Fexon Technology Ltd: foam normal market will adjust itself

Fexon Technology Ltd reports: From home for four seasons as reported economic losses caused by the hotel industry inflection point of dispute, such as home-founder, Sequoia Capital China Fund founding partner, Shen Peng-South recently accepted an exclusive interview with the Shanghai Securities News that the current economic bubble hotel did exist, and once on the industry should be blindly optimistic about it responsible for the investors. However, he also said that the bursting of the bubble and the emergence of a market-friendly self-regulated industry will be out of the weak.

Shanghai Securities News: Some remarks on the market now that China's economy and hotel industry has reached a turning point, how is your view?

Shen Peng: I think the turning point that some now too. Anything is a moving from quantitative to qualitative change in the process, the reality of life in little inflection point in all of a sudden this dramatic scene. But over the past few years China's economy hotels is a little, I think is simply incomprehensible. If the listing of homes, we feel that this industry is a high-growth high-return industry. However, I think that any industry is not profiteering industry, economic hotels, the average rate of return of around 10 per cent, leading enterprises which may be 20 per cent, while the weak may be only 2-3 percent. Now, in some cities, certain areas, economic hotels may be open too much, there is a bubble, but from the whole of China, this market still has great space.

However, in a free market such a rush to invest, I think that is quite normal. It is to rely on the market to regulate their own time, if this industry earn less, of course, enterprises will be eliminated, it is very normal thing. Last year, I think there is no need to sing praises crazy and this year is no need to sing the air.

Shanghai Securities News: Do you think that the macroeconomic environment, such as credits for the changes will impact the industry?

Shen Peng: factors such as the loan to the United States public market price of the stock decline, but also give investors more rational. I think that last year investors too blindly, they should be responsible for the industry's bubble. Many investors at that time to bring this into enterprises listed packaging industries. At that time, I often encountered such enterprises, and asked him to what is now the development stage, he said, I Pre-IPO (for listing), so some investors stormed on to hear this, but the final result is very possible behind there is no IPO. Last year, a lot of VC, PE crazy chase hotels such as the economic sectors, but they encounter market adjustment, will eventually suffer. (Fexon Technology Ltd)

Shanghai Securities News: If the management of their own family also said that the outbreak of a few years ago that the growth is not normal, then, if the home such as slower growth in the how?

Shen Peng: I also think that if the outbreak home a few years ago of growth is not the norm. When it's only 10 stores, if opened 20 new year, the growth rate is 200%, but he now has 300 stores, opened 150 new year, the growth rate of only 50%. In fact, the new year opened 150 stores still very considerable growth, but also means that if the home there will be changes in the management, ownership and the rapid expansion of large-scale replication capabilities. I think that when the economy hotels expand the scale, the growth slowdown is normal.

Talking about expansion, I do not think is such as home acquisition growth initiative. Such as the home or business will be concerned about their ability to raise, through its own to expand continuously. And the new scale. However, if enterprises such as home with a complementary, and the price is right, may also consider acquisitions.

Shanghai Securities News: Sequoia Capital began last year have been bullish on China's consumer goods industry, in the present macroeconomic environment change the circumstances, if you still good?

Shen Peng: appreciation of the renminbi and the state's macro regulation and control, consumer industries, the impact of minimum services. The recent adjustment of the domestic stock market, it will not affect Sequoia's investment philosophy. Sequoia Capital is to do long-term investment, looked at the 10, 20 and 30 after which China will be successful industries and enterprises. I think it is the adjustment of the stock market in a sense, is a good thing, it can promote better entrepreneurs to look at business models to focus on the profitability of enterprises.(Fexon Technology Ltd)

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