Empowering High-Tech Investments in China: Broad General Holding Files for Hong Kong IPO

EQS Newswire / March 7, 2023 / 3:04 PM UTC+8

Enabling Advanced Technological Ventures in China: Extensive Global Holdings Submits for Hong Kong Initial Public Offering.

Hong Kong-based company, Broad General Holding Limited, has officially applied to be listed and traded on the Main Board of the Hong Kong Stock Exchange. The private investment fund manager specializes in high-tech industries and aims to support and empower these companies in China. With favorable policies and numerous investment prospects, China has become a key market for Broad General's investment activities.

According to Frost & Sullivan, as of 31 December 2022, Broad General was the largest private investment fund manager in China for wealthy local individuals and focused on investing in high-tech industries. By the end of 2022, the funds managed by the company achieved an impressive internal rate of return ("IRR") of 18.7%, surpassing the industry average. This success has resulted in a strong following of loyal investors. Over the Track Record Period, the number of investors in Broad General increased significantly with an average annual growth rate of approximately 12.5%. In the years ending on 31 December 2020, 2021, and 2022, repeat investments by clients accounted for 43.6%, 48.1%, and 69.2% of the total funding respectively. As the fund size continues to grow and attract more loyal investors, Broad General has experienced steady revenue growth. This has led to total revenue, including fund management fees, of RMB122 million, RMB215 million, and RMB212 million for the years ending on 31 December 2020, 2021, and 2022 respectively. As a result, adjusted net profits reached RMB270 million, RMB730 million, and RMB740 million respectively. The growth seen in the past two years has been particularly exceptional.

The remarkable results and financial performance of Broad General have caught the attention of the market. Sam Chi Yung, the Head of Research at Doo Financial HK, praised Broad General as a leading player in the industry and highlighted the potential for significant upside in the valuation of its investments. By the end of 2022, the company had invested in 105 companies at different stages, with 25 of them doubling in value and 14 quadrupling in value. The various exit strategies offered by Broad General have also generated interest. Some of the companies that have gone public in Hong Kong after receiving investment from Broad General include ClouDr, a top chronic condition management company, Infinities Technology, the first gaming-related company to be listed on the Main Board of the Hong Kong Stock Exchange since the pandemic, and XGIMI Technology, a leading player in the Chinese projection market. Broad General has also employed other exit strategies to facilitate further growth and maximize returns for invested companies. In 2019, they invested in Fenbeitong, a corporate expense management platform based in China, and partially exited in 2022 through a share repurchase, achieving a Multiple on Invested Capital (MOIC) of approximately 5 times. Public information shows that Fenbeitong experienced significant revenue growth each year from 2019 to 2022.

China's push for technological self-reliance has been a key aspect of its national strategy and has played a vital role in driving innovation and economic growth. The revenue generated by high-tech industries in China has skyrocketed from RMB35 trillion in 2017 to RMB63.4 trillion in 2021, showing a remarkable compound annual growth rate of 16% over the past four years. Thanks to supportive policies, the high-tech sector has witnessed a surge in the number of technology companies at various stages of development, each with unique needs. This has created a wealth of investment opportunities, particularly in the private equity industry that focuses on high-tech enterprises.

Sam expressed his positive outlook for the future of the industry and stated that investments from private equity (PE) and venture capital (VC) firms like Broad General will play a significant role in driving innovation and growth for Chinese businesses. In the past decade, PE/VC investments have been successful in promoting the development of Chinese companies in various sectors such as fintech, e-commerce, logistics, and the Internet. These investments have also helped advance core technologies and expand the global presence of Chinese manufacturing. Looking ahead, the equity market in China focused on high-tech industries is projected to grow further. This growth will be fueled by supportive policies, the increasing digitization of domestic small and medium-sized enterprises (SMEs), and the continued technological advancements in high-tech industries. Therefore, Sam believes that Broad General's decision to apply for listing is timely and significant as they are a leader in the industry.

03/07/2023 Distribution of a Financial Press Release, sent out by EQS News. The company is solely accountable for the details mentioned in this notice.

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