The national team invests 120 billion yuan in a "big red envelope" for venture capital! Is spring coming for A-shares?

The state has taken the lead in establishing three "giant" venture capital funds, targeting the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Guangdong-Hong Kong-Macao Greater Bay Area, with a total amount exceeding 120 billion yuan! This is a key step for the "aircraft carrier-level" venture capital guiding fund previously announced by the National Development and Reform Commission.

What is this money for? How significant is it?

In simple terms, this 120 billion yuan is the real money from the "national team," but its goal is not just to make a profit for itself. The core task can be summarized in eight words: invest early, invest small, invest long-term, and invest in hard technology! It can be understood as venture capital.

"Invest early and invest small": specifically supports those technology seedlings that are still in the seed phase and startup phase. These companies often have the most innovative vitality but also find it most difficult to raise funds, bearing the highest risks that ordinary capital dares not touch. The national team's intervention is like providing timely assistance to these future "unicorns."

"Invest long-term": these funds are set for 20 years! This is crucial. Technological innovation does not happen overnight; it requires time to settle. A "patient capital" of 20 years means tolerating failures and accompanying companies to truly grow, rather than pursuing short-term quick profits.

"Invest in hard technology": the focus is very clear—semiconductors, artificial intelligence, biomedicine, new energy, new materials, and high-end manufacturing, which are key technology areas or represent future directions. It aims to solve critical technologies and cultivate strategic emerging industries and future industries.

"Guiding and driving": this 120 billion yuan is just a "catalyst"! The goal is to leverage local state-owned capital and social capital (such as insurance, banks, and private investment) to raise nearly 1 trillion yuan in co-investment! Imagine the significant revitalization this will bring to the entire venture capital market? It is equivalent to injecting super fuel into the source of China's technological innovation.

What impact will it have on A-shares?

Will it directly, immediately, and instantly cause all A-shares to surge? Not quite. Because this money is mainly invested in unlisted startups (primary market). However, its impact is profound and structural:

Nurturing A-share "seedlings": the cradle for future quality listed companies! Today’s "seedlings" nurtured by these national team funds may very well become the "tall trees" that land on the Science and Technology Innovation Board, the Growth Enterprise Market, or even the main board 5 or 10 years from now. Think about it, more "hard technology" companies that master core technologies listing on the A-shares in the future could enhance the overall quality and attractiveness of the market. This is definitely a boon for A-shares in the long term.

Boosting confidence in the "hard technology" sector: This news itself is a strong policy signal: the state is unwaveringly supporting technological innovation. This will greatly boost market confidence in the future prospects of hard technology industries such as semiconductors, AI, biomedicine, and high-end manufacturing. Although the funds have not yet been invested, market sentiment may react in advance, and related sectors (such as the Science and Technology Innovation 50 and the Growth Enterprise Index) may see a boost in sentiment.

Focusing on the "LP concept" and regional leaders: Looking at the list of sponsors (LP) for these funds is quite interesting:

Yangtze River Delta Fund: National Venture Capital Guiding Fund, State Investment Corporation, Anhui Conch Group, Shanghai Guosheng/State Investment, Zhejiang (Hangzhou High Investment, Ningbo Jin Investment), Jiangsu (Suzhou Guofang), and other levels of state-owned capital. Conch Group (the parent company of Conch Cement) participates in funding as a listed company, which is worth noting.

Guangdong-Hong Kong-Macao Fund: National Venture Capital Guiding Fund, Shenzhen Innovation Investment (Shenzhen Innovation Investment system), China Resources system, Guangdong Provincial War New Guiding Fund, and state-owned capital from Shenzhen/Jiangmen/Dongguan/Zhuhai. Shenzhen Innovation Investment (and its affiliates) is a top venture capital in China, and China Resources is a diversified central enterprise giant. Their deep involvement shows their strategic layout.

These listed companies (such as Conch Cement) or large group-affiliated listed companies that participate in funding may attract market attention for their potential future returns as LPs (although long-term) as well as the synergy of their industrial layout with the fund's direction. At the same time, the technology industrial ecosystem and leading enterprises in the Yangtze River Delta and Guangdong-Hong Kong-Macao regions, which are the fund's key focus, may also benefit indirectly from the overall improvement of the investment environment.

Venture capital concept stocks may become active: Institutions participating in fund management (such as the State Investment Corporation in the Yangtze River Delta and Shenzhen Ruin State Innovation in Guangdong-Hong Kong-Macao) or well-known market venture capital institutions that may become fund partners (although no clear secondary market targets are currently identified), their related concept stocks may attract market attention in the short term.

To summarize: The establishment of these three major funds with 120 billion yuan is the state’s "first move" and "pill of reassurance" in the field of technological innovation. It targets the future competitiveness of the Chinese economy (hard technology) and addresses the core pain point of financing difficulties for startups (patient capital).

For A-shares:

Short term: Positive sentiment, especially for the hard technology sector (semiconductors, AI, biomedicine, high-end equipment, etc.) and large LPs (such as Conch) and regional (Yangtze River Delta, Guangdong-Hong Kong-Macao) related concepts may attract attention.

Medium to long term: Cultivating and supplying more high-quality "hard technology" listed resources to A-shares and optimizing market structure is a significant institutional benefit. It is genuinely working to provide "source water" for A-shares.

Of course, investment ultimately depends on the fundamentals of the company. This news brings confidence and future possibilities, but the development of specific companies still relies on their own strength. But for friends who are optimistic about China's technological innovation and the long-term development of A-shares, this is definitely a major move worth applauding! The national team's operation has opened up the landscape!