Viewpoint Network Another stone was thrown into the lake which was already not calm.
The hottest news in the capital market this weekend was the disappearance of top investor Bao Fan.
Huaxing Capital announced on February 16 that the company is temporarily unable to get in touch with Chairman and CEO Bao Fan; it is not aware of any information showing that Bao Fan’s loss of contact is or may be related to the business and/or operation of the group, the company will be contacted by the executive committee (including Xie Yijing, Wang Lixing and other company management) continue to be responsible for the daily management and operation.
It is reported that Bao Fan has not appeared in the office or other public places in recent days; he cannot be contacted by mobile phone or WeChat. His last public appearance was at the beginning of December 2022. He attended the 2022 Future Science Awards Ceremony. The latest developments in his WeChat circle of friends were still on January 9th. It got off to a good start and became Huaxing New Economy Fund’s first IPO in 2023.
Bao Fan is one of the top investors in the capital market. He is known as the “King of Mergers and Acquisitions” and “Capital Matchmaker”. His investment cases include well-known Internet companies such as JD. Growth companies such as Bloomage Bio, Bilibili, and Pao Mart are behind-the-scenes traders behind the merger of Didi Kuaidi, Meituan Volkswagen, and 58 Ganji.com.
Being able to promote multiple mergers and acquisitions that affect the Internet competition landscape is enough to prove Bao Fan’s capital skills.
However, in the end, investment is always a game of people’s hearts. After all, it is not everyone’s choice to click until the end and accept as soon as it is good, but Li Ka-shing’s “not earning the last copper plate” always has his deliberations.
Battle of the Shells
Bao Fan’s investments are mostly top Internet platforms, including “the first share of the housing service platform” Keike.
On the evening of August 13, 2020, Beijing time, Beike officially landed on the New York Stock Exchange under the stock code BEKE, with an opening price of US$35, a 75% increase from the issue price. Subsequently, the share price of Keike Fangfang ushered in a rise, and the stock price approached 80 US dollars in November of that year.
On the day the bell was ringing, Bao Fan sent a letter “Salute to Keike, Doing the Difficult and Right Thing”, congratulating Beike for successfully landing in the capital market. Bao Fanxin stated that as the most steadfast ally of Keike, Huaxing is fortunate to be able to gain the unswerving trust of the company and become the only institution that provides “cross-chain financial services” from investment to investment banking for Keike.
The letter mentioned the judgment logic of investing in Keike at that time: “First of all, from the perspective of A fund of future, in the fields of ‘clothing, food, housing, and transportation’, we successively invested in outstanding new economic companies such as Meituan Dianping and Didi Chuxing. .And in the huge track of ‘living’, we conclude that there will also be a super platform company.”
The first time Bao Fan and Zuo Hui (the founder of Beike Find a House) met was in a coffee shop in Shunyi. Bao Fan recalled that Zuo Hui didn’t talk much, but his thinking was extremely meticulous, and he answered every question he asked very well, and he had already thought through the future of the industry at that time.
Combining the strength demonstrated by Lianjia at that time, Bao Fan was basically sure that Lianjia was the “super platform” he was looking for.
The shell is thus selected.
In the field of housing, Bao Fan’s judgment at the time was that China’s housing market will definitely transition from the previous 1.0 era to the 2.0 era at a certain point of time, that is, from the incremental market to the stock market.
As expected, the listing of Keike has brought rich returns to the participating investment institutions, among which Huaxing Capital, which is both an early investor and a joint lead underwriter, has benefited the most.
Guandian New Media learned that Huaxing New Economy Fund, a subsidiary of Huaxing Capital, participated in multiple rounds of financing for Lianjia (the predecessor of Keike). When Lianjia completed the B round of financing in 2016, Huaxing not only acted as a financial advisor, but also led the investment in the face of huge controversy. , and continued to raise in the C round of Lianjia and the D round of Keike.
In April 2016, Lianjia’s B round and B+ round of financing received 6 billion yuan of financing from Huaxing New Economic Fund, a subsidiary of Huaxing Capital. In January of the following year, Lianjia completed the C round of financing, and Huaxing New Economic Fund continued to invest.
“At that time, most people still looked at Lianjia from the perspective of traditional real estate intermediaries.” Bao Fan said that Huaxing wanted to invest in a company that had the possibility of becoming a platform in the residential industry in the future, so the vision of Lianjia was not the same as that of the market. Are not the same.
In April 2018, after Beike was launched, Zuo Hui transferred the original investor’s shares in Lianjia to Beike through an agreement. Since then, Keike has raised more than US$1.2 billion in its D round of financing, and Huaxing Capital has followed up with the investment again.
Before the IPO, Zuo Hui, the founder and chairman of Shell, held 28.9% of the shares personally, making him the largest shareholder; among institutional investors, Tencent was the largest external investor with a shareholding ratio of 12.3%; 10.2%, Hillhouse Capital holds 5.3%, and Huaxing Capital Chairman Bao Fan holds 3.8%, making him the fifth largest shareholder.
“We will definitely bet on it to win.” Bao Fan has repeatedly expressed his appreciation for Keike’s search for a house. He believes that it is one of the most successful cases in the field of industrial Internet that he has known in the past five years. It has truly transformed the entire industry from offline .
When Zuo Hui passed away, Bao Fan sent a message to mourn this business partner and close friend, admiring Zuo Hui’s strategic vision when he upgraded from a “single Lianjia” to an “industry shell”, his ability to control complex interests, and his determination to serve the entire industry. The determination to change and the willpower that the disease has never shaken.
“To me, Mr. Zuo Hui is a respectable pioneer. His lifelong career is to carry out drastic transformation and organizational upgrading of traditional, heavy, bitter and tiring industries. Let the profession of real estate intermediary gain unprecedented dignity and respect. “Do the difficult but right thing” has become the echo left by Mr. Zuo Hui to the world.”
investment road
Of course, shells are just one of Bao Fan’s well-known investment cases. Founded in 2005, Huaxing Capital was mainly engaged in financing consulting at first, and later expanded its business to mergers and acquisitions, listing underwriting, wealth management and other fields. Internet companies including JD.com, 360, and iQiyi were all served by Huaxing Capital.
JD.com is a benchmark case of Huaxing Capital. In 2010, under the lead of Huaxing Capital, JD.com received US$1.5 billion in financing from Russian venture capital DST, and then received investment from Tencent, and assisted JD.com in its US listing as a joint lead underwriter.
In 2015, Huaxing Capital can be said to have skyrocketed to 90,000 miles. Bao Fan participated in three of the seven classic mergers and acquisitions that year. The merger of Didi Kuaidi, the 58 Chasing Group, and the cooperation of Meituan and the public, Huaxing Capital contributed to many impacts on China. Mergers and acquisitions in the Internet competition landscape,
An insider in the investment circle said that in his view, if it were not for Bao Fan, others would not have been able to facilitate these blockbuster marriages.
Bao Fan was born in a top investment bank, worked for Morgan Stanley and Credit Suisse successively, and has seven years of experience in Wall Street investment banking.
In 2000, he joined AsiaInfo as Chief Strategy Officer, mainly responsible for investment, mergers and acquisitions. In 2005, he personally founded Huaxing Capital Group and served as the founder and CEO of the group.
On September 27, 2018, he led Huaxing Capital to land on the Hong Kong Stock Exchange; as of the end of June 2022, Huaxing Capital’s asset management scale was 48.6 billion yuan. According to public information, Bao Fan holds about 49% of Huaxing Capital shares and is the actual controller of the company.
According to reports citing relevant sources close to Huaxing Capital, Bao Fan’s disappearance is likely to cooperate with the investigation of former Huaxing Securities Chairman Cong Cong.
Guanguan New Media learned that Conglin has a profound banking background and has served the ICBC system for more than 20 years. Chairman and Chief Executive Officer of Silver International Holdings Limited.
ICBC Leasing is the first bank-affiliated financial leasing company in China. It is a wholly-owned subsidiary of Industrial and Commercial Bank of China. It was also the largest financial leasing company in China in terms of assets.
Bao Fan and Conglin met when Conglin was in charge of ICBC International Holdings. In July 2020, Cong Cong joined Huaxing Capital until he was taken away for investigation on September 6, 2022.
According to public information, in October 2017, ICBC Leasing approved a loan of 200 million US dollars to Huaxing Capital. The annual interest rate of the loan was 7.62% from November 17, 2017 to May 16, 2018. Day-September 28, 2018 The annualized interest rate is 7.62%, with Huaxing Capital shares as collateral.
The loan was less than one year old. During this period, Huaxing Capital officially listed on the Hong Kong Stock Exchange on September 27, 2018, and repaid the loan in the same month.
On December 28, 2022, the “Interim Measures for the Supervision and Management of Financial Leasing Companies” issued by the China Banking and Insurance Regulatory Commission stipulated that the balance of all financial leasing business of financial leasing companies to a single lessee shall not exceed 30% of net assets. In 2016, the net asset value of Huaxing Capital was only US$77.01 million, and it increased to US$239 million at the end of 2017.
The disappearance of Bao Fan caused a shock in the capital circle. In the Hong Kong stock market trading on Friday, China Renaissance Capital Holdings plunged more than 30% at the opening. As of the close, the stock price was HK$7.18, a total drop of 28.2%.
For a company with a strong personal touch, the fate of the core characters is deeply bound to it. Bao Fan had long said that Huaxing wanted to “remove Bao Fanhua”, and he knew very well that without Bao Fan, Huaxing would not have passed. But with only Bao Fan, Huaxing has no future.
Every ferry in life has its own boat. Facing a massive change, unknown and full of fear, it also brings hope.
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