Sino-Singapore Jingwei, May 7 (Xue Yufei) Shen Nanpeng, a well-known investment boss and founder of Sequoia China, known as "investing in half of China's Internet", has been making constant moves in the capital market recently.
According to the equity disclosure data on the website of the Hong Kong Stock Exchange, in April 2022, Sequoia China reduced its shareholding in Meituan three times, from 4.21% at the end of March to 3.19% on April 29. HK$8.324 billion.
Coupled with the two reductions in January and March this year, Sequoia has accumulated over 10 billion Hong Kong dollars in cash during the year.
However, after reviewing, it will be found that Sequoia has been reducing its holdings of Meituan for several years, and it is not a short-term behavior.
Industry insiders also believe that this is Sequoia's normal exit mechanism and cannot be correlated with current stock market changes.
The cumulative cash out exceeds 60 billion Hong Kong dollars
The relationship between Sequoia Capital and Meituan began in 2010. At that time, Sequoia became the investor of the A round of Meituan and the only investor in the A round, with an investment of 12 million US dollars.
Sequoia is also the only investor in the A round of Dianping. In 2015, Meituan merged with Dianping.
Meituan founder Wang Xing has publicly stated that Sequoia is the most important investor in Meituan and Dianping, and played a very active role in the merger of the two companies.
According to public information, from 2010 until its listing in 2018, Meituan has experienced at least seven rounds of financing, and Sequoia has chosen to follow the investment several times.
Due to the large number of investors in the subsequent rounds, the specific investment of Sequoia is unknown to the outside world.
But what is certain is that both Sequoia and Shen Nanpeng have formed a close relationship with Meituan and Wang Xing.
On September 20, 2018, Meituan was listed on the Hong Kong Stock Exchange with a total market value of about HK$400 billion.
On the day of listing, Shen Nanpeng issued an open letter saying, "As an investor who has always been optimistic about Meituan Dianping and accompanied the company's growth, we are also very proud!" and said, "Thank you Wang Xing for always treating Sequoia as a comrade-in-arms who fight side by side. We value our advice and help.” According to the 2018 interim report released a week after Meituan’s listing, Sequoia China owns 12.05% of Meituan’s total issued Class B shares, and Shen Nanpeng serves as a non-executive director of Meituan.
Changes in Sequoia China's shareholding in Meituan.
Source: HKEx website
12.05%, which is the highest shareholding ratio of Sequoia in Meituan, and gradually sold its shares in the following years. According to the equity disclosure data on the website of the Hong Kong Stock Exchange, from April 8, 2019, when the shareholding of Sequoia changed for the first time, until April 29, 2022, Sequoia's shares in Meituan changed 26 times. , 25 of which were reductions; the shareholding ratio decreased from 12.05% at the highest to 3.19% after the reduction on April 29, 2022, with a reduction ratio of 8.86%.
According to the above data disclosed by the Hong Kong Stock Exchange, in the three reductions in April this year, Sequoia successively reduced its holdings of Meituan by about 12,963,900 shares, 42,457,200 shares, and 500,000 shares, with an average price of about HK$161.74. /share, HK$144.78/share, HK$159.50/share, the total cash out of three times is about HK$8.324 billion.
The other two reductions in 2022 will be on March 31 and January 20. About HK$3.934 billion will be cashed out on March 31; the average price of the reduction on January 20 is not disclosed, but the lowest price of the day will be HK$215.2. Calculated per share, Sequoia cashed at least HK$6.696 billion that day.
That is to say, within 2022, Sequoia has reduced its holdings of Meituan shares five times, with a total cash-out of about HK$18.954 billion.
Sino-Singapore Jingwei calculated the stock reductions of Sequoia in the past 20 times in the same way as above. The calculation shows that from 2019 to 2021, Sequoia has cashed out at least about HK$46.611 billion from Meituan. In addition to the 18.954 billion Hong Kong dollars in 2022, the 25 shareholding reductions totaled 65.565 billion Hong Kong dollars.
As of now, Sequoia also owns 3.19% of Meituan, or about 176 million shares. Based on the closing price of HK$157 per share on May 7, the value of this part of the equity is HK$27.605 billion.
Although I don’t know how much Sequoia has invested in Meituan in total, it has now earned a total of over HK$93 billion in revenue, which is definitely a considerable profit.
More than Meituan
It is not only Meituan that Sequoia China and Shen Nanpeng have reduced their holdings. The list of equity changes also includes Pinduoduo and No. 9 Company.
Shareholding of Pinduoduo’s shareholders in 2021.
Source: Pinduoduo 2021 Annual Report
According to Pinduoduo's 2021 annual report released on April 25 this year, Shen Nanpeng holds about 133 million Class A ordinary shares of Pinduoduo, accounting for 2.6%. In the 2020 annual report, Shen Nanpeng's shareholding is about 184 million Class A ordinary shares, accounting for 3.7%. This means that in 2021, Shen Nanpeng will reduce his holdings of more than 50 million Pinduoduo shares, with a reduction ratio of 1.1%.
Shareholding of Pinduoduo’s shareholders in 2020.
Source: Pinduoduo Annual Report 2020
In addition, according to Pinduoduo’s 2020 annual report, Sequoia owns about 319 million shares or 6.4% of Pinduoduo.
However, in the 2021 annual report, Sequoia's shareholding data is no longer displayed.
Going back further, in November 2021, Xiaomi Ecological Chain Enterprise No. 9 announced that the number of depositary receipts transferred by depositary receipt holders Sequoia Capital and other inquiry-based depositary receipts was 17.6 million, accounting for the total number of depositary receipts of the company. The price of this inquiry transfer is 57 yuan per depositary receipt, and the transaction amount is 1.003 billion yuan.
Subsequently, Sequoia and other three depositary receipt holders planned to reduce their holdings of No. 9 Company’s depositary receipts by no more than 75.68 million in the next six months, accounting for no more than a total of the company’s total depositary receipts. 10.74%.
In the two equity changes, Sequoia's shareholding reduction accounted for the largest proportion.
As of the end of the first quarter of 2022, Sequoia held 11.42% of the shares of No. 9 Company, a decrease of 3.69 percentage points from 15.11% at the end of the third quarter of 2021, and was still the largest shareholder of No. 9 Company.
In addition to Internet companies, public information shows that since December 2021, Sequoia has planned to reduce its holdings in A-share companies such as New Industries, Martian, Steady Medical, Winer Technology, Yirui Bio, and Yirui Technology.
As of the end of the first quarter of 2022, Sequoia's shareholdings in New Industries, Martians, and Steady Medical have not changed; after Sequoia's shareholding in Winner Technology has dropped from 5.65% to 1.63%, it will be closed again at the end of the first quarter. Down to 0.62% and plans to sell all.
or exit normally
The reduction of major shareholders of listed companies has always been a relatively sensitive matter in the capital market, and if the shareholders who reduce their holdings are still well-known institutions or large funds, it will attract more attention from the outside world.
In particular, the current poor performance of the stock market can easily lead to over-interpretation.
Regarding the reduction of shares in Meituan, Sequoia China recently stated that the company has invested in Meituan many times since 2010, and the (share reduction) is the normal exit of its funds.
He Shixiang, the founding managing partner and chairman of Chenhua Venture Capital, analyzed Sino-Singapore Jingwei that PE and VC funds have investment deadlines. When the fund exit period, the investment assets need to be realized and returned to the investors. Therefore, when the fund exit period Option to gradually sell the fund's holdings (including stakes in publicly traded companies). It should be a normal behavior for Sequoia to reduce its shareholding in the above-mentioned companies. Wang Jiyue, a senior investment banker, also told Sino-Singapore Jingwei that such exits are normal operations, and there is no need to think too much.
Sino-Singapore Jingwei combing found that Sequoia China's reduction of equity stakes in companies such as Meituan and Pinduoduo has continued for several years, and it is not a short-term behavior.
However, it should also be noted that, in terms of the frequency of reduction, Sequoia's reduction in Meituan will accelerate in 2021 and 2022.
He Shixiang said that when an institution chooses to reduce its holdings, it will comprehensively consider multiple factors such as the investment period, the future development of the listed company in which it has invested, and the reduction price. Due to various factors, this time point is not so easy to grasp.”
As for whether the withdrawal of well-known shareholders will have an impact on the stock price of listed companies, Wang Jiyue believes that the orderly reduction will have no substantial impact on the stock price.
Sequoia is still quite powerful in promoting the company to become bigger and stronger.
According to media statistics, in 2021, a total of 24 invested companies in Sequoia have successfully IPOs, second only to Hillhouse in number.
On the track, Sequoia pays more and more attention to the biomedical field, and a total of 8 companies have successfully listed.
(Sino-Singapore Jingwei APP)
(The opinions in this article are for reference only and do not constitute investment advice. Investment is risky, and you need to be cautious when entering the market.)
All rights reserved by Sino-Singapore Jingwei. Without written authorization, no unit or individual may reproduce, extract or use in other ways.