• Economic Market Analysis
• 2024-09-04

National Big Fund: Semi, IC Industry Boost.

According to Qichacha, on September 4th, Hongxin Weina underwent a business change, with the addition of Shenzhen Guide Fund Investment Co., Ltd., National Integrated Circuit Industry Investment Fund Co., Ltd. (hereinafter referred to as "National Big Fund Phase I"), and Hongxin Venture Capital (Shenzhen) Enterprise (Limited Partnership) becoming shareholders of the company. The company's current registered capital is 1.28 billion yuan. Among them, National Big Fund Phase I holds 38.74% of Hongxin Weina's shares, with a subscribed capital contribution of 496 million yuan.

Hongxin Weina, established in 2018, is a high-tech company dedicated to the research and development, production, and sales of domestic digital integrated circuit electronic design automation (EDA). The company aims to achieve technological deployment at key nodes of the digital integrated circuit EDA platform through independent research and development, technology introduction, and cooperative development, to create a complete full-process integrated circuit design domestic digital EDA platform, and to achieve technological breakthroughs in this key link of the state-owned semiconductor industry chain.

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It's not just the National Big Fund Phase I that is taking action. In July of this year, the National Integrated Circuit Industry Investment Fund Phase II Co., Ltd. (hereinafter referred to as "National Big Fund Phase II") invested in Chongqing Xinlian Microelectronics Co., Ltd., with a subscribed capital contribution of 2.155 billion yuan, holding a 24.77% stake.

There are currently three phases of the National Big Fund. The National Big Fund Phase I was established in September 2014 with a registered capital of 98.72 billion yuan, and the total funds raised were 138.7 billion yuan. The National Big Fund Phase II was established in October 2019 with a registered capital of 204.15 billion yuan.

On May 24th of this year, the National Integrated Circuit Industry Investment Fund Phase III Co., Ltd. (hereinafter referred to as "National Big Fund Phase III") was established, with a registered capital as high as 344 billion yuan, higher than the registered capital of the previous National Big Fund Phase I and National Big Fund Phase II.

Yuan Shuai, Deputy Secretary-General of the Zhongguancun Internet of Things Industry Alliance, told the Securities Times reporter that the consecutive actions of the National Big Fund Phase I and Phase II this year, as well as the establishment of the first three phases of the National Big Fund, show the country's continued attention and strong support for the semiconductor and integrated circuit industries. These investments not only provide financial support for related enterprises but also bring policy encouragement and industrial guidance, which helps to promote the development of domestic semiconductor and integrated circuit industries and enhance the overall competitiveness of the industry chain.

"Looking at the investment targets, the National Big Fund not only focuses on core links such as integrated circuit design and manufacturing but also enters the field of semiconductor device specialized equipment manufacturing. This comprehensive investment layout helps to improve the domestic integrated circuit industry chain and enhance overall competitiveness. At the same time, the National Big Fund's support for emerging technologies and enterprises also injects new vitality and momentum into the industry's development," said Wang Peng, a researcher at the Beijing Academy of Social Sciences.

From the perspective of A-share listed companies held by the National Big Fund (Phase I and Phase II), according to statistics by the Securities Times reporter, as of the end of June 2024, the National Big Fund (Phase I and Phase II) appeared in the top ten circulating shareholders' list of more than 30 companies (after removing duplicate holdings, there are 16 companies with a market value of shares held exceeding 1 billion yuan). Among these more than 30 companies, many have equity invested before going public, and the National Big Fund is also actively involved in A-share company private placement projects. For example, in the 2 billion yuan private placement project of North HuaChuang in 2019, the National Big Fund Phase I subscribed to 911 million yuan; in the 8.5 billion yuan private placement project of North HuaChuang in 2021, the National Big Fund Phase II subscribed to 1.5 billion yuan; in the 5 billion yuan private placement project of ShiLan Micro in November 2023, the National Big Fund Phase II invested 1.24 billion yuan to subscribe.

Data shows that, according to the statistics at the end of each year (2024 is based on the end of June), among the more than 30 companies mentioned above, eight companies have been held by the National Big Fund for more than 5 years. Among them, San'an Optoelectronics has been held by the National Big Fund for as long as 10 years, and Changchuan Technology, Tongfu Microelectronics, and Guoke Micro have been held by the National Big Fund for as long as 7 years. Overall, companies that have been held by the National Big Fund for more than 5 years have performed outstandingly. Among them, since North HuaChuang was invested in by the National Big Fund in 2019 (private placement price of 61.27 yuan per share), the highest increase during the period has been more than 7 times.

In Wang Peng's view, the National Big Fund, by holding long-term equity in enterprises, not only provides stable financial support for the invested enterprises but also helps them solve various problems in the development process through its rich industry experience and resource network. This long-term investment and value creation behavior model helps to promote the continuous growth and development of the invested enterprises. Moreover, the investment behavior of the National Big Fund also conveys to the market the confidence and expectations for the future development of the integrated circuit industry, which helps to enhance the valuation level and market attractiveness of the entire industry.Bai Wenxi, Vice Chairman of the China Enterprise Capital Alliance, stated to the Securities Times reporter that the investment strategy and actions of the National Big Fund are in line with the definition of patient capital. By holding equity for the long term, the fund supports the growth and development of enterprises, which not only helps them achieve long-term goals but also brings considerable long-term returns to investors. At the same time, the exemplary role of the National Big Fund should not be overlooked, as its investment behavior can guide market capital towards key technologies and strategic industries, promoting the healthy development of the entire sector.