A bumper year for IPOs, yet investors are still gripped by anxiety.

"The boom in the venture capital and investment market this year is obvious to all - there is a strong consensus, the competition in the sectors is fierce, and the anxiety is profound. The market has recovered faster than expected. In just a few months, we have witnessed a series of IPOs worth hundreds of billions of yuan ringing the bell, and the industry has welcomed a long - awaited upsurge." Ni Zhengdong, the founder and chairman of Zero2IPO Group, summarized the common feelings of current investors in a recent public speech.

According to the data statistics of Zero2IPO Research Center, the fundraising amount in the first quarter of this year increased by more than 80%, and the investment amount in the second quarter is also expected to surge. It is estimated that the exit data for the whole year will increase by 100% to 200% compared with last year. Despite the prosperity, investors are more anxious.

Many interviewed investors believe that, on the one hand, hard - tech companies are highly sought after in the capital market, and they are entering the golden period of IPO exits; on the other hand, from the upgraded supervision of private equity institutions to the tightened approval of red - chip structures, the policy side is reshaping the ecological pattern of the primary market.

Hard - tech Becomes the Main Theme of IPO Exits, and Red - Chip Structures Lose Favor

Xia Fang, a partner of Futeng Capital, pointed out that a consensus has been reached in the market. Combining policy signals such as the "2026 Government Work Report", the expansion of the scope of application of the fifth listing standard on the Science and Technology Innovation Board, and the addition of the fourth listing standard on the Growth Enterprise Market, cutting - edge technology fields such as AI models and computing power, semiconductors, commercial space, and low - altitude economy are entering the most suitable period for IPO exits.

Xu Cheng, the deputy director of the Executive Committee of Orient Securities Capital, also expressed a similar view. He believes that last year was a big year for IPOs, and most institutions had projects going public. Currently, the focus of the capital market is clear - the hard - tech industry, especially the "chokepoint" sectors. In addition, the recently issued Document No. 54 of the General Office of the State Council (i.e., the "Opinions of the General Office of the State Council on Strengthening Supervision, Preventing Risks, and Promoting the High - Quality Development of Private Equity Investment Funds") has implemented stricter regulatory agreements at the fundraising end, which has also become an important policy variable affecting future IPO exits.

Regarding Document No. 54 of the General Office of the State Council mentioned by Xu Cheng, Zhu Zhitong, a senior partner of Haotian Law Firm, conducted an in - depth legal interpretation. He believes that Document No. 54 marks that the private equity investment industry has entered a new stage of "administrative supervision as the mainstay and self - regulatory supervision as the supplement", and in the future, the main regulatory responsibilities will belong to the Financial Regulatory Administration and the China Securities Regulatory Commission.

Zhu Zhitong emphasized the four core changes brought about by Document No. 54. He mentioned that the orientation of "supporting the excellent and restricting the inferior" is clear. For leading funds that invest in early - stage, small - scale, long - term, and hard - tech projects, product filing will be faster and smoother; while the product filing time window for problem funds will be significantly extended.

In addition to the regulatory changes in the domestic market, the path for enterprises to list overseas has also changed significantly. According to Zhu Zhitong's observation, the Hong Kong capital market performed brilliantly last year, and red - chip structure companies accounted for a large proportion. However, the regulatory orientation of the China Securities Regulatory Commission has clearly changed in the first half of this year.

Data shows that the overseas listing filing period for companies with VIE structures is extremely long, averaging about 402 days; while for companies directly issuing H - shares with domestic entities, the filing only takes about 120 days. This huge difference in approval efficiency has directly led many enterprises in the market that have established VIE structures and received US - dollar funds to dismantle the structures and return to the domestic market.

Zhu Zhitong said that the regulatory authorities clearly distinguish whether the listing entity is located in the Cayman Islands or in China. The current orientation is very clear - enterprises are encouraged to place their listing entities in the domestic market and directly issue H - shares.

Mergers and Acquisitions, S - Funds, etc. Move from "Alternatives" to the "Main Stage"

Amid the hard - tech IPO feast, data shows that in 2025, the hard - tech sector accounted for more than 60% of the investment and financing activities in China's primary market for the first time. This means that among the tens of thousands of invested projects in the future, only a few hundred will have the opportunity to exit through IPOs.

In the context of the changing capital market cycle and profound policy changes, the "raising, investing, managing, and exiting" of the private equity investment industry will also welcome a new pattern. The exit model that has highly relied on a single IPO channel in the past is being reshaped, and diversified exit paths such as mergers and acquisitions and S - funds are gradually moving from "alternatives" to the "main stage".

In the past year, with the implementation of policies such as the "Six Measures for Mergers and Acquisitions", mergers and acquisitions have ushered in a historic opportunity. However, Dou Yong, a partner of Fortune Capital, pointed out from personal experience that mergers and acquisitions are not easy. In 2024, Fortune Capital's mergers and acquisitions team participated in 183 matchmaking meetings but achieved nothing; it was not until 2025 that the team was expanded and resources were integrated from multiple parties that 5 asset deals were completed for industrial integration with listed companies; in the first half of 2026, a mergers and acquisitions fund was established, and 3 deals were completed in half a year.

Dou Yong believes that behind this, in addition to the team's efforts, it also benefits from the policy support. The current regulatory system shows three trends: first, it encourages substantial improvement of the quality of listed companies, and arbitrage - type mergers and acquisitions are difficult; second, it allows for the design of transaction structures such as differential pricing in the field of new - quality productivity to resolve the pain points of goodwill valuation; third, it encourages innovative transaction structures, but the core lies in "the integration of the cultures of the chairmen of the two enterprises". If the two parties cannot see eye to eye, even a valuation difference of only one million yuan will make the deal difficult to close.

Yu Tong, the general manager of Yicun Capital, also deeply felt the difference in this wave of mergers and acquisitions. She pointed out that this wave of mergers and acquisitions is characterized by "policy - driven" and highly focused on new - quality productivity, especially in the field of intelligent manufacturing. Different from the scattered - theme mergers and acquisitions in 2015 - 2016, listed companies are now more prudent, cross - border mergers and acquisitions have decreased, and they pay more attention to the collaborative reshaping of the upstream and downstream of the industrial chain.

At the same time, Yu Tong observed that the participants and strategies in mergers and acquisitions are becoming more diverse: local governments, CVCs, insurance funds, etc. have entered the market to form a new "mergers and acquisitions investment promotion" model; the strategy of acquiring control rights and then conducting Add - on asset integration has become common. Taking Yicun Capital as an example, she emphasized that mergers and acquisitions do not mean a long - term wait - last year, selling Source Photonics to Dongshan Precision achieved a good cash - flow return, and participating in the asset restructuring of Ribo Fashion is expected to achieve considerable returns within a year.

When the IPO and mergers and acquisitions channels are gradually unblocked, does the S - fund still have a place? Xia Fang of Futeng Capital gave an affirmative answer. She pointed out that in the past decade, China's S - funds started from accounting for about 1% of the private equity market and are steadily approaching the 10% - 15% proportion in the US market. In the future, they will become an indispensable part of the exit methods.

The current S - market is facing multiple opportunities: the huge stock of assets worth over 10 trillion yuan and the concentrated maturity of funds established during the peak period from 2018 to 2021 have brought great exit pressure; the buyer group has expanded from mainly overseas institutions in the early stage to diversified domestic capital forces such as insurance companies, AMCs, and bank wealth management subsidiaries; the top - level policies are constantly favorable; and the transaction structure has evolved from simple share transfers to complex GP - led transactions. At the end of 2025, Shanghai completed the first domestic GP - led S - type transaction on the exchange, which is a sign of the market's maturity.

However, challenges still coexist. Xia Fang said bluntly: "First, there is still a gap in the valuation and pricing system. Domestic sellers often expect a large discount, and there is a difference in the psychological prices of buyers and sellers; second, there is an obvious divergence. The shares of leading GPs are in high demand, while the shares of mid - tier funds are less popular; third, the underlying assets ultimately still need to rely on diversified exit channels, and S - funds themselves also face the problem of exiting upon maturity."

"Exiting - Oriented Investment": Seek IPOs for Disruptive Technologies, Look at Mergers and Acquisitions for Niche Sectors

Facing emerging future industries such as commercial space, low - altitude economy, quantum computing, and controllable nuclear fusion, how should investment institutions plan their exit paths?

Yu Tong of Yicun Capital proposed the core strategy of "exiting - oriented investment" and established two completely independent teams internally: the early - and mid - stage team focuses on technology - disruptive fields such as AI world models, optical chips, and silicon photonics. These enterprises are more likely to take the IPO path; while the mergers and acquisitions team focuses on the large field of intelligent manufacturing, such as semiconductor equipment, new materials, miniature bearings, and automotive sensors. She emphasized that the targets for mergers and acquisitions do not require technological disruption, but they need to have unique processes, stable cash flows, and a gross profit margin of over 20% to avoid fierce competition.

Dou Yong of Fortune Capital showed a more calm investment philosophy: "Invest in places where few people go and exit when the market is booming." He admitted that the biggest source of income for domestic funds is still IPOs. If you think about exiting through mergers and acquisitions from the first day of investment, the fund's return will definitely not be high. For long - term future industries such as quantum computing and controllable nuclear fusion, if they cannot achieve an IPO, it will be extremely difficult to realize value through mergers and acquisitions under the current primary - market valuation system, which requires greater - level institutional innovation. Facing the current AI boom, he prefers to think calmly: "When the market is booming, we all wonder: when the tide recedes, who will be left on the beach?"

This article is from the WeChat official account "China Fund News" (ID: chinafundnews). Author: Mo Lin. Republished by 36Kr with authorization.