“Science and Technology Innovation Board Daily”, July 21 (Reporter Yang Xiaoxiao) State-owned assets from Quzhou have officially joined Xinhu Zhongbao.

On July 17, Xinhu Zhongbao announced that the 4th Extraordinary General Meeting of Shareholders of the Company in 2024 reviewed and approved the list of directors of the 12th board of directors. Quzhou Zhibao and its related parties have actually controlled the company's board of directors, and Quzhou Zhibao has become the company's controlling shareholder. Penetrating upward equity, the actual controller of Quzhou Zhibao is the Quzhou State-owned Assets Administration Commission.

The “Science and Technology Innovation Board Daily” reporter noticed that since the beginning of 2023, Quzhou State-owned Assets has taken over two equity transfers to join Xinhu Zhongbao and become the largest shareholder. Immediately after that, Quzhou State-owned Assets implemented two rounds of plans to increase its holdings in succession, continuing to increase capital investment in Xinhu Zhongbao.

Quzhou's state-owned “optimism” about Xinhu Zhongbao stems largely from the foundation of this company's recent technology industry layout.

Some industry sources have analyzed that in recent years, Quzhou has been actively attracting new strategic industries to promote the transformation and upgrading of local industries, while Xinhu Zhongbao is also making industrial strategic adjustments and has invested heavily in emerging industries. “Therefore, joining Xinhu Zhongbao has enabled Quzhou to rely on listed company platforms to better gather resources and continue to attract and deploy in emerging industries.”

With the completion of the mixed reform of Xinhu Zhongbao, Quzhou's industrial development path has also become more clear.

Quzhou state-owned and listed company cooperation model

Before Quzhou state-owned assets supported Xinhu Zhongbao through shareholding, Xinhu Zhongbao and Quzhou had been “cooperating” for a period of time.

According to Xinhu Zhongbao's 2023 annual report, the company moved to Quzhou in 2021 and “carried out comprehensive strategic cooperation with it, and made extensive use of the company's investment and layout in blockchain, big data, artificial intelligence, new materials, etc., to develop comprehensive cooperation with Quzhou at multiple levels in green energy, intelligent manufacturing, smart cities, and digital transformation.”

In 2022, Xinhu Zhongbao and Quzhou state-owned investors jointly invested to establish Quzhou Qufarui New Energy Materials Co., Ltd. (hereinafter referred to as “Qufaduan”). In response, Xinhu Zhongbao said that Qufaduan will use the advantages of the Quzhou fluorosilicon industry to “expropriate 450 acres of land in the Quzhou Intelligent Manufacturing New Town to achieve a production capacity of 0.4 million tons of new high-performance anode materials per year after delivery.”

In the field of new materials, Quzhou has undoubtedly achieved a first-mover advantage across the country. At present, the new materials industry has become the first industry in Quzhou, mainly involving the three major fields of new fluorosilicon materials, power battery materials, and electronic chemical materials. Among them, the new lithium battery materials industry cluster represented by Huayou Cobalt, Juhua Group, Times Lithium, and Shanshan New Materials is growing rapidly. The listed company Xinya Manufacturing even chose to relocate here because of the Quzhou lithium battery industry cluster.

Xinya Manufacturing was originally a company based in Zhuhai. In 2023, the company decided to move across provinces to Quzhou. Regarding the reason for the relocation, Zhang Jintao, vice president of Xinya Process, once said in an interview with the media, “Quzhou has a complete lithium battery industry chain. Coupled with the company's acquisition of a subsidiary in Quzhou and the subsequent business development process, I deeply appreciated the efficiency, responsibility, and concern and support for enterprise development of the Quzhou government department, so we moved the headquarters of the listed company to Quzhou.”

In addition to new materials, new energy, integrated circuits, intelligent equipment, life and health, and specialty paper are also iconic industries in Quzhou.

In the field of new energy, Quzhou has already launched a number of major projects.

The first is Photovoltaic Unicorn, a new energy source. The company was founded in 2018 and is mainly engaged in R&D and manufacturing of high-efficiency photovoltaic cells, module packaging technology, and system applications. A new energy investor revealed to the “Science and Technology Innovation Board Daily” reporter that the initial valuation of a new energy source after the pre-IPO round has already reached 9 billion yuan. In December 2023, a new energy company submitted to GEM to raise 2.5 billion yuan.

Geely's Quzhou Electroelectric Project is said to be “the world's largest intelligent manufacturing plant for three electricity and energy storage systems so far”. It covers an area of 1,567 acres, with a construction area of 1.46 million square meters. After full production, it has production capacity for batteries, batteries, electric drives, and energy storage systems.

In the field of integrated circuits, relying on their accumulation and advantages in the field of materials, Quzhou's integrated circuit companies are also mainly concentrated in the upstream sector. Zhongjuxin, which landed on the Science and Technology Innovation Board in the second half of 2023, is an electronic chemical materials company from Quzhou. Up to now, the market value of Zhongjuxin has exceeded 10 billion yuan.

As can be seen, Xinhu Zhongbao's high-tech enterprise portfolio has quite a few enterprises that can collaborate with key industries in Quzhou. According to the company's 2023 annual report, companies already invested in Xinhu Zhongbao include wide-bandgap semiconductor materials research and development, Fujia Industrial, and general processor design company Longxin Zhongke.

Some analysts told the “Science and Technology Innovation Board Daily” reporter that as Quzhou state-owned assets officially control the Xinhu Zhongbao board of directors, the two sides may use their own advantages to further promote cooperation in investing in high-tech enterprises in the future.

“For Xinhu Zhongbao, it needs support from state-owned assets to achieve development and transformation, and for Quzhou state-owned assets, with this platform for listed companies, it is also possible to further promote investment, promotion, and cultivation of high-tech industries.” According to the analyst mentioned above.

State-owned assets lead the construction of a “6+X” industrial chain

In addition to “joining hands” with listed companies, Quzhou is also attracting investment through multiple channels by initiating the establishment of industrial funds. Over the years, the local industry guidance fund in Quzhou has also gone through different stages of development and evolution.

In 2016, the government guided funds were on the rise, and early exploration began in Quzhou. At that time, its industrial funds were still mainly investing in non-targeted sub-funds. By 2018, Quzhou's industrial fund investment model had begun to shift.

On the official website of the Quzhou Finance Bureau, the “Science and Technology Innovation Board Daily” reporter noticed an announcement relating to the special audit and arrangement of the Quzhou Industrial Fund investment business.

This announcement, issued in 2018, shows that the Quzhou government industrial fund at the time had some problems that needed to be improved in terms of fund operation, institutional system, idle funds, and sub-fund management.

Regarding the next steps, the announcement clearly states, “The orientation and positioning of government industrial funds should be different from social private equity funds. Their main function should be to provide policy, capital and capital support for the introduction and implementation of major industrial projects and promote industrial transformation and upgrading;

The next step is to consider that future industrial funds will follow the market-based model in terms of process settings, but the investment direction should be mainly administrative-oriented, mainly serving the construction of key industries and the introduction of key projects. In terms of form, direct investment in key imported projects will be increased appropriately to ensure the correct orientation of industrial funds.”

The announcement at the time specifically mentioned a special sub-fund — the Huahai Energy Industry Fund, and a direct investment project — Jin Ruihong.

According to business information, the Huahai Energy Industry Fund, the full name of Quzhou Huahai New Energy Technology Industry Equity Investment Partnership (Limited Partnership), was cancelled in 2023. The equity investment fund's major LP at the time was the listed company Huayou Cobalt. Meanwhile, in 2019, Huayou Cobalt's wholly-owned subsidiary acquired 99.01% of the shares of Quzhou Huahai New Energy Technology Co., Ltd. (hereinafter referred to as “Huahai New Energy)” held by the Huahai Energy Industry Fund at a price of 0.773 billion yuan.

Huayou Cobalt stated in the announcement at the time that Quzhou Huahai New Energy Technology Co., Ltd. is a new energy lithium battery ternary material precursor project cultivated through industrial fund investment and is an exploration and innovation of the company's new energy lithium battery materials industry development model.

After the transaction was completed, Huayou Cobalt became the wholly-owned controlling shareholder of Huahai New Energy; while Quzhou's state-owned capital holding Huahai New Energy's shares by participating in the Huahai Energy Industry Fund, it withdrew through project mergers and acquisitions, and received a book return of about 28%.

Investors in the field of new energy told the “Science and Technology Innovation Board Daily” reporter that Quzhou State-owned Assets supports the upgrading and transformation of Huayou Cobalt, a leading enterprise in Zhejiang Province, through the Quzhou Financial Holdings platform. “On the one hand, it supports the development of leading local enterprises and promotes important enterprises to play a leading role in the chain. On the other hand, Quzhou State-owned Assets has also reaped steady investment returns in subsequent acquisitions of listed companies, so this foundation is regarded as a benchmark.”

Jin Ruihong is another successful example of Quzhou's state-owned assets supporting industrial development. Jin Ruihong's controlling shareholder, Liangwei, issued an announcement in 2022 stating that Quzhou Wisdom, an industrial investment fund supported by Quzhou's state-owned assets, transferred 4.37% of its shares to Xianyou Hongqian. Since then, Quzhou Wisdom no longer holds Jin Ruihong's shares. Also, according to business information, the partner of Xianyou Hongqian Deacon is Li Anwei.

Based on the above successful experience, the transformed Quzhou Industrial Fund first established a regional industrial fund covering the entire city in 2019, with a total fund size of 5 billion yuan. Since 2021, the Quzhou Industrial Fund has entered a new stage of development, setting up an industrial fund with a total scale of 5 billion yuan to focus on strong industrial cities and accelerate the pace of industrial transformation and upgrading in Quzhou. In October 2023, Quzhou continued its efforts to establish the first 10 billion yuan state-owned enterprise investment fund to form the three parent fund platforms of regional funds, industrial funds, and state-owned enterprise funds.

According to the “Quzhou Capital Investment “Double Thousand Plan” implementation plan issued by Quzhou in the second half of last year, Quzhou will focus on the “6+X” industrial chain and accelerate the formation of a new model of “fund+base+industry” diversified linkage, and strive to achieve a fund cluster size of 100 billion yuan in about 3 years, leveraging 200 billion yuan in social capital.

The ultimate effect of the Government Industrial Fund is still reflected in the development of local industries. According to data, throughout 2023, Quzhou signed 215 projects worth more than 100 million yuan (including 7 10 billion projects), received 41.83 billion yuan in investment promotion projects; implemented 391 manufacturing projects of 10 million yuan or more, 45 major manufacturing projects in the province, and the city's manufacturing investment increased by 30.4%, ranking second in Zhejiang Province. The city's six iconic industrial chains achieved an output value of 177.9 billion yuan, accounting for 61.1% of the regulated industrial output value.

In the past 3 years, Quzhou's industry has developed rapidly. In the 3 years since 2021, the number of listed companies in Quzhou has surpassed the previous 23 years, including Huakang shares, Jinwo shares, Yonghe shares, and Hechuan Technology.

With Quzhou's state-owned assets completing the “entry” of Xinhu Zhongbao, there is still a lot of room for imagination in the development of new quality productivity in Quzhou.