Casai biology's withdrawal of IPO in the United States

China's enterprises going public in the United States are entering a cold winter Another Chinese company withdrew its listing application on June 13, Beijing time, after Shenzhou car rental withdrew its listing application in the United States on May 24 The company is Kasai Biological Industry Co., Ltd (hereinafter referred to as Kasai biological), located in Shanghai, is a biotechnology company On July 20, 2011, Kasai biology filed an application for listing with the securities and Exchange Commission of the United States However, nearly a year later, it had to be withdrawn "Overseas investors gave us too low a valuation and killed us badly We planned to spend more than $15 per share, but they killed less than $5." Zhang Qixian, vice president of Kasai biology, revealed that they intend to postpone listing This is the same reason as the withdrawal of car rental in Shenzhou The reporter learned that the withdrawal of the IPO of Kasai biology will have an impact on the venture capital involved According to the data of the investment group, Kasai biology has carried out four rounds of financing, including the participation of venture capitalists - Goldman Sachs, new Tianyu capital, Morgan Stanley, etc are all shareholders of Kasai biology "The obstruction of overseas listing puts great pressure on foreign venture capital." Zhang Qi, an analyst at Qingke Research Center, said IPO is still the main exit channel for foreign venture capital, and from the current situation, overseas listing will continue to be sluggish The plight of foreign venture capital has entered the harvest period, but it can not harvest the fruits In 2006, Kasai bio, which has been operating independently for 9 years, ushered in the first round of financing of US $26 million for four venture capital companies, namely, Baiao Vinda China, Hongmai China, new Tianyu capital and Pudong ketou Then, the company carried out three rounds of financing successively in November 2006, October 2007 and October 2008 Due to the unique concept of biotechnology, Goldman Sachs, Chongde capital, GM investmen, new Hongyuan venture capital, northern lights venture capital, Morgan Stanley, NEA investment, capital international and cgpe V have successively become the shareholders of Kasai biology In the last three rounds of financing, a total of US $17788 million was provided to casai bio In 2011, when Kasai biology reached the scheduled time to go public, it finally found that the overseas market had changed dramatically "We initially planned to raise $200 million, but after the inquiry in July last year, we made a concession and instead issued 6.9 million ADSS, each representing three ordinary shares of $12-14 each, which means only $70-80 million can be raised." Zhang Qixian said However, the price of 12-14 dollars is not acceptable "In order to avoid bloodshed, shareholders also suggested a slow re listing, so we canceled the IPO application." Zhang Qixian said The postponement of listing makes venture capital's day hard to bear The reporter learned that Foreign-funded Venture Capital generally adopts a 3 + 7 exit schedule, that is, the first three years are the investment period, and the last seven years are the return period; but for China capital stocks, generally, the fifth year will start to exit Therefore, the 2006 and 2007 investment in the project is just the time to exit However, in April and may 2011, the trust crisis broke out in China capital stock market, which was caused by the defective accounting of more than 24 Chinese companies In June, muddy water issued a short report for Sino forest, which caused waves of short selling in China capital stocks In September of that year, the U.S Department of justice began to investigate the accounting fraud and accounting irregularities of Chinese Listed Companies in the United States, and the trust crisis of China Equity reached a climax After September 2011, only vipshop went to the U.S for listing at a high price On March 24, 2012, vipshop determined the offering price of $6.50, which was 23.5% lower than the lower limit of the previously announced price range of $8.5-10.5 In addition, according to the requirements of underwriters, Sequoia Capital and DCM, the two major venture capital shareholders of vipshop, committed to purchase ads with a price of about $10 million on the date of their IPO (one ads represents two common shares) After listing, vipshop's share price still suffered a sharp dive, with the lowest price falling to around $4.30 Vipshop rose to $5.74 on June 13, but Sequoia Capital and DCM's ADSS still had Book losses "Some large and background foreign venture capital funds can survive, but some small ones are under great pressure." According to a foreign venture project manager in Beijing, the case of vipshop shows that some foreign funds cannot afford to wait and have strong desire to withdraw In fact, the transformation has already reported materials There are still many Chinese companies wandering in front of the US capital market, such as sunshine Trina, Xunlei, xinshengyuan, e-media, etc., many of which involve foreign venture capital funds "We have to wait for foreign funds to participate." Zhang Qi, an analyst at Qingke group, believes it will take time for overseas confidence in CIC to recover due to the financial scandals that broke out again this year For foreign venture capital, it is difficult to achieve the goal of "not bright in the West but bright in the East" - to return to China for listing Among them, the biggest problem is that foreign funds generally guide the invested enterprises to adopt vie mode, and domestic companies generally have little or no profit, which makes the profit situation of the original domestic companies difficult to meet the listing conditions "What I know is that the investment projects adopting vie mode have not yet planned to return to China These projects would rather wait, I believe that the spring of China capital stock will come." The project manager of a foreign venture capital in Beijing said Zhang Qi, an analyst at Qingke group, believes that M & A can be another exit way for foreign venture capital, but it is difficult to become the mainstream in the short term And foreign venture capital can only do articles on the new fund Feng Po, an analyst with China investment group, said foreign venture capital started to set up RMB funds in recent years "At present, the mainstream US dollar fund management institutions, such as Sequoia, IDG, Qiming, Saifu, etc., have established RMB funds." Feng Po also said that it is expected that in the next 1-2 years, the investment scale of RMB fund will exceed that of US dollar fund and become the absolute mainstream of the investment market.