Sunshine Ronghui Capital: Ten years of honing a sword, neither arrogant nor fearful.

There is no shortcut in investment. Only patience and persistence can lead to a long-term success.

In 2015, the first batch of insurance private equity fund managers was established. In the primary market, insurance private equity fund managers have become a unique existence due to their unique capital attributes, strict supervision, differentiated competitive advantages, and close connection with the national strategy.

In this issue, we have invited Mr. Shi Shenghao, the managing partner of Sunshine Convergence Capital, one of the first batch of insurance private equity fund managers, to talk about Sunshine Convergence Capital.

Sunshine Convergence Capital was established in January 2015. It is one of the first batch of insurance private equity fund managers approved by the China Banking and Insurance Regulatory Commission (now the "National Financial Regulatory Administration"). The fund management scale has reached 30 billion yuan, and it has invested in more than 100 enterprises. Among the long investment list, there are many star projects such as Mindray Medical, Yuyue Medical, Genor Biopharma, Tongyuankang Pharma, SenseTime, Moore Threads, Enflame Technology, and Innovation Works.

It is worth mentioning that 90% of the invested enterprises of Sunshine Convergence Capital have achieved IPO or a new round of financing, and more than 60% of the projects have successfully exited.

Accumulating Strength: Don't listen to the sound of the wind and rain through the forest. Why not sing and whistle while walking slowly?

2019 can be said to be a watershed for the Chinese venture capital industry.

At that time, significant changes were taking place in the international and domestic environment. Domestically, the policy side began to actively encourage the development of science and technology innovation concepts and "high-precision, specialized, and new" enterprises, thereby promoting the emergence and growth of high-quality projects that solve key technical problems. At the same time, on the capital side, the launch of the Science and Technology Innovation Board and the registration system of the ChiNext Board, as well as the implementation of the new regulations of the Hong Kong Stock Exchange's Rule 18A, have enabled high-tech enterprises to exit earlier and obtain financing for listing more smoothly. Since then, VC/PE investment in hardcore science and technology innovation enterprises has become a new trend.

"Before 2019, Sunshine Convergence Capital mainly focused on PE project investments, and typical projects at that time included Mindray Medical and SenseTime," Shi Shenghao told 36Kr. "Around 2019, in order to adapt to the changes in policies, the market, and our own development needs, the types of investment projects we started to prefer became more inclined towards innovative projects, and the investment stages also shifted towards enterprises in the growth stage."

However, the transition is not easy. This is because in the venture capital industry, the investment logic of mid-to-late-stage projects and early-stage projects is very different, and therefore the requirements for institutional capabilities are also very different.

Accumulating strength, the key word is "accumulation". One should have a broad vision and accumulate strength and deepen understanding to lay a solid foundation for future actions. "In-depth industry research was the unanimous decision of the team at that time," Shi Shenghao mentioned. "We used solid industry research to counter intuitive judgments and create a longer-term investment layout through leading industry research."

"During that period, the team was very busy every day. Apart from investment work, they were constantly conducting industry research, and there was continuous thinking and review within Sunshine Convergence Capital," Shi Shenghao said. "Sowing and harvesting are never in the same season, and there is a period in between called 'persistence'. This is the law of nature, and the same is true for the investment industry. Whether many things are done right or wrong will only gradually become apparent after a long time. Many times, the development path of things is like an exponential function. The initial investment may not have obvious effects, but after continuous investment, an exponential explosion will occur."

Moore Threads, as a new enterprise established in October 2020, Sunshine Convergence Capital completed the investment only three months after its establishment. Behind this is a concrete manifestation of a precise attack driven by industry research, After the investment was completed, Moore Threads subsequently completed multiple rounds of financing, demonstrating the unique vision of Sunshine Convergence Capital.

Walking Together: With a bamboo stick and straw sandals, I feel lighter than a horse. Wearing a straw cape, I brave the wind and rain in my life.

Business is from 1 to 10, while technology is from 0 to 1. If being able to detect industrial opportunities early and accurately capture good projects is a capability, then using experience to provide pre-investment sorting and post-investment empowerment, and accompanying enterprises to achieve key development nodes is an even greater advantage.

"We always believe in the huge potential of China's industrial upgrading, the long-term value of technology-driven innovation, and the unyielding spirit of Chinese entrepreneurs. We also always believe that only those who have reached the summit can lead those who are still climbing to find the right direction," Shi Shenghao told 36Kr.

Sunshine Convergence Capital utilizes its own resources in the medical and technology industries to provide services in financing, business, company management, sales and promotion, etc. for the invested projects and reserve projects, accompanying the enterprises from 0 to 1 in their growth and helping them develop faster and better from 1 to 10.

In 2021, Sunshine Convergence Capital invested in ShuoCheng Technology, the first high-tech enterprise in the domestic industrial field that combines AI, machine learning, and equipment noise analysis. In the subsequent accompaniment of the project, Sunshine Convergence Capital introduced the enterprise's fully-perceptive and multi-dimensional intelligent operation and maintenance products to provide characteristic risk management services for large manufacturing enterprises insured by Sunshine Property & Casualty Insurance, the backer of the enterprise, improving the willingness of customers to insure and the renewal stickiness.

Of course, behind this, excellent products are the key. "The products of ShuoCheng Technology can accurately identify the faults of the production equipment of large manufacturing enterprises, avoiding the entire production line from stopping due to faults or personal and equipment accidents, reducing the accident rate and the compensation amount, and effectively controlling the losses caused by production interruptions," Shi Shenghao pointed out.

Providing enterprises with appropriate cognitive and experience guidance, connecting various resources, thereby helping enterprises avoid detours in the development process; on this basis, promoting synergy between LPs and invested enterprises' businesses, or actively helping the local industrial development to ensure the landing of high-quality projects, Sunshine Convergence Capital has achieved a win-win situation for the three parties, truly achieving 1 + 1 + 1 > 3. Shi Shenghao pointed out in detail.

Deep and Calm: The chilly spring breeze wakes me up from my drunkenness, and the slanting sunlight on the mountain peak greets me.

Inside Sunshine Convergence Capital, the two concepts of patient capital and sustainable operation have been repeatedly mentioned. On the one hand, as an insurance private equity manager, how to achieve sustainable operation at the management institution level, how to give LPs sufficient sense of security, and how to give invested enterprises sufficient patience; on the other hand, at the investment level, how to quickly identify enterprises with the characteristics of sustainable operation, and how to patiently help invested enterprises achieve sustainable operation.

"Over the past ten years, we have established a very solid company management system. Our investment business system, risk control system, and training system are very complete. Once new employees join the company, these accumulations immediately become their weapons. The management attaches great importance to the reuse and inheritance of experience and has been committed to presenting everything we have experienced to all young employees in a concrete form. The foundation of sustainable operation is inheritance, and inheritance is the continuation of the enterprise's history." Mr. Shi Shenghao said.

To achieve a breakthrough in key technologies, one cannot do without the persistent research of "sitting on the bench for ten years in the cold". To develop a new quality productive force, one must go through the difficult process of transforming and upgrading traditional industries and cultivating and strengthening emerging industries. Mr. Shi Shenghao said: "Everything has always been valuable for its perseverance. Sunshine Convergence Capital has always firmly sought to work with founders who have the concept of sustainable operation. The soul of sustainable operation is innovation, and innovation is the driving force for enterprise development."

Looking back at the places where I have been, there is neither wind nor rain nor sunshine.

This year marks the tenth anniversary of the establishment of Sunshine Convergence Capital. There is no shortcut in investment. Sunshine Convergence Capital has been continuously accumulating "new" kinetic energy and cultivating the "quality" soil on the path forward. Ten years of sharpening a sword, neither arrogant nor fearful.

This article is from the WeChat public account "36Kr", and 36Kr is authorized to publish it.