Zhejiang NHU Company has the intention to join hands with NewMargin Ventures to jointly initiate a venture capital fund, with its temporary name as Shanghai Lianchuang Yongjia Venture Capital Enterprise, NHU said in the July 19 notice. NHU will invest no more than RMB50 million in the joint venture and become its limited partner.

The notice said that the planned registered capital of the investment company will not exceed RMB500 million. Its investment targets are domestic high growth enterprises. By investing these enterprises, the joint venture will seek medium-term returns. The JV¡¯s investment sectors include: resource (including agriculture, environmental protection, clean energy, etc.), manufacture (value-added industries such as medicine and chemical industry), and services (traditional and emerging services). It adheres to the following investment criteria: the enterprises should be the potential market leader, have proven management team, generate net profits (more than RMB30 million) in the current year,  have an average annual growth rate, and have the probability of domestically getting listed or sold in a short time. In addition, risks can be expected and valuations shall be reasonable (basically six times PE, and not more than eight times PE). The investment is expected to bring three times returns within five years.