Pan Teng, Partner Of Fengnian Capital: A High-End Manufacturing Enterprise With Real Import Substitution Capability

"We need to invest in high-end manufacturing enterprises with real import substitution capability. These enterprises have stronger pressure resistance and cash flow strength in the face of changes in the international situation or in the face of epidemic situation." Recently, pan Teng, partner of Fengnian capital, said in an exclusive interview with the 21st century economic report.

Fengnian capital was established in 2014, and its founding team is composed of senior executives from domestic PE companies such as Jiuding and Dachen. Since its establishment six years ago, Fengnian capital has been deeply engaged in high-end manufacturing industry, and has made layout in precision processing of special devices, electronic components, semiconductors, new materials and information technology.

It is understood that Fengnian capital has invested in nearly 40 projects, including core vision, Shenzhen silicon power and Dali Kaipu. In the past two years, with the investment logic of Fengnian capital confirmed by time, based on the deep cultivation of the industry in the past and the policy dividend of the capital market and other factors, Fengnian capital also ushered in the investment harvest period.

Pan Teng, partner of Fengnian capital. Data map

Cash flow and user recognition are critical

"Import substitution and independent innovation are the two main directions for us to invest in high-end manufacturing industry." Panton said. In the past few domestic enterprises have been engaged in import substitution and have been recognized by customers. In recent two years, due to the change of international situation, the demand for import substitution has increased, which has forced domestic enterprises to move forward and constantly improve product quality.

Similarly, due to the surge in import substitution demand, the investment in chip semiconductors has been very hot in recent two years, but most institutions have followed suit to invest in integrated circuit design, resulting in the rising valuation of related projects. Fengnian capital will not blindly chase after the wind, but will prefer to invest in semiconductor equipment, semiconductor testing services, semiconductor intellectual property certification and other supporting services.

"When everyone goes to dig gold mines, we are willing to be hoe sellers, provide supporting services behind the scenes, and seek to obtain a more stable return on investment." Panton said.

When selecting and judging specific projects, Fengnian capital also has its own judgment criteria. First of all, the market space of enterprise products in China is broad. Second, the market where the products are located is mainly occupied by foreign enterprises, and there is a demand for import substitution. Third, enterprises have achieved technological breakthroughs, products close to the level of foreign enterprises, and have continued to order delivery.

"Cash flow is an important criterion to judge whether a manufacturing enterprise is good or bad. If an enterprise says that its technology and products are very advanced, but it does not have real outstanding order performance and cannot be recognized by users, we think this is abnormal." Panton said.

Deep ploughing industry for post investment management empowerment

Since 2016, Fengnian capital has invested in many projects, and has successively controlled three or four enterprises, including Dali Kaipu and Changli technology. Through the mode of holding investment, Fengnian constantly improves the level of R & D, production, management and service, and gradually transforms into an efficient and intelligent enterprise form. Today, China's high-end manufacturing industry is in urgent need of transformation and progress, so as to help enterprises create value.

For example, in 2017, Fengnian capital invested in Dali Kaipu, a local enterprise located in Northeast Dalian. It is understood that Dali Kemp is the only enterprise in China that can stably produce high-Q ceramic capacitors. Its products can fill the gap in domestic high-end capacitor production, and have broad development space. However, in the past, due to the limitations of history, system and talents, Dali Kaipu was limited to single product and small batch output.

After Fengnian capital holding, it helps enterprises to open up their development vision. Dali Kaipu has determined the development strategy of multi category platform and globalization, and has updated and upgraded the product concept, production concept, technical management, sales concept, talent concept, etc. Today, Dali Kemp's products are in a leading position in the market share of MRI, nuclear magnetic resonance imaging system, semiconductor equipment, industrial laser equipment, measurement and analysis equipment, high-speed railway and other fields.

"There are barriers to holding investment. As an investment institution with enterprise thinking, Fengnian capital will continue to provide professional and systematic post investment services for more invested enterprises." Panton said.

What Fengnian capital does is not only to excavate good technology and products, but also to carry out "management empowerment" to cultivate enterprises to form a more systematic core competitiveness, and fully distribute its huge potential.