According to the Star Daily on December 20th (Reporter Chen Mei), an A-share IPO was achieved within two and a half years, with expected final exit returns reaching three times... In the current adjustment period of the primary market, this investment can be considered "stable."

The "stable" operation investment institution is a well-established PE located in Xuhui District, Shanghai - Shanghai Ruily Investment Fund Management Co., Ltd. (referred to as Ruily Investment).

Recently, reporters from the Star Daily visited Ruily Investment and found it to be a low-key and pragmatic PE institution. The company was established in 2011 and focuses on investments in emerging industries. In the process of "technology-driven, cultural leadership, and industry landing," Ruily Investment's Vice President Shen Furong believes that investment is a long-term endeavor, requiring solid investment research preparation before decision-making.

"We can have many dimensions to screen projects, but only solid industry research can identify companies with sustained and stable operations in emerging industries and make rational determinations."

Capturing opportunities through industry research, achieving one IPO in two and a half years.

Despite the current adjustment period in the primary market, Shen Furong, who has 25 years of experience, is not pessimistic. He believes that China is the largest economy in the world, with a complete industry chain system, and there are still many projects available for investment under technological innovation.

In Shen Furong's view, every era has its profitable industries, and good projects can arise at any time. "Currently, Ruily Investment remains cautiously optimistic."

This cautious optimism reflects Ruiley Investment's pragmatic investment style and its strategy of careful planning before action. On one hand, in terms of LPs, Ruiley Investment chooses to collaborate with cornerstone investors who have advantageous positions in the industry, aiming for innovation and change, and deeply cultivating within the industry; on the other hand, in investments, research comes first. Before investing, Ruiley Investment always conducts thorough industry and project research to ensure that the investment symbol is positioned for long-term development potential.

"Depth" and "Breadth" are details in Ruiley Investment's industry research. Shen Furong recalled that the team that invested in Gangdi Technology (301633) had only six members, yet they reviewed more than 500 projects each year. For each project, the investment team must conduct at least one online or offline communication, from which they select less than 30 projects for formal project listing; after the investment decision meeting, only 10 projects remain; finally, at the investment stage, only six or seven projects are investable.

Such strict screening not only covers the "breadth" fully, putting as many target companies as possible in Ruiley Investment's database; in terms of "depth", Ruiley Investment also screens through repeated communications and due diligence.

According to reports from the "Ke Chuang Ban Daily", the recently listed Gangdi Technology (301633) is a project that was invested by the technology fund led by Shen Furong in 2022. At that time, after industry research, Ruiley Investment discovered that the field of port machinery automation, where Gangdi Technology operates, is a typical area for traditional industry upgrades, with broad prospects.

From an industry trend perspective, with the growth of global trade and the advancement of port construction, the demand for port machinery equipment has significantly increased. Particularly, the replacement demand for old equipment has driven the need for port automation equipment; in selecting companies within this sector, Ruiley Investment values companies with technological advantages such as precise positioning, intelligent vision, and multi-mode intelligent detection, and Gangdi Technology's shield tunneling Variable-frequency Drive exhibits excellent performance in shield machines.

The shield machine is a "national heavy weapon" in industrial construction, with strict requirements for the Variable-frequency Drive's low-speed large torque control, multi-motor high-precision synchronous control, heat dissipation efficiency, and compact installation space.

Based on this clear industry research and investment logic, Ruiley Investment took action. The investment proved to be very "precise". Shortly after Ruiley Investment participated in equity financing in 2022, Gangdi Technology (301633) started the listing process. Recently, this company officially landed on GEM, with its market cap exceeding 10 billion yuan on the first day of listing.

Identifying value across cycles, decisive actions were taken in commercial aerospace and photovoltaic companies.

For a long time, PE investment was seen as a last push before the IPO. However, with the changes in times, this Pre-IPO investment has gradually been "abandoned" by investment institutions.

The current investment environment is completely different from ten years ago. Previously, investing in popular projects meant success if they could be listed. But now this approach is difficult to replicate, and the number of companies that can go public in the capital markets has greatly decreased, exposing problems with Pre-IPO last pushes in investments." Shen Furong admitted during the interview.

However, reducing the quick and short Pre-IPO investments does not mean not pursuing investment efficiency. During the industrial research process, once a good track or a potential company is identified, Ruili Investment will take action.

The investment in commercial aerospace and Trina Solar Co., Ltd. is one of Ruili Investment's cases of discovering value and crossing cycles. At the end of 2023, the Central Economic Work Conference proposed to "build several strategic emerging industries such as biological manufacturing, commercial aerospace, and low-altitude economy." This conference directly ignited the investment enthusiasm for commercial aerospace.

According to data from the Financial Association's Venture Capital Connection, between January and October 2024, there were 102 investment and financing events in China's commercial aerospace field, with a financing amount of 12.409 billion yuan, both reaching their highest levels since 2019.

However, in 2021, Ruili Investment noticed this track. At that time, the industry was still relatively "cold". After conducting industry verification, it was found that the aerospace industry, as an important national strategy, needs to be vigorously developed in China against the backdrop of a significant technological gap domestically and internationally.

After identifying this trend, Ruili Investment decisively took action and invested in Landspace Technology and Weina Star in 2022. Regarding commercial aerospace, many investors currently express that the industry has investment opportunities. However, looking back, very few institutions dared to invest in the aerospace industry in 2021 and 2022. With Ruili Investment's advance layout, the company has also seen the valuations of its invested companies double during this wave of commercial aerospace.

The investment in Trina Solar Co., Ltd. is similar. In 2016, the photovoltaic industry was in a downturn, and many companies were in a state of recession. However, at that time, Ruili Investment made a decision to invest one-third of a fund's position in Trina Solar Co., Ltd.

The reason for the counter-cyclical layout is quite "simple": Ruile Investment believes that in three years, China's photovoltaic industry will experience a major explosion. Data and events have proven that in 2019, the scale, market performance, and technological progress of China's photovoltaic industry reached new heights.

That year, the National Energy Administration issued a notification on the construction of wind power and photovoltaic projects in 2019, marking the entry of the photovoltaic market into the parity era; meanwhile, in 2019, overseas markets experienced comprehensive growth, the EU market rapidly recovered, and the demand in the USA market rebounded significantly.

As a result, this investment yielded Ruile Investment a tenfold return over four years. A tenfold return is basically the "home run" in the PE stage of investment.

Although PE institutions are in a mature stage of investment, Shen Furong believes that the invested projects must have the ability to withstand economic cycles, industry cycles, and project life cycles. Only then can they realize their self-value in the context of the inherently poor liquidity in the primary market.

Be a responsible GP and let time be the best "touchstone".

Due to the anchoring of investments, Ruile Investment is quite "composed" regarding exits. Going public, mergers and acquisitions, and buybacks are all ways for Ruile Investment to exit.

Regarding exits, Shen Furong, who has been in the industry for 25 years, has quite a few "insights." He believes that exits are related to investments; good investments naturally lead to good exits, and the most important thing is to match the capital attributes. For LPs pursuing absolute returns, Ruile Investment focuses more on exits in the capital market or short, quick merger projects; for long-term funds, they can wait more comfortably for project growth.

Sometimes, when the capital attributes cannot match the LP's demands for DPI, Shen Furong would rather not invest than gamble and rely on luck. A responsible PE institution must account for every penny of LP funds; it is essential to turn uncertainty into the greatest possible certainty in investments.

As of now, the technology fund led by Shen Furong has been in operation for three years. According to the 4+3 investment model, this technology fund has a little over one year left for investment.

In addition to the successful cases mentioned above, industries such as Aerospace, Semiconductors, and New Materials are also covered by this technology fund. Regarding the AI investment opportunities in the wave of new technologies, Shen Furong told the reporters from Star that this technology fund will focus on companies with AI application scenarios and companies producing core materials and components for embodied intelligence.

Regarding the investment logic for the latter, he told reporters that the main reason why Musk chose to establish Tesla's factory in China is due to the large industrial chain foundation and advantages present here. The same is true for embodied intelligence; the development of a humanoid robot involves not only a "small brain" and a "big brain" but also materials and high-precision components, and the development of these key components is what Ruili Investment has confidence in.

Throughout his many years of investment career, Shen Furong has increasingly realized that investing is an art that requires perseverance and determination.

For the future, he will lead more funds to continue moving forward, allowing time to become the best "touchstone."