A Touch of Warm Sunshine After the Cold Winter

【Zero2IPO Insight】

ChiNext: A Touch of Warm Sunshine after the Cold Winter

On Oct. 30th, 2009, with the long-waiting ChiNext finally setting sail, the first batch of 28 ChiNext-listed companies will go public together on the Shenzhen Stock Exchange. After the cold winter of financial crisis, the launch of ChiNext brings a touch of warm sunshine to Chinese VC/PE industry.

All of the Stock Prices of ChiNext-listed Enterprises in First Batch Soared at the Opening with Their Average Opening Price Rising 76.5% from Issue Price.

From Oct. 30th, 28 stocks have been officially listed on ChiNext. In the first trading day, all of stock prices surged. There was an average increase of 76.5% in opening prices compared with issue prices, among which Huayi Brothers topped the competition with an opening price of RMB63.66, 122.7% higher than its issue price. In addition, five stocks enjoyed an increase of more than 100.0% in opening price, including Anke Biotechnology, Toread, EVE Battery, Lepu Medical and Huaxing Chuangye; five stocks saw opening price rising by 80.0%-100.0%, accounting for 17.9% of all, which were respectively Shenyang Siaxun, Dayu Water-saving, Gifore, Geeya Technology and Beijing Dinghan Technology; 15 stocks enjoyed an increase of 50.0%-80.0% in opening prices, accounting for 53.6%; and only two stocks were up below 50.0%.

Table 1 First Batch of 28 ChiNext-listed Enterprises

Stock Company Name Headquarters Grade-1 Issue P/E Shares Openin Growth VC/PE Institution Code Industry Price Ratio Issued g Price Rate (10,000 shares)

300027 Huayi Brothers Beijing Services 28.58 69.71 4,200 63.66 122.74% China Equity

300009 Anke Anhui Bio/Health 17.00 46.83 2,100 37.00 117.65% Good VC Biotechnolgoy care 300005 Beijing Toread Beijing Traditional 19.80 53.10 1,700 42.00 112.12% Leading Investment 300014 Eve Battery Guangdong Clean- 18.00 54.56 2,200 38.00 111.11% CMTECH, (Excluding tech Fortune VC Shenzhen) 300003 Lepu Medical Beijing Bio/Health 29.00 59.56 4,100 61.00 110.34% Warburg Pincus care

300025 Huaxing Chuangye Zhejiang Broad IT 19.66 45.18 1,000 40.00 103.46%

300024 Shenyang Siaxun Liaoning Broad IT 39.80 62.90 1,550 74.00 85.93% Gold Stone Investment 300021 Dayu Water-saving Gansu Traditional 14.00 53.85 1,800 25.60 82.86%

300022 Gifore Sichuan Services 17.75 57.26 2,240 32.25 81.69% Jiuding Capital

300028 Geeya Technology Sichuan Broad IT 11.30 45.20 3,700 20.50 81.42% Xinao VC, Hangyuanfu VC, Dehui Investment, Jiaze Investment, Florin Investmen, Fengze Investment, Jiuding Capital 300011 Beijing Dinghan Beijing Broad IT 37.00 82.22 1,362 66.70 80.27% China Venture Technology Capital Xingye VC

300001 TGOOD Electric Shandong Traditional 23.80 52.76 3,500 42.00 76.47% Qingdao Laoshan Technology Investment 300015 Aier Hunan Bio/Health 28.00 60.87 3,350 48.86 74.50% IFC

Ophthalmology care Fortune VC

300017 ChinaNetCenter Shanghai Broad IT 24.00 63.16 2,300 41.50 72.92% CDF-Capital, Fortune VC, VIC, Fuwei VC

SZVC, Fortune VC 300002 Ultrapower Beijing Broad IT 58.00 68.80 3,160 100.10 72.59% Huijinlifang and Gold Stone 300006 Lummy Chongqing Bio/Health 16.50 47.83 2,300 27.45 66.36% Chongqing Pharmaceuticals care Technology VC 300023 Bode Energy Shaanxi Traditional 19.60 81.67 1,500 32.56 66.12% Equipment 300019 Chengdu Guibao Sichuan Traditional 23.00 47.96 1,300 38.01 65.26%

300007 Henan Hanwei Henan Traditional 27.00 60.54 1,500 44.00 62.96% Ningbo Junrun Electronics Investment 300016 Beilu Beijing Bio/Health 17.86 47.89 1,700 29.00 62.37% Beijing Venture care Capital Infotech

300026 Chase Sun Tianjin Bio/Health 60.00 49.18 1,259 97.15 61.92% TJVC care 300013 Xinning Logistics Jiangsu Traditional 15.60 45.48 1,500 24.50 57.05% Jinrong Investment Taihe Investment, Yiwen Venture Capital, Ninghe Investment 300010 Lanxum Beijing Broad IT 18.00 51.49 2,650 28.10 56.11% China-Belgium Fund

300008 Bestway Marine Shanghai Services 27.80 40.12 1,260 43.15 55.22% Shanghai Zichen Investment 300020 Silver River Zhejiang Broad IT 20.00 52.63 2,000 31.00 55.00% ZVC, Haitong Kaiyuan, Zhejiang Lanshan Intel Capital

300004 Nanfang Venilator Guangdong Traditional 22.89 46.24 2,400 35.00 52.91% Tongying VC (Excluding Shenzhen) 300012 Center Testing Shenzhen Traditional 25.78 59.95 2,100 38.00 47.40% International 300018 Zhongyuan Hubei Traditional 32.18 52.62 1,635 47.00 46.05% China-Belgium Huadian Fund Source: Zero2IPO Research Center 2009.10 www.zero2ipo.com.cn

A Total of 46 VC/PE Institutions Once Invested in the 23 of the First-batch ChiNext-listed Enterprises.

The statistics of Zero2IPO Research Center show that in the 28 first-batch ChiNext-listed companies, 23 were supported by a total of 46 VC/PE institutions. Among them, four foreign VC/PE institutions accounted for 8.7%. They are Intel Products which had invested in Silver River, Warburg Pincus’s subsidiary Brook which had invested in Lepu Medical, IFC which had invested in Aier Ophthalmology; two joint venture VC/PE institutions taking up 4.3% of the total are respectively China Equity which had invested in Huayi Brothers, and China-Belgium Fund which had invested in Zhongyuan Huadian; A total of 40 local VC/PE institutions accounted for as high as 87.0%. Among them, Jiuding Capital and Gold Stone performed more prominently each with two investees landing on ChiNext in the first batch, while Fortune VC’s performance was undoubtedly the most eye- catching one with 3 investees initially listed on ChiNext.

Table 2 46 VC/PE Institutions with Investment in First Batch of ChiNext-listed Enterprises VC/PE Type No.of Company Name Stock Code Headquarte Industry Industry Shares Am. Financed Issue P/E Enterprises rs (Grade 1) (Grade 2) Issued in Price Ratio Backed (10,000 Plan（RMB10 shares) 0M） Fortune VC Domestic 3 Eve Battery 300014 Guangdong Clean-tech Clean 2,200 2.06 18.00 54.56 (Excluding Energy Shenzhen) Aier Ophthalmology 300015 Hunan Bio/Healthcar Medical 3,350 3.40 28.00 60.87 e Services ChinaNetCenter 300017 Shanghai Broad IT IT Services 2,300 2.42 24.00 63.16

Jiuding Capital Domestic 2 Gifore 300022 Sichuan Services Retail 2,240 1.98 17.75 57.26

Geeya Technology 300028 Sichuan Broad IT Broadcasting 3,700 1.85 11.30 45.20 (DTV) Gold Stone Domestic 2 Ultrapower 300002 Beijing Broad IT IT Services 3,160 5.03 58.00 68.80

Shenyang Siaxun 300024 Liaoning Broad IT Other 1,550 2.79 39.80 62.90 Electronics Products Qingdao Domestic 1 TGOOD Electric 300001 Shandong Traditional Electronic 3,500 4.00 23.80 52.76 Laoshan Equipment Technology Investment Huijinlifang Domestic 1 Ultrapower 300002 Beijing Broad IT IT Services 3,160 5.03 58.00 68.80

Guangdong Domestic 1 Nanfang Venilator 300004 Guangdong Traditional Machinery 2,400 2.88 22.89 46.24

Tongying VC (Excluding Manufacturin Shenzhen) g Shanghai Domestic 1 Beijing Toared 300005 Beijing Traditional Others 1,700 2.20 19.80 53.10 Leading Investment Chongqing Domestic 1 Lummy 300006 Chongqing Bio/Healthcar Pharmaceuti 2,300 1.44 16.50 47.83 Technology Pharmaceuticals e cals/Health VC Products Ningbo Junrun Domestic 1 Hanwei Electronics 300007 Henan Traditional Electronic 1,500 1.80 27.00 60.54 Equipment Jiachuan Domestic 1 Bestway Marine 300008 Shanghai Services Consulting 1,260 1.21 27.80 40.12 Investment Zichen Domestic 1 Bestway Marine 300008 Shanghai Services Consulting 1,260 1.21 27.80 40.12 Investment Good Capital Domestic 1 Anke 300009 Anhui Bio/Healthcar Bio- 2,100 1.66 17.00 46.83 Biotechnology e engineering Gaoxin VC Domestic 1 Lanxum 300010 Beijing Broad IT IT Services 2,650 2.76 18.00 51.49

China Venture Domestic 1 Beijing Dinghan 300011 Beijing Broad IT Other 1,362 2.16 37.00 82.22 Capital Technology Electronics Products Xingye VC Domestic 1 Beijing Dinghan 300011 Beijing Broad IT Other 1,362 2.16 37.00 82.22 Technology Electronics Products Suzhou Domestic 1 Xinning Logistics 300013 Jiangsu Traditional Logistics 1,500 1.40 15.60 45.48 Jinrong

Investment

Yiwen VC Domestic 1 Xinning Logistics 300013 Jiangsu Traditional Logistics 1,500 1.40 15.60 45.48

Ninghe Domestic 1 Xinning Logistics 300013 Jiangsu Traditional Logistics 1,500 1.40 15.60 45.48 Investment Taihe Domestic 1 Xinning Logistics 300013 Jiangsu Traditional Logistics 1,500 1.40 15.60 45.48 Investment CMTECH Domestic 1 Xinning Logistics 300013 Jiangsu Traditional Logistics 1,500 1.40 15.60 45.48

Beijing Domestic 1 Beilu 300016 Beijing Bio/Healthcar Pharmaceuti 1,700 1.83 17.86 47.89 Technology e cals/Health VC Products Infotech Domestic 1 Beilu 300016 Beijing Bio/Healthcar Pharmaceuti 1,700 1.83 17.86 47.89 e cals/Health Products Legend Domestic 1 ChinaNetCenter 300017 Shanghai Broad IT IT Services 2,300 2.42 24.00 63.16 Capital CDF Capital Domestic 1 ChinaNetCenter 300017 Shanghai Broad IT IT Services 2,300 2.42 24.00 63.16

Beijing Vision Domestic 1 ChinaNetCenter 300017 Shanghai Broad IT IT Services 2,300 2.42 24.00 63.16 Investment SZVC Domestic 1 ChinaNetCenter 300017 Shanghai Broad IT IT Services 2,300 2.42 24.00 63.16

Shenzhen Domestic 1 ChinaNetCenter 300017 Shanghai Broad IT IT Services 2,300 2.42 24.00 63.16 Careall VC Zhejiang Domestic 1 Silver River 300020 Zhejiang Broad IT Software 2,000 1.70 20.00 52.63 Technology VC

Haitong Domestic 1 Silver River 300020 Zhejiang Broad IT Software 2,000 1.70 20.00 52.63 Kaiyuan Zhejiang Domestic 1 Silver River 300020 Zhejiang Broad IT Software 2,000 1.70 20.00 52.63 Lanshan CAS Domestic 1 Shenyang Siaxun 300024 Liaoning Broad IT Other 1,550 2.79 39.80 62.90 Investment Electronics Products Shenyang Domestic 1 Shenyang Siaxun 300024 Liaoning Broad IT Other 1,550 2.79 39.80 62.90 Sengmu Electronics Investment Products Tianjin VC Domestic 1 Chase Sun 300026 Tianjin Bio/Healthcar Pharmaceuti 1,259 2.68 60.00 49.18 e cals/Health Products Changsha Domestic 1 Geeya Technology 300028 Sichuan Broad IT Broadcasting 3,700 1.85 11.30 45.20 Xinao (DTV) Hangzhou Domestic 1 Geeya Technology 300028 Sichuan Broad IT Broadcasting 3,700 1.85 11.30 45.20 Jiaze (DTV) Investment Shenzhen Domestic 1 Geeya Technology 300028 Sichuan Broad IT Broadcasting 3,700 1.85 11.30 45.20 Hangyuan (DTV) Fuchuang Hangzhou Domestic 1 Geeya Technology 300028 Sichuan Broad IT Broadcasting 3,700 1.85 11.30 45.20 Dehui (DTV) Investment Shanghai Domestic 1 Geeya Technology 300028 Sichuan Broad IT Broadcasting 3,700 1.85 11.30 45.20

Florin (DTV) Investment Shanghai Domestic 1 Geeya Technology 300028 Sichuan Broad IT Broadcasting 3,700 1.85 11.30 45.20 Fengze (DTV) Investment Intel Capital Foreign 1 Silver River 300020 Zhejiang Broad IT Software 2,000 1.70 20.00 52.63

IFC Foreign 1 Aier Ophthalmology 300015 Hunan Bio/Healthcar Medical 3,350 3.40 28.00 60.87 e Services Brook Foreign 1 Lepu Medical 300003 Beijing Bio/Healthcar Medical 4,100 5.17 29.00 59.56 e Equipment Warburg Foreign 1 Lepu Medical 300003 Beijing Bio/Healthcar Medical 4,100 5.17 29.00 59.56 Pincus e Equipment China Equity JVC 1 Huayi Brothers 300027 Beijing Services Media 4,200 6.20 28.58 69.71

China-Belgium JVC 1 Zhongyuan 300018 Hubei Traditional Electronic 1,635 1.85 32.18 52.62 Fund Huadian Equipment Source: Zero2IPO Research Center 2009.10 www.zero2ipo.com.cn

The First Batch of Listed Companies Is “Best of the Best”, in Which Beijing’s Enterprises Take the Majority.

From the point of view of geographical breakdown, the first batch of 28 ChiNext-listed companies are scattered among 17 provinces and cities including Beijing, Sichuan, Shanghai, Guangdong (Excluding Shenzhen) and Zhejiang, among which Beijing had the most with seven enterprises-- Ultrapower, Lepu Medical, Toread and so on; Sichuan is also at the forefront, contributing three ChiNext-listed companies, namely, Chengdu Guibao, Gifore and Geeya Technology; Shanghai, Guangdong (Excluding Shenzhen) and Zhejiang have respectively two companies listed on ChiNext; in addition, Shenzhen, Tianjin, Chongqing, Henan, Anhui, Hunan, Jiangsu, Hubei, Shandong, Liaoning, Shaanxi and Gansu also each have one enterprise listed.

Table 3 First Batch of 28 ChiNext-listed Enterprises (By Headquarters) Headquarters Stock Company Grade-1 Issue P/E Shares Amt. Gross Net Net VC/PE Year Round Investme Code Name Industry Price Ratio Issued Finance Profit Profit Assets Institution nt Stage (10,000 d in Rate in Rate in Income shares) Plan（R 2008 2008 Ratio in MB100M 2008 ） Beijing 300002 Ultrapower Broad IT 58.00 68.80 3,160 5.03 50.36% 23.21% 51.58% Huijinlifang, 2009 A Expansion Gold Stone stage 300003 Lepu Bio/Health 29.00 59.56 4,100 5.17 78.58% 51.07% 39.35% Warburg 2007 N/A Expansion Medical care Pincus stage 300005 Beijing Traditional 19.80 53.10 1,700 2.20 45.17% 12.03% 27.95% Beijing 2008 A Expansion Toread Leading stage Investmen t 300010 Lanxum Broad IT 18.00 51.49 2,650 2.76 30.09% 13.69% 32.65% Gaoxin 2008 A Expansion Investmen stage t Developme nt 300011 Beijing Broad IT 37.00 82.22 1,362 2.16 52.16% 21.21% 21.14% China 2007 A Expansion Dinghan Venture stage Technology Capital

Xingye VC 2009 B Expansion stage 300016 Beilu Bio/Health 17.86 47.89 1,700 1.83 41.84% 14.71% 19.57% Qingdao 1999 A Early care Laoshan stage Technology Investment Infotech 2008 B Late stage

300027 Huayi Services 28.58 69.71 4,200 6.20 53.74% 16.63% 27.44% China 2004 A Expansion Brothers Equity stage Sichuan 300019 Chengdu Traditional 23.00 47.96 1,300 1.63 40.61% 18.81% 34.07% Guibao 300022 Gifore Services 17.75 57.26 2,240 1.98 13.52% 3.68% 29.57% Jiuding 2009 A Late stage Capital 300028 Geeya Broad IT 11.30 45.20 3,700 1.85 47.13% 25.47% 20.22% Xinao VC, N/A N/A Expansion Technology Hangyuanfu stage VC, Dehui Investment, Jiaze Investment, Florin Investment, Fengze Investment, Jiuding

Capital

Shanghai 300017 ChinaNetCe Broad IT 24.00 63.16 2,300 2.42 35.50% 15.51% 25.98% CDF- 2008 B Late stage nter Capital, Fortune VC, VIC, Fuwei VC SZVC, 2007 A Expansion Fortune VC stage 300008 Bestway Services 27.80 40.12 1,260 1.21 48.30% 32.95% 46.53% Shanghai 2007 A Expansion Marine Zichen stage Investment Guangdong（ 300004 Nanfang Traditional 22.89 46.24 2,400 2.88 30.30% 15.13% 26.43% Tongying 2007 A Late stage Excluding Ventilator VC Shenzhen） 300014 Eve Battery Clean- 18.00 54.56 2,200 2.06 24.78% 15.32% 24.91% CMTECH, N/A N/A Expansion tech Fortune VC stage Zhejiang 300020 Silver River Broad IT 20.00 52.63 2,000 1.70 25.41% 9.02% 19.34% ZVC, N/A A Expansion Haitong stage Kaiyuan, Zhejiang Lanshan Intel Capital 2009 B Expansion stage 300025 Huaxing Broad IT 19.66 45.18 1,000 1.18 45.17% 14.97% 29.60% Chuangye Shenzhen 300012 Center Traditional 25.78 59.95 2,100 2.75 68.10% 21.87% 34.05%

Testing International Tianjin 300026 Chase Sun Bio/Health 60.00 49.18 1,259 2.68 76.38% 34.43% 51.30% TJVC, etc. 2008 A Late stage care Chongqing 300006 Lummy Bio/Health 16.50 47.83 2,300 1.44 36.11% 12.40% 23.87% Chongqing 2007 A Expansion care Technology stage VC Henan 300007 Henan Traditional 27.00 60.54 1,500 1.80 59.03% 30.50% 32.53% Ningbo 2008 A Late stage Hanwei Junrun Electronics Investment Anhui 300009 Anke Bio/Health 17.00 46.83 2,100 1.66 70.91% 23.05% 24.26% Good VC 2005 A Late stage Biotechnolog care y Shandong 300001 TGOOD Traditional 23.80 52.76 3,500 4.00 35.52% 22.58% 58.65% Qingdao 2009 A Expansion Electric Laoshan stage Technology Investment Jiangsu 300013 Xinning Traditional 15.60 45.48 1,500 1.40 50.83% 16.45% 23.71% Jinrong N/A A Expansion Logistics Investment stage Taihe 2007 B Expansion Investment, stage Yiwen Venture Capital, Ninghe

Investment

Hunan 300015 Aier Bio/Health 28.00 60.87 3,350 3.40 55.43% 13.59% 22.78% IFC 2006 A Expansion Ophthalmolo care stage gy Fortune VC 2007 B Expansion stage Hubei 300018 Zhongyua Traditional 32.18 52.62 1,635 1.85 55.77% 39.38% 55.11% China- 2009 A Expansion n Huadian Belgium stage Fund Gansu 300021 Dayu Water- Traditional 14.00 53.85 1,800 1.53 23.14% 9.27% 14.42% saving Shaanxi 300023 Bode Energy Traditional 19.60 81.67 1,500 1.60 21.06% 11.56% 38.72% Equipment Liaoning 300024 STASUN Broad IT 39.80 62.90 1,550 2.79 25.75% 11.93% 15.44% Gold Stone 2008 N/A Expansion Robot & stage Automation Source：Zero2IPO Research Center 2009.10 www.zero2ipo.com.cn

Through the first round of screening and counseling by all those brokerage firms, accountants, law firms before the listing, along with the successive checks made by the Issuance Examination Committee of China Securities Regulatory Commission for ChiNext, the first batch of 28 listed companies are of relatively good qualifications. Viewing from the financial indicators of enterprises landed on ChiNext in the first batch, 28 ChiNext-listed enterprises go even farther than those listed on the Main Board, while they all achieved profits in previous three consecutive years. It fully reflects the principle of “selecting best among the best” and prudent and conservative attitudes of regulatory authorities. On the other hand, viewing from the IPO P/E ratio, the average IPO P/E ratio of ChiNext was 56.6 times, the highest one, Beijing Dinghan Technology, was even 82.22 times. Compared with the average IPO P/E ratio of 25 times in A-share market and that of 40 times in Shenzhen SME Board, its high P/E ratios not only fully reflect investors’ expectation on the high growth of enterprises, but also make people full of worry in excitement.

ChiNext’s Future

In the long run, whether the qualifications of listed companies are excellent and the continued growth, innovation and competitiveness of enterprises can be demonstrated after being listed, as well as what kind of impact will be left on the overall development of ChiNext are affected by the following factors:

(1) China's economic stability would to some extent affect the scale of ChiNext development. At present, our macro-economy has emerged with trends of leading the world’s economic recovery and stabilizing upwards. The pace of ChiNext listing progress will be smoother, and ChiNext’s scope will develop at a faster speed based on the favorable economic situation.

(2) Adequacy of the resources of backup enterprises for listing. As for the successful historical experiences abroad, whether the backup enterprises for listing are adequate determines the success to a certain extent: Taking NASDAQ as an example, the United States has numerous enterprise resources which are in line with the conditions of listing in its innovative economic environment, the abundance of its resources determines the success of NASDAQ; The success factors for KASDAQ of South Korea are similar to those of the United States. After the Asian financial crisis, economic system reforms and establishments were carried out in South Korea to encourage business startups, hence fostering a batch of excellent enterprise resources. However, the GEM of Hong Kong was not successful due to a lack of backup enterprise resources, which led to market liquidity shortage and a weaker confidence of investors.

(3) Risk of excess liquidity. The launch of ChiNext will attract the attention of international speculators, resulting in the improper inflows of foreign "hot money"; moreover, it is unavoidable that a large number of short-term capital for the purpose of profit-chasing will be poured into the market domestically, which causes the stock market to rise suddenly and slump sharply, making the developing situation unstable in the overall market scope.

(4) Rigorous and complete supervisory system is the basis for protecting the market’s normal operations. Only with the supervisory system of ChiNext completed step by step, can the sudden rises and slumps, as well as the malignant speculations of share market be prevented effectively. It will also strictly control the information disclosure of listed companies, preventing false information disclosure and even such problems as major shareholders

occupying the interests of listed companies and so on, to maintain the competition orders of ChiNext.

(5) With the “cascade effect” of the stock market, the ups and downs of A-share market will also affect the ChiNext’s trend more or less. While a bull or slow bull market appears in A-share market, the issuing and listing speed of ChiNext will be faster, but when A-share market is sluggish, ChiNext’s speed will be slowed down therewith.

(6) Enterprises’ operations after the listing. ChiNext mainly consists of small and medium high-tech firms, while the high growth of high-tech enterprises accompanied with high risks at the same time, such as operation risk, faith risk, technology risk, market competition risk, financial risk, etc. They will all be determining factors in the growth of listed companies, thereby influencing the overall development of ChiNext.

In addition, analyzing from the point of view of the stock prices for listed companies, the prices depend primarily on the two aspects , enterprises’ fundamentals and investors’ confidence. In the initial stage of ChiNext, because of the better qualifications of the first listed companies, investors are full of confidence and market values are relatively high, while the stock prices fluctuating up and down with the value changes perform powerfully in this period; Then, as ChiNext gradually steps into maturity and rationality, numerous listed companies will show different growth potentials and competitiveness, there will be several layers appearing in their stock prices: Share prices for part of the companies with high growth, strong competitiveness and favorable fundamentals will gradually move up; other companies which face bottlenecks in development, decreased competitiveness or severe calamity will be sluggish; while individual listed companies will be knocked out from ChiNext if significant financial problems or false information disclosure and other incidents occur.

All in all, the timely launch of ChiNext in China has great significance. From the perspective of the development of domestic small and medium-size enterprises (SMEs), it will shorten the timeframe from startups to listing for many national SMEs, allowing excellent new emerging enterprises which can hardly obtain financing stand out as soon as possible to achieve independent growth and expansion through breaking the monopoly of big enterprises. Secondly, as the barometer of innovations in business models and technologies, ChiNext can encourage more firms or individuals to utilize business opportunities and models similar to those of listed enterprises. From the point of view of domestic and foreign VC/PE institutions, the launch of ChiNext will bring more flexible and convenient exit options for them, thus motivating the investment enthusiasm of VC/PE agencies in China’s market. It will also promote the fund-raising of RMB funds, facilitating the industrial upgrades of VC investment, truly realizing the positive

cycles of internal capital “domestically raised, invested and exited”. Here we would like to wish ChiNext and Chinese VC/PE industry make further progress and achieve more!

――――――― 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 center’s 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.

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