FOF spurring growth in Weifang Hi-Tech Industrial Development Zone

time: 2019-08-30
source: Chinadaily·High-tech report


A government fund of funds, or FOF, established by an invest- ment company in the Weifang Hi-Tech Industrial Development Zone, is set to support industrial upgrading.

Meanwhile, the zone has coop- erated with fund management companies such as China Crea- tion Ventures and Tsinghua Hold- ings to launch structural funds.

“We will benefit from the gov-ernment fund because it can pro- vide continuous financial support to us,” said Yu Hairui, founder of Weifang Conqueren Bioscience & Technology based in the high- tech zone, during a meeting with government staff members from Weifang Hi-Tech Industrial Development Zone in June.

Conqueren is a bioscience com- pany that combines research and development, production, sales and consulting services under one roof. Its development was constrained because of a lack of capital, though it has professional R&D and operation teams.

“The agricultural industry is changing and it requires leading companies to maintain a competi- tive edge in product quality, mar- keting, sales channels and services. All those need capital,” Yu said.

Apart from setting up the FOF, the zone’s investment and financ- ing management service center also strives to establish closer ties with financial institutions.

This year, the center has con- tacted many fund management institutions to learn how to bet- ter manage funds and better serve companies. As of the end of July, 177 financial institutions had outlets in the zone, including 16 banks, 18 insurance compa- nies, 11 securities companies and 39 fund management companies.

Huang Yu, deputy general manager of a fund management company from Tianjin, said the zone’s financial support mecha- nism will benefit high-tech industries and establish a foun- dation for introducing new funds.

The financial companies are providing plenty of capital to the zone. In the first quarter of 2019, total deposits by companies in the zone were 75.7 billion yuan ($10.5 billion) and total loans were 58.7 billion yuan.

According to the zone’s govern- ment, the establishment of the FOF must be based on the real needs of enterprises. As a result, the zone’s officials arranged many visits to listen to companies’ opin- ions and provide solutions to their problems. Calls and online discussions are also ways for the zone to collect opinions.

On May 24, the zone unveiled a guiding policy to support compa- nies seeking to list in the capital market.

“The zone’s authorities will strive to identify companies with strong potential to be listed and provide all types of services to support companies’ endeavors,” said Cao Guoliang, deputy gener- al manager of the investment department of Weifang Hi-Tech Zone Guochuang Investment Co.

As of the end of July, 117 compa- nies had listed on stock exchange markets and China’s National Equities Exchange and Quota- tions, and had raised 188 million yuan in capital.

Some companies are preparing to launch initial public offerings, including Power HF and Sheng- yuan Group.

Shengrui Transmission Corpo- ration, which developed the world’s first front-engine, front- wheel-drive hybrid eight-gear auto transmission, is working toward listing on China’s science and technology innovation board.