Japanese traders increase investments in Chinese start-ups

Japan’s large trading companies, seeing the excellent returns from the growth of Chinese start-ups, are channeling more of their investments into these start-ups.

Mitsui & Co purchased 12.2 percent of Hutchison MediPharma Ltd, a division of Hutchison China MediTech Ltd. Mitsui sent a representative to sit on the board in China.

In order to raise the Hutchison’s corporate value, Mitsui plans to make an alliance with a Japanese pharmaceutical company.
Mitsui expects to invest approximately 3 billion yen a year in Chinese start-ups that show good potential.
Mitsui hopes to double its investment, up to 15 to 20 billion yen, in the next three years.

An anonymous Mitsui official explained that “In general, corporate value increases by 100-200 percent when a business goes public,” In addition, “It can be as high as 400-500 percent if it is a long-term investment.”