A growing number of listed companies are leveraging the "industry plus capital" model to incubate cutting-edge projects externally, fill gaps in their industrial chains, and reserve acquisition targets. This approach aims to uncover medium-to-long-term growth potential and build a second growth curve for the enterprise.

Data from Tonghuashun shows that so far this year, 140 industrial buyout funds invested in by 135 listed companies have been established. A review of company announcements by this reporter reveals that securing long-term, stable investment returns and strengthening the industrial chain are the two core drivers behind this trend.

Some companies view these industrial buyout funds as vehicles for stable equity investments. Multiple firms have disclosed that they participate in fund investments while strictly controlling risk, relying on the investment research and management capabilities of professional institutions to conduct equity investments and earn medium-to-long-term returns. Regarding operational impact, these announcements note that fund investments do not conflict with their core businesses or create competition issues. All external capital contributions use idle self-owned funds and will not squeeze daily operating cash flow. Normal production and operations remain undisturbed, and external investments are not expected to have a major negative impact on current financial or operational conditions, nor harm the interests of the company or its shareholders.

For many other companies, the primary goal of establishing funds is to improve the industrial chain and incubate cutting-edge technologies. Announcements indicate that several firms hope to use industrial buyout funds to fully realize the mutual benefits of industry and capital. This allows them to move beyond internal R&D and acquisitions, position themselves in advanced technology fields early, and precisely fill gaps in upstream and downstream supply chains. Chen Jingjing, General Manager of Hebei Huanbo Technology Co., Ltd., told this reporter: "Listed companies set up industrial funds and target new sectors as a result of industry upgrades, optimized M&A policies, primary market exit needs, and the search for a second growth curve. Compared to direct acquisitions, industrial funds enable strategic investments, industrial incubation, and future M&A reserves at a lower cost, achieving chain improvements and coordinated development."

"Going forward, companies operating industrial funds should focus on their core businesses, clearly define boundaries between strategic and financial investments, strengthen due diligence and post-investment support, and strictly control risks like high valuations, high goodwill, and high leverage. They must manage risk isolation and related-party transactions properly, and plan diversified exit mechanisms such as M&A, equity transfers, buybacks, or IPOs in advance to avoid long-term capital lock-up and truly align industry with capital," Chen added.

Unlike directly acquiring mature enterprises, the fund incubation model offers clear buffer advantages. Listed companies act as the priority commercialization partner for fund projects, tracking and nurturing them throughout their development. Once a project's technology matures and its business model is validated, high-quality assets can be selectively integrated into the company. This approach avoids the goodwill pressure from one-off large-scale acquisitions while continuously building a pipeline of quality M&A targets and exploring new business avenues.

Industrial buyout funds span multiple fields including entity operations, private investments, and capital markets, imposing strict compliance requirements for information disclosure, internal decision-making, fund management, and related-party transactions. Wang Zhibin, a securities litigation lawyer at Shanghai Minglun Law Firm, told this reporter: "When participating in industrial investment funds, listed companies must strictly follow internal decision-making procedures, ensuring shareholder meetings, board meetings, and independent director reviews are conducted. Clear boundaries should be set for subject entities with proper risk isolation. Routine and comprehensive information disclosure is required, including timely updates on capital contributions, investment targets, fair pricing, and exit arrangements. Written agreements must define exit plans, post-investment oversight clauses, and stop-loss mechanisms. Companies must also strictly control the use of raised funds or working capital for unauthorized investments, upholding a compliance red line for funds."