The capture of nearly 40 companies in the past two years not only demonstrates Hubble's ability to invest, but also brings suspicion of "impure". But a certain signal is that a new investment system born out of a large company is taking shape, starting with semiconductors.
It is hard to imagine that in a relatively vertical field, a newly established investment institution has captured nearly 40 companies in just two years.
According to relevant data from the company, Hubble Investment, a subsidiary of Huawei, which was established in April 2019, has invested in 37 companies (40 in some statistics). In some statistics, there are only 18 PE/VCs with more than 50 investment events in 2020. For example, IDG Capital, a top-tier institution, ranks 16th with 66 transactions. Someone joked that Hubble's initial up-and-coming investment "comparable to first-line PE/VC investment capacity."
In terms of return on investment, Hubble's investment has also gained a lot.
In May 2019, the original shareholders of the integrated circuit design company Seripu and Hubble Investment signed the "Investment Agreement". The latter subscribed for a total of 72 million yuan at a unit price of 32.13 yuan per share. Immediately afterwards, in December 2019, Sri Lanka completed the third share transfer and the third capital increase, and Hubble Investment's shareholding reached 4.799 million shares. In September 2020, Seripu officially landed on the Sci-tech Innovation Board. As of the lunch break on July 9, the share price of Seripu exceeded 628 yuan, and the total market value exceeded 50 billion yuan. According to this calculation, the current Hubble investment has exceeded 30 billion yuan. Double the return, reaching more than 2 billion yuan.
For Huawei, which has an annual profit of 64.6 billion yuan, 2 billion yuan may seem like a drop in the bucket, but the return on a single investment project cannot be underestimated. In addition, on Hubble’s long investment list, Suzhou Changguang Huaxin Broadcasting Technology Co., Ltd. and Jiangsu Canqin Technology Co., Ltd. have all been accepted for listing on the Shanghai Stock Exchange.
To a large extent, Hubble's multi-standard and fast pace stems from the development of the entire chip industry.
In 2018, a little-known CMOS image sensor chip supplier was placed in front of Lenovo Ventures partner Wang Guangxi. At that time, the main line of chip investment was still on the low-end, and Wang Guangxi had only a vague concept-"I want to invest some Chips related to innovation". Two years later, the company called Siteway "successfully" made its debut. In August 2020, Hubble invested in capital, and then the National Integrated Circuit Industry Investment Fund also came, rolling three rounds in just two months.
According to the "Interpretation of China's Semiconductor Industry Investment in 2020", 2020 has become the year with the largest amount of investment in the history of China's semiconductor primary market, with an investment amount of more than 140 billion yuan, an increase of nearly four times compared to 2019. Hot money continues to flow to entrepreneurs, and the number of companies has risen. As of September 1, 2020, the number of domestic semiconductor companies has exceeded 50,000.
But while reaping returns repeatedly, Hubble's investment is also quite controversial. Some people call it extremely strong when it comes to investing in startups. In addition, the original expectation of the layout of the chip industry is also considered a bit "changed."
An investor felt that Huawei’s current investment thinking has changed somewhat from the original one: “For example, Xiaomi’s investment strategy is to position itself as a financial investor with strategic resources to support it, but Hubble Investment is directly under Huawei, which is somewhat different. It makes people unable to understand whether it is for the industry or for the financial return."
On May 31, 2021, Hubble Investment had another industrial and commercial change, and the company's registered capital increased from 2.7 billion yuan to 3 billion yuan, an increase of 11.11%. This investment institution, which is 100% owned by Huawei Investment Holding Co., Ltd. and named after the first giant space telescope in the United States, has its registered capital changed from the initial 700 million yuan to 3 billion yuan in three times.
Which companies does Huawei Hubble invest in?
In the context of chip supply cuts, the process of domestic chips is accelerating day by day. The establishment of Hubble Investment is burdened by the outside world's expectations for Huawei's breakthrough in the chip industry.
Up to now, Hubble has invested in multiple subdivisions such as semiconductor materials, radio frequency chips, EDA (electronic design automation), testing, and CIS image sensors. In terms of chips only, according to the company's data, Hubble Investment has deployed several companies such as Siteway, Jiehuate Microelectronics, Yutai Microelectronics, Kunyou Optoelectronics, Haoda Electronics, Qinghong Electronics, etc., involving security and defense Chips, radio frequency chips, optical chips, analog chips, memory chips, etc.
From the perspective of the industry chain, Hubble has invested in the latest investment in lithography machine light source supplier Keyi Hongyuan, integrated circuit wafer test probe card supplier Qiangyi Semiconductor, etc., in the field of EDA card neck, invested in Jiutongfang Micro Electronics, Wuxi Feipu Electronics, Lixin Software, Yundao Intelligent Manufacturing and other enterprises.
In preliminary statistics, Hubble's investment activities have been closely centered on the semiconductor industry. An investor who has seen a joint project with Hubble Investment said: "There are many types of chips. We have counted nearly a thousand types of chips. Huawei basically lays out some chips around its main business, including radio frequency, 5G and Some optical communications, because Huawei Cloud needs optical communications-related chips."
But this correlation does not mean that Hubble Investments has given up financial returns.
The dynamic balance between finance and industry support seems somewhat difficult to maintain. Industry insiders close to Huawei once commented on the AI Finance Agency’s evaluation of Hubble’s investment positioning “can be understood as making money plus industry, two-wheel drive.”
On the one hand, the choice of investment companies has made Hubble Investment quite criticized; on the other hand, it is the "delicate relationship" with the invested companies.
In April 2020, on the eve of Canqin Technology's sprint for the Sci-tech Innovation Board, Hubble Investment signed the "Jiangsu Canqin Technology Co., Ltd. Investment Agreement" with all shareholders of the company, agreeing to transfer 110 million yuan to the company’s controlling shareholder, Canqin Management. Some 13.75 million shares. After the equity transfer is completed, Hubble Investment holds 4.58% of Canqin Technology, and Canqin Management holds 49.14% of Canqin Technology.
To some extent, the role Hubble is trying to play is indeed difficult to discern.
Hubble's most recent investment occurred in early June when it took a stake in the lithography machine manufacturer Keyi Hongyuan. Keyi Hongyuan was jointly funded and established by the Institute of Microelectronics of the Chinese Academy of Sciences, Yizhuang State Investment, and National Science and Technology Instruments. It is the only domestic and the third company in the world with 193nm ArF excimer laser technology research and commercialization. It is also a domestic lithography company. The light source system supplier of Shanghai Microelectronics. From this point of view, in the pursuit of rapid financial returns, it is difficult to say that Hubble is no longer involved in the key links of the semiconductor industry chain.
In this mighty historical process of chip replacement, the means and methods are uncertain, and Hubble may be controversial. But a certain signal is that a new investment system born out of a large company is taking shape, starting with semiconductors.