MoneyTree™ China TMT Report - Q1/Q2 2015

In the first half (H1) of 2015, the Telecommunications, Media and Technology (TMT) industry in China continued the strong momentum seen in the second half (H2) of 2014. In fact, investments in TMT companies in H1 2015 were almost the same as the full-year total of 2014, and the number of investments increased by 44% compared to H2 2014. As the hot spot of all industries, and under the impact of wealth effect brought about by booming stock markets and the New Third Board, TMT industry investments reached their highest level since 2012 in both deal value and deal volume.

In Q1 2015, TMT deal value increased by 61% to US$7.58 billion, and the deal volume increased from 371 deals in Q4 2014 to 635 deals in Q1 2015, up 71%. Both the deal value and volume reached a new high since 2012. The average single deal value in the TMT industry was US$18.08 million, up 19% compared to Q1 2014.  

In Q2, the deal volume in the TMT industry was 491 deals. Despite a slight decrease in deal volume, the deal value and average single deal value still increased significantly to US$7.98 billion and US$20.26 million, respectively. Both overall PE/VC investment and TMT industry investment in H1 2015 were at a high level and continued the strong momentum of 2014.

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Investment enthusiasm was extremely high in H1 2015. As a hot spot for investment and under the impact of the wealth effect brought about by booming stock markets and the New Third Board, TMT industry investments reached their highest point since 2012 in both deal value and deal volume. In Q1, the deal value and volume in the TMT industry accounted for 90% and 70% of the total, respectively; in Q2, the proportions declined to 47% and 30% respectively. This was mainly due to the significant increase in Medical and Finance industry. 

In H1 2015, the high-speed development trends in the Chinese IT industry and Internet companies from 2014 continued, and the overall TMT investment increased rapidly, with the deal volume and value reaching the highest figure since 2012. It was also noted that there were three deals with single deal value exceeding US$1 billion in the Technology and Entertainment and Media sectors. From the point of PE/VC, the TMT industry will continue to be a hot spot. 

In Q1 2015, TMT investments were mostly concentrated in the Semiconductor, e-commerce and network marketing subsectors, while radio & television and digital television took over first place in Q2. There were 32 TMT deals with a single deal value of over US$100 million in H1 2015. In fact, the average single deal value in H1 2015 increased by 31% compared with H2 2014.

Being a new bright spot in H1 2015, Mobile Social Media was one of the major trends for Internet development. Mobile Social Media might further integrate with Mobile Advertising and Mobile Entertainment to become more than an information communication platform. We are looking forward to the sharp increase in the deal value and volume of Mobile Social Media in the future.