Estate)

92.20 SCGC (VC), CowinCapital (VC),

Greenwoods AssetManagement (PE)

ChaohuaTech


Broad IT

(Other Electronic

Products)

38.98 SRSI (VC), OFC (VC),

Seasonal Capital (VC)

SuccessElectronics


Broad IT

(Opto-electronics)

43.01 CMTECH (VC), ZichenInvestment (VC)

HSSM 2009-9-3 ShenzhenSMEB

Clean-tech

(New Materials)

85.48 Yuan Feng VentureCapital (VC)

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News release

SaturdayShoes


Traditional

(Clothing)

144.95 Sure JoyceLimitedVC1

China AllAccess

2009-9-16 HKMB Broad IT(Retial)

51.61

ChengweiVC

Jingyi Metal 2009-9-29 ShenzhenSMEB

Traditional

(Smelting/Processing)

68.52 Guangdong TechnologyVC (VC)

Boyun NewMaterial


Clean-tech

(New Materials)

42.69 Hunan Xiangtou High-tech VC (VC), GZVC

(VC), Cowincapital(VC)

XinlongElectrical


Traditional

(Electronic

Equipment)

38.95 Hefei InnovationInvestment (VC)

Peak Sports 2009-9-29 HKMB Traditional

(Clothing)

221.97 Sequoia Capital (VC)2, ProIPO (PE), CCBI(PE), SCGCVC3,

Legend Capital4


NoteBeginning from Q109, Zero2IPO Research Center has increased the number of

overseas markets it focuses on from 11 to 13, including NASDAQ, NYSE, LSEMB, AIM,

HKMB, HKGEM, SGX, Catalist, TSE, Mothers, KSM, KOSDAQ, FWB. LSEMB and

KSEMB are the newly included.

About Zero2IPO Research Center

Founded in November 2001, Zero2IPO Research Center provides professional research

reports and customized industry reports for VC and PE funds, government organizations,

intermediaries and startup enterprises in Greater China Region. The centers research

scope covers VC, PE, IPO, M&A and high-tech industries. It has grown into the most

professional and authoritative research institution in China.

Statement on Republication:

The article is publicly released to media by Zero2IPO Group. Please identify the source

as "Zero2IPO China Enterprises IPOs Report Q3 2009". Any questions and suggestions

on data and research, please contact Ms. Leaf Zhang by phone or email:

Tel: +86 10 84580476

Email: [email protected]

1Note: Sure Joyce Limited is a wholly-owned subsidiary of LC Fund III,L.P.2 Sequoia Capital invested in Peak Sports via six funds: Sequoia Capital China I, L.PSequoia Capital ChinaPrincipals Fund I, L.P.Sequoia Capital China Partners Fund I, L.PSequoia Capital China Growth FundI, L.PSequoia Capital China GF Principals Fund I, L.PSequoia Capital China Growth Partners Fund I,

L.P.3SCGC is a wholly-owned subsidiary of the Shenzhen Capital (Hong Kong) Company Limited, which iscontrolled by Shenzhen Capital Group Co., Ltd.4 Legend Capital invested in Peak Sports via LC Fund IV, L.P under its flag.

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News release

If in republication please mail two sample copies to:

Nicole Meng

Rm.1202/03, Tower A, Eagle Run Plaza, No.26, Xiaoyun Road, Chaoyang District,

Beijing 100125Or email the website link of your article to [email protected]. Thank you.

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