Every move of Asia's largest private equity fund attracts attention!

Last night, JD.com Group announced that JD Health would be listed in Hong Kong.Coincidentally, Hillhouse invested $830 million in JD Health a month ago.

In addition, according to 13F documents, Hillhouse entered Burning Rock Biotech Ltd. and Sheng.com in the second quarter, and they are all new shares listed in the second quarter.

Various phenomena show that Hillhouse Capital's recent investment focus has turned to new shares that have just been listed or companies that are about to go public.

In addition, Hillhouse Capital also made frequent moves in the secondary market during the year-A shares, participating in the subscription of BeiGene, Ltd., Health Yuan, Kailiying, Guangzhou Lianda, National porcelain Materials and other companies.

According to the data, Hillhouse Capital focuses on the Internet, medicine and consumer sectors, with total assets under management of US $65 billion, making it one of the largest and best-performing private equity fund managers in Asia. Before that, almost all the new stocks invested by Hillhouse had good returns, so it was once described as a new "Poseidon shot" for Hong Kong stocks.

Shall we copy the "homework" of Hillhouse?

JD Health officially announced listing in Hong Kong

On September 21st, JD.com Group issued an announcement confirming that JD Health will be listed in Hong Kong. The announcement said that JD Health, as a subsidiary of JD.com collective, JD.com Group plans to spin off JD Health to be listed on the main board of the Stock Exchange of Hong Kong. The completion time of the specific spin-off listing will depend on market conditions and other factors. JD Health's main business includes pharmaceutical retail and Internet medical services.

In fact, the market has been buzzing about the news that JD Health is going to be listed in Hong Kong.

At the end of July, it was rumored that JD.com planned to spin off JD Health's listing in Hong Kong, raising US $1 billion and valuing it at US $30 billion. Relevant work has been carried out and is expected to be completed by the end of this year and early next year at the earliest. At that time, a spokesman for JD.com said he did not comment on the news.

Data show that JD Health is the only sub-group of JD.com Group that operates major health-related business, and will rely on the various capabilities and resource advantages of JD.com Group. On the basis of the existing four business sections of pharmaceutical retail, pharmaceutical wholesale, Internet medical care, and healthy city, we will gradually improve the industrial layout of "Internet + Medical and Health".

Hillhouse spent 830 million dollars a month ago.

What attracts the most attention on JD Health is his investment institution.

Data show that JD Health conducted a round of financing on November 15, 2019, with a post-investment valuation of US $7.143 billion, led by CICC Capital and JD.com Group. CICC Capital is China International Capital Corporation's only private equity fund business platform, uniformly manages China International Capital Corporation's private equity fund business at home and abroad.

In August 2020, JD Health received a US $830 million (HK $6.4 billion) investment from Hillhouse Capital.。According to JD Health's prospectus, JD Health, a subsidiary of JD.com Group, signed a final agreement with Hillhouse Capital on JD Health's round B financing of non-redeemable preferred shares on Aug. 17, 2020. Hillhouse Capital expects total investment to exceed $830 million. This transaction needs to meet the conventional delivery conditions, after delivery, JD.com Group will still be the controlling shareholder of JD Health. Delivery is expected to be completed in the third quarter of 2020.

With regard to this cooperation with Hillhouse, JD Health said:

Hillhouse Capital is a leading investment management company and has established a comprehensive industrial ecology in the field of health care in China. With the industry experience and resources of Hillhouse Capital, JD Health will continue to strengthen its pharmaceutical supply chain and further explore more business opportunities in the field of health care.

Hillhouse made frequent moves during the year.

As a matter of fact, Hillhouse has been very active in investing in the primary market this year, and has participated in the subscription of a number of A-share listed companies such as Ningde era and Health Yuan during the year.

For example, the night of July 17thNingde eraTo issue a report on the issuance of non-public offerings. According to the report, the Ningde era set an additional offering price of 161yuan, issued 122 million shares and raised 19.7 billion yuan. Among them, Hillhouse Capital subscribed 10 billion yuan, Zhuhai Hillhouse Sui Cheng equity investment partnership (limited partnership) subscribed for 600 million yuan. After the registration of the private offering of new shares, Hillhouse Capital will be among the top 10 shareholders of the Ningde era with a stake of 2.27 per cent.

July thirteenthBeiGene, Ltd.Announced that it will add 146 million shares and raise US $2.08 billion. Among them, Hillhouse Capital subscribed for no less than 1 billion US dollars, which is also the eighth time that Hillhouse Capital has invested in BeiGene, Ltd..

On the same day, Hillhouse Capital appeared inHealthy yuanIt's on the list of additional battles. Health Yuan disclosed that it plans to raise more than 2.1 billion yuan, and Hillhouse Capital will subscribe in full. Previously, Hillhouse Capital also participated inKailiying, Guanglianda, national porcelain materialsWait for the subscription.

Photo: from Health Meta announcement

It is worth noting that compared with the high-frequency sales in the primary market, Hillhouse has also sold frequently in the secondary market this year.

In terms of US stocks, according to the newly released 13F documents, Hillhouse Capital bought 17 new stocks in the second quarter of 2020, including Burning Rock Biotech Ltd. and API, which only landed in US stocks in mid-June. This means that high-collar capital is most likely involved in the renewal of the two stocks (which is, of course, just a guess).

Photo: Hillhouse Capital New entrants in the second quarter of 2020

It is worth noting that the listing performance of the two companies is not bad. Burning Rock Biotech Ltd. was listed on the NASDAQ Stock Exchange on June 12, and the stock closed up 49.27%. On June 27, Sheng.com, a real-time interactive cloud service provider, was officially listed for trading on NASDAQ in the United States. as of the close of the day, the share price of Sheng.com soared 152.5%.

What is the ability of Hillhouse to "deposit tickets"?

Back to the original, this layout JD Health, Hillhouse can harvest big red packets as desired?

Let's first take a look at the companies that went public during the epidemic and have a high-level "figure" behind them.

Among the A shares, the most typical isA good product shop和Bull GroupThey are also Hillhouse's "proud work" in the field of consumption.

In September 2017, Hillhouse Capital invested more than 800 million yuan to become an important shareholder in the quality store. According to the prospectus, Zhuhai Hillhouse holds 5.15%, Hong Kong Hillhouse holds 5%, and Ningbo Hillhouse holds 2.85%, which means Hillhouse holds a total of 13%.

On February 24 this year, quality shops landed on the main board of the Shanghai Stock Exchange and ushered in 15 consecutive trading limits.According to media estimates, excluding the 820 million yuan invested in the primary market before the listing, Hillhouse Capital made a total profit of 1.287 billion yuan on the quality store in 10 days.Earn an average of more than 100 million a day。

Photo: performance of quality stores after listing

In addition, on February 6 this year, the "socket No.1 Brother" Bulls Group went public. Although it was during the epidemic, the share price of the Bulls Group soared by 200% in just one month, and the total market value soared by more than 100 billion yuan.

In December 2017, Hillhouse Capital, as the only institutional investor, transferred a 2.235% stake in the Bulls Group for 800 million yuan, making it the fourth largest shareholder of the Bulls Group.In just over two years, Hillhouse Capital has made a profit of more than 1 billion yuan on this investment project.

Photo: performance of Bulls Group after listing

However, compared with Hillhouse's investment in consumer and pharmaceuticals, Hillhouse is slightly inferior in property.

In May this year, Jianye New Life listed on the Hong Kong Stock Exchange, introducing Hillhouse Capital as a cornerstone investor. Hillhouse subscribed for its US $75 million (HK $585 million) stake.Since its listing in May this year, Jianye New Life is estimated to have increased by nearly 4%.

Hong Kong stocks "hit the new" Poseidon injection?

Wind data show that from 2018 to now, Hillhouse has used Gaoling Fund, L.P. And Hillhouse Funds became cornerstone investors in a number of listed companies during the period, including China Tower Corporation, BeiGene, Ltd., Fangda Holdings, Hansoh Pharmaceutical Group, Jinxin Reproduction, Poly property, Jianye New Life, Haijiya Medical and Kangji Medical.

Among them, the best performance is Hygia Medical, which has risen more than 100% since its listing on June 29 this year, and Hillhouse's floating profit on it is roughly estimated to be more than 380 million yuan.

As companies that have been invested by Hillhouse are likely to rise after listing, Hillhouse was once praised as a new "Poseidon shot" for Hong Kong stocks.

According to Hillhouse's previous investment vision, JD Health's follow-up listing is still worth looking forward to.

Edit: sabrina