On April 19, the Securities Regulatory Commission formulated the “16 Measures to Serve High-Level Development of Technology Enterprises in the Capital Market”, which proposes comprehensive supporting measures in terms of listing financing, mergers and acquisitions, bond issuance, and private equity investment.

On the policy side, it is necessary to support the listing of high-quality unprofitable technology enterprises with outstanding science and innovation attributes, guide capital investment into related fields in line with the country's economic development strategy and industrial orientation, and provide accurate support for scientific and technological innovation. The development of technology enterprises will be further accelerated with policy support.

In the above context, Lihe Kechuang (002243.SZ), a state-owned listed company providing science and innovation services, also received more attention from the market.

Lihe Kechuang invests in incubating industry unicorns in various hard technology fields, covering robotics, semiconductors, biomedicine, etc. Although performance has been pressured by the environment and transformation in recent years, the company's latest operating results continue to convey confidence to the industry as a window for insight into the development of hard technology in China.

Deepening the dual main business model and laying out the digital economy has achieved remarkable results 

Judging from Lihe Kechuang's latest financial report, 2023 revenue was 2,516 million yuan, net profit to mother was 329 million yuan, and net interest rate to mother was 13.08%. The company continues to deepen the “scientific and technological innovation service+strategic emerging industry” dual business model. The two businesses achieved revenue of 777 million yuan and 1,689 billion yuan respectively.

In terms of science and technology innovation services, innovation base platform services achieved revenue of 676 million yuan, and science and technology innovation operation services achieved revenue of 101 million yuan; in terms of strategic emerging industries, among them, the new materials industry achieved revenue of 1.56 billion yuan and the digital economy industry achieved revenue of 120 million yuan.

In the current external environment, it seems that it is very difficult to achieve steady business operations by Liehe Kechuang.

The economy has gradually broken out of its trough in the past two years, but business operations have yet to fully recover. Naturally, it is difficult to meet expectations for industrial parks closely related to industrial development. It can be said that Lihe Science and Innovation's science and technology innovation services have not achieved significant growth, and have been fully anticipated by the market.

Strategic emerging industries, on the other hand, are science and technology entity businesses that rely on their own scientific and technological innovation resources and deep understanding of the industry to deepen their layout.

Generally speaking, this is a “hard technology venture” involving science and innovation. It corresponds to high investment and profit fluctuations in the short term, and to an imaginative market and solid performance growth in the long term. At present, the company's digital economy industry has begun to have potential, seizing the development opportunities of China's digital economy. Last year's revenue surged 71.4% year on year.

In addition to performance, judging from the deeper meaning of the industry,The “scarcity” of Lihe Science and Innovation as an investment incubation platform is even more prominent in the current environment.Based on a mature hard technology investment incubation system, collaborating with science and innovation can truly help enterprises develop and release commercial value.

According to statistics, Lihe Kechuang has incubated more than 3,000 service enterprises, invested in nearly 500 high-tech enterprises, cultivated 30 listed enterprises, specialized in more than 160 high-tech enterprises, more than 50 enterprises listed on the New Third Board, more than 300 national high-tech enterprises, and more than 200 scientific and technological achievement transformation projects. Since last year, Xihua Technology, Wuxi Muchuang, etc. have all completed a new round of financing, and the invested enterprises have developed steadily.

The results of Lihe Kechuang in terms of investment incubation are also directly reflected in “investment income+profit and loss from changes in fair value”. In 2023, this portion of the contributed profit reached 370 million yuan.

It can be seen that while the company continues to promote the transformation of scientific and technological achievements in the field of hard technology, enterprises invested in incubation are achieving continuous performance growth and equity appreciation. In this process, as the company grows, Lihe Science and Innovation will gradually grow into an “invisible champion” behind the hard technology field, breaking out of an upward growth curve.

The “invisible champion” behind hard technology is expected to usher in an inflection point in value revaluation

Development in any field is spiraling upward, even more so with hard technology.

On the one hand, hard technology has cyclical properties, and industry development is inseparable from mature industrial chain support. This is closely related to the macroeconomic cycle and the promotion of industrial policies; on the other hand, the hard technology industry has a high technical threshold and entry barriers, takes a long time to transform scientific and technological achievements, and has the characteristics of a growing industry with high investment and high growth.

Therefore, investment incubation for hard technology companies requires time, resources, basic strategic judgment, and sufficient strategic strength. At the same time, considering long-term development, it is also necessary to resolve commercialization problems faced by enterprises in a timely manner.

In response to the above aspects,Lihe Science and Innovation has built a first-mover advantage and differentiated advantage in the industry.Specifically, it is the company's current hard technology investment incubation system — the “four-chain”, “three-run”, and “double first-class” system.

Lihe Kechuang takes providing first-class science and innovation services and cultivating first-class technology enterprises as the core of the entire company's business, integrating the innovation chain, capital chain, talent chain, and industrial chain to promote high-quality enterprise development. In this process, the company “runs with”, “relays”, and “leads”, covering the entire life cycle of the enterprise, and ultimately maximizes the development and investment value of the enterprise.

Based on its leading edge in hard technology investment incubation, Lihe Science and Innovation is expected to reap more dividends from the rapid development of the science and innovation service industry. According to some reports, the demand for technology services is expected to reach 2.63 trillion yuan in 2025. Facing a trillion-dollar market, Lihe Science and Innovation will unleash even greater potential for growth.

It is worth mentioning that in terms of strategic emerging industries, with Shenzhen's layout of the “20+8” industrial cluster and the digital construction of the Guangdong-Hong Kong-Macao Greater Bay Area, cooperation with science and innovation is expected to seize the rise of the digital economy and reap new growth.

At present, the subsidiary Shuyun Technology has won bids or signed contracts for multiple projects, and may provide digital solutions for more cities, enterprises or projects in the future. It can be expected that as the construction of industrial clusters accelerates, a large number of digital application scenarios will unfold, and that cooperation in science and innovation will usher in accelerated growth.

epilogue

Investing in hard technology is almost the opposite of investing in the internet. One is slow first, then fast, and the other is slow first. After a long period of upfront investment in hard technology, it will only begin to accelerate at an inflection point. At that time, its development will be able to explode exponentially.

Partnering with science and innovation to deepen “scientific and technological innovation services+strategic emerging industries” is the best expression of long-term principles, and it may be possible to re-examine its long-term potential. Coupled with continued deepening policy support for technology enterprises, Lihe Kechuang has the leading ability to serve scientific and technological innovation, and is expected to accompany the growth of technology enterprises and embrace the certainty and growth of development.

Since the pressure to increase the company's performance is fully reflected in the capital market, restarting growth in the future will release positive incentives and join forces with science and innovation to reach an inflection point in value, which is worth looking forward to.