Core Insights - The article discusses a shift in investment focus towards late-stage projects, particularly in the consumer sector, driven by the impressive performance of companies like Bubble Mart and others in the Hong Kong IPO market [1][10][11] - There is a growing interest in the "IP economy" and collectible toy projects, as they offer high margins and strong cash flow, appealing to late-stage investors seeking stability [2][3] - The investment landscape is evolving, with a notable shift from early-stage investments to more mature, revenue-generating projects due to the challenges faced in early-stage financing [3][6] Investment Trends - The Hong Kong IPO market has seen a significant increase in fundraising, with over 760 billion HKD raised since 2025, marking a sevenfold increase compared to the previous year [1][10] - Consumer companies are leading the charge in IPOs, with a 71% year-on-year increase in the number of consumer IPOs and total fundraising exceeding 20 billion HKD [10] - The average price-to-earnings (P/E) ratio for consumer stocks in Hong Kong has surged from 15 to 40 times, indicating a revaluation of consumer brands [10][11] Investment Strategy Adjustments - Investors are increasingly cautious about early-stage projects due to long R&D cycles and valuation bubbles, prompting a shift towards late-stage investments with stable revenue [3][6] - The average exit period for early-stage projects has extended from 5 to 8 years, while late-stage projects offer more stable internal rates of return (IRR) through mechanisms like preferred liquidation rights [8] - The current investment strategy emphasizes the importance of cash reserves and financial health, particularly in a cooling market environment [7][8] Market Dynamics - The article highlights a resurgence in the IPO market, particularly for consumer companies, which is expected to drive further interest in late-stage investments [10][11] - The trend of investing in late-stage projects is supported by a more rational valuation environment following the previous market bubble, with a focus on companies that can achieve quick listings [11] - The regulatory environment is also becoming more favorable, with measures introduced to ease liquidity pressures for private equity funds [11] Conclusion - The investment landscape is characterized by a dual approach, with firms pursuing both early and late-stage opportunities, reflecting a strategic balance in response to market conditions [13]

Core Viewpoint - The perception of Pre-IPO projects as highly desirable investments has shifted, with significant valuation declines observed following regulatory changes and market conditions [2][3]. Group 1: Valuation Changes - A specific Pre-IPO project saw its valuation drop from 60 billion to under 9 billion, representing an 85% decrease after the Shenzhen Stock Exchange halted its IPO review [2]. - The phenomenon of valuation inversion is common, where the latest financing round's valuation is lower than previous rounds or the expected IPO valuation [2][3]. Group 2: Causes of Valuation Inversion - Market environment changes, including macroeconomic fluctuations and industry competition, impact investor expectations and lower valuations [3]. - Internal issues within Pre-IPO companies, such as inadequate profitability and unstable management teams, contribute to decreased investor confidence and valuation [3]. - Stricter IPO review standards by regulatory bodies increase uncertainty for Pre-IPO projects, further affecting their valuations [3]. Group 3: Investment Caution - Investors must conduct thorough research on the fundamentals of Pre-IPO companies, including business models, core competencies, financial health, and market prospects, rather than being swayed by high valuations and IPO expectations [3]. - Consideration of market and policy changes is essential for assessing potential impacts on company valuations, necessitating effective risk assessment and mitigation strategies [3].