Recently, the Ministry of Finance published the notice regarding the third batch of government and social capital cooperation demonstration projects, which shows that project quantity and investment amount exceeded market expectations. Currently PPP is deemed an important measure in providing a floor to the economy. In finance, it’s imperative to capture this opportunity. CSC President Jiang Pengcheng thinks that as risk assessment improves, some PE funds will participate in PPP through equity stakes. PE institutions gravitate toward investing into businesses along the PPP industry chain, but when investing in these companies, their professional caliber should be the primary investment factor. Private equity participation in PPP PPP originates from the collaboration between government and social capital. For example, to promote SME development and entrepreneurial innovation, government sets up guidance funds as FOFs, and invests capital through professionally managed sub-funds. In the infrastructure field, PE funds can also participate. In the beginning, PE funds tend to invest through debt; as risk assessment improves, some funds start to invest in equity, much like the development path for private funds in real estate. Whether PEs will make equity investments in infrastructure PPP businesses depends on the institution’s risk assessment ability and the characteristics of investment targets, as PE investments requires relatively high returns on assets. As PE investment institutions, we tend to participate in the PPP feast through investing in PPP companies rather than individual PPP projects. CSC’s position in this area Flowers King Horticulture is one of our earlier PPP investments that is now listed. We invested in it before its stock reform for 3 reasons: first, we have favorable views on the municipal and real estate horticulture sector; second, we gained in-depth knowledge about the company with the support of numerous strategic partners; last, we thought the valuation was reasonable at less than 10x PE. During the listing process of Flowers King, we fully used our capital markets insights and guided the company to aggressively expand beyond Eastern China, thus ensured a smooth listing. We invested in another PPP related company called Landsky. Since 2016, Landsky is the first in its field to raise the concept of “urban light environment operator,” and provides PPP model design, investment, construction and operation for prime urban light environment. PE’s view on PPP investment opportunities From equity investment perspective, PPP is an operational model rather than an industry opportunity. PPP can have substantial impact in its related industries, but how much of this impact can be substantiated depends on the company’s professional capabilities, we must not exaggerate the changes it will make to the company and industry. Therefore, for the primary market investments, investors need to seize the trends but avoid pitfalls from chasing hotspots. 　 For secondary markets, the investment logic is that PPP as a business model will help improve the listed companies’ performance after a while. The caveat is that when choosing investment targets, professional caliber remains the key consideration. From an investment perspective, we gauge the quantity of future projects by past projects, pipeline and resources; instead of relying on imagination.