Tangxing Capital Closes RMB 950 Million Fund with Participation from National Guiding Fund for Commercialization of Scientific and Technological Achievements

On November 4, 2021, a major announcement was published on the homepage of the National Fund for Technology Transfer and Commercialization (hereinafter referred to as the “Technology Transfer Guidance Fund”). The announcement primarily unveiled six proposed sub-funds slated for investment by the Guidance Fund, one of which is based in Xi’an and affiliated with Tangxing Capital.

It is understood that this fund is the first fund managed by Tangxing Capital, with a size of RMB 950 million. Its investors include the National Guide Fund for the Transformation of Scientific and Technological Achievements, which contributed RMB 250 million, the Shaanxi Provincial Government Investment Guidance Fund, the Greater Xi’an Industrial Fund, and private enterprises. It is the first national-level science and technology venture capital fund in Shaanxi Province featuring a four-tier linkage structure comprising central, provincial, municipal, and private capital. As of December 21, the National Guide Fund for the Transformation of Scientific and Technological Achievements has completed its capital contribution, marking the first time that a local investment institution in Shaanxi has received investment from the Ministry of Science and Technology’s Guide Fund for the Transformation of Scientific and Technological Achievements.

This is an investment firm deeply rooted in Xi’an, founded by renowned investor Ms. Gong Puling in March 2019. Reportedly, Tangxing Capital has achieved remarkable results in just two years. To date, the firm has invested in 15 projects, primarily focusing on the commercialization of technological achievements addressing critical “chokepoint” challenges. Among these portfolio companies, one has passed the IPO review of the ChiNext Board, and another has cleared the IPO review of the STAR Market. Additionally, several other enterprises are either filing for IPOs or have entered the pre-IPO tutoring phase.

Regarding the Technology Achievement Transformation Guidance Fund, Gong Puling told CVSource, “It was only during due diligence that we realized nearly all the projects our fund had previously invested in were from the technology achievement transformation database. This later became one of the key factors in our selection as a sub-fund.”

“Meticulous and detailed in every aspect.”

This was the impression that left a particularly deep mark on Gong Puling throughout the entire process, from applying for the Technology Achievement Transformation Guidance Fund to having its investment confirmed by the fund.

As is well known, there are countless investment institutions applying for funding from the Ministry of Science and Technology’s Guidance Fund, but only a rare few are selected by the fund and receive substantial investments. It is understood that the National Guide Fund for the Transformation of Scientific and Technological Achievements was established in 2011 by the Ministry of Science and Technology and the Ministry of Finance, and is managed by the National Center for Science and Technology Risk Development. This incentive fund was set up by the state to accelerate the transformation and application of scientific and technological achievements, and to encourage social forces and local governments to increase their investment in this area.

High standards, stringent requirements, and high entry barriers are the three key criteria used by the Ministry of Science and Technology’s guidance funds in selecting general partners (GPs), and Tangxing Capital meets these requirements across all dimensions.

For instance, at the high-standard level, Tangxing Capital’s management capabilities, its team’s track record, the establishment of its fund control system, and background checks on core members are all highly valued by government guidance funds. At the high-requirement level, Tangxing Capital demonstrates superior fundraising capabilities, the financial strength of other limited partners (LPs), and an excellent operational system.

The high threshold reflects Tangxing Capital’s investment team’s deep insight and understanding of the technology sector. All invested projects, including past performance, exhibit strong technological attributes, which align closely with the objectives of the Technology Transfer Guidance Fund.

“Interestingly, nearly all the projects we previously invested in were from the database of scientific and technological achievement transformations,” said Gong Puling. She noted that, without her prior knowledge, the Ministry of Science and Technology discovered during its review process that the vast majority of their portfolio companies originated from this transformation database—a fact that undoubtedly strengthened the Ministry’s recognition of Tangxing Capital.

"Undoubtedly, Tangxing Capital's first fund holds significant weight and status."

In Gong Puling’s view, securing investment from the Ministry of Science and Technology’s (MOST) Guidance Fund for the Transformation of Scientific and Technological Achievements is highly significant. First, MOST’s participation sufficiently demonstrates that Tangxing Capital, as a private institution, commands trust in its professional expertise in private equity investment. Second, by becoming a sub-fund dedicated to the transformation of scientific and technological achievements, Tangxing Sci-Tech Innovation will further elevate its strategic positioning, resource integration capabilities, and fund management capabilities under the direct guidance and support of MOST. Third, the presence of MOST’s Guidance Fund as a limited partner (LP) in the investment firm serves as an endorsement in itself, giving high-quality startup projects confidence in being invested in by such a general partner (GP).

More importantly, from a strategic perspective, the support provided by the Ministry of Science and Technology to Tangxing Capital represents significant state-level backing for the commercialization of scientific and technological achievements in Shaanxi Province, and serves as a positive endorsement of Shaanxi’s investment institutions.

According to official information, Tangxing Capital’s primary investment focus is on “hard technology,” with deep engagement in strategic emerging industries heavily supported by the state, including electronic information, advanced manufacturing, healthcare, and new energy.

The core team led by Gong Puling has previously invested in a number of leading companies in niche sectors, including BLT (688333), Yangling Meichang (300861), Triangle Defense (300775), Focuslight Technologies (688167), PaiRui Shares (300831), Sirui Advanced Materials, Huaru Technology, Nova Electronics, Chengli Aviation, Guoke Huanyu, MicroOptics, Western New Zirconium, Longteng Semiconductor, and Qinghang Zijing Equipment.

Gong Puling has her own approach to identifying promising projects.

First, according to Gong Puling, investment is a systematic endeavor. The technical sophistication of the project itself is merely one aspect. To successfully invest in a high-quality project, what is truly tested is the company’s comprehensive capabilities, such as whether it possesses its own core competitiveness.

Secondly, investors’ macro-level thinking is equally important; they must possess a clear understanding and judgment of the industry in which the project operates. Before determining that a project is worthy of investment, it is essential to first ascertain whether the industry exhibits an upward trend and offers sufficient market space.

Third, the founding team is also a key factor in determining whether the project is worth investing in. “Does the company have a central leader? Are this leader’s control capabilities and strategic thinking sufficiently strong?”

For Gong Puling, a severe lack of entrepreneurial capability or integrity constitutes a red line that Tangxing Capital will never cross in its investment decisions. Meanwhile, against the backdrop of an increasingly impetuous investment landscape where competition for deals is intensifying, Tangxing Capital remains committed to value investing and independent judgment, refusing to follow trends or blindly emulate others—avoiding the pitfall of “investing simply because someone else led the round.”

When discussing how to break through in a market environment characterized by highly concentrated investment, Gong Puling stated that, as a mid-sized investment institution, it is essential to first strengthen core competitiveness by developing robust professional judgment capabilities and leveraging specialized expertise along with regional or resource advantages to execute precise investments. By understanding founders and providing value-added support to portfolio companies, firms can earn the trust of entrepreneurs. Furthermore, deal sourcing should shift upstream—“fishing in deep waters”—by engaging in deep collaborations with research institutes, universities, and professional incubators to identify potential leading enterprises before they become targets of widespread capital pursuit.

Qinghang Zijing Equipment is precisely such a project. Looking at China’s civil-military UAV market, as unmanned helicopter technology and costs continue to be optimized and commercial applications mature, the industrial application of unmanned helicopters will unleash greater commercial value; the deployment of unmanned helicopters in medium-range scenarios is on the verge of an explosion. Meanwhile, due to the industry’s characteristics of high technical complexity and elevated production and maintenance costs, major players in the sector are still in the stages of technological validation and accumulation, lacking any absolute leading advantage.

Qinghang Zijing Equipment’s unique aircraft structure offers a distinct advantage in terms of cost-effectiveness for payload capacity, positioning it to potentially become one of the few leading enterprises in the unmanned helicopter market. Furthermore, China’s helicopter equipment in the military sector significantly lags behind international standards, creating an urgent need for upgrades and catch-up development. Tangxing Capital’s investment and empowerment of Qinghang Equipment at this stage are expected to help enhance China’s competitiveness in international military affairs through its products over the next 5 to 10 years.

If you take the time to visit Tangxing Capital’s official website, the phrase “Capital with Warmth” stands out most prominently.

This statement also reflects the inner convictions of founder Gong Puling. Prior to establishing Tangxing Capital, Gong served at Xi’an High-Tech Investment Group, where she personally managed RMB 12 billion in assets. Meanwhile, Gong holds the positions of Chair of the Venture Capital Professional Committee under the Shaanxi Private Equity Association, Vice Chairman of the Shaanxi Venture Capital Association, and Chair of the Supervisory Board of Bright Laser Technologies (688333).

Gong Puling, who retired from Xi’an High-Tech Investment Group at the end of 2018 due to age, did not cease her passion for the investment industry—describing it as “a deep fervor.” At the invitation of several social capital partners (LPs), Gong Puling established Tangxing Capital in March 2019.

More importantly, during that year of “capital winter” and difficult fundraising, the prior completion of RMB 500 million in social capital raising sufficiently demonstrates Tangxing Capital’s social recognition.

For Gong Puling, leveraging her individual capabilities to serve as an investor in hard technology during this unique geopolitical landscape entails greater responsibility and mission. By investing in more projects that address critical technological bottlenecks, fostering their growth, and simultaneously delivering high returns to limited partners (LPs), she can truly realize her self-worth.

It is reported that, to date, Tangxing Capital has invested in 15 high-tech projects, including Chengli Aviation, Huaru Technology, Sirui Advanced Materials, Western New Zirconium, Xinghang Aviation, Biwin Storage, Wande Shares, Guoke Huanyu, Maike Aote, Qinghang Equipment, Taifang Technology, Zhiwei Sensing, Little White Rabbit, and Shuimu Future.

Among these, Sirui New Materials has passed the IPO review meeting of the STAR Market, and Huaru Technology has passed the IPO review meeting of the ChiNext Board; both are awaiting issuance. Meanwhile, other invested companies, including Chengli Aviation, Xinghang Aviation, Biwin Storage, Wande Shares, Guoke Huanyu, Maike Aote, and Little White Rabbit, are all in the pre-listing preparation stage. Furthermore, a number of early-stage projects, such as Qinghang Equipment, Taifang Technology, and Zhiwei Sensing, have consecutively secured investments from renowned venture capital firms, including Tus-Holdings Venture Capital, Wuyuefeng Capital, and Lenovo Ventures.

Among these projects, the majority involve “hardcore technologies” that fill national gaps and address critical technological bottlenecks. All are leading companies in their respective niche sectors. For instance, Huaru Technology is a leading domestic enterprise in military simulation, with its products applied in areas such as combat experimentation, equipment demonstration, simulated training, and testing and evaluation. Shaanxi Sirui specializes in the research, development, and manufacturing of various high-performance copper alloy materials and is an invisible champion in the niche market of metal-matrix composite new materials in China.

Regarding the term “warmth,” Gong Puling offered her own perspective: “I hope to be more than just a financial investor; I aim to become a strategic investor who is both willing and truly capable of providing tangible support to businesses, so that they can genuinely feel the warmth behind our capital.”

In Gong Puling’s view, founders of projects in the “specialized, refined, distinctive, and innovative” sector are typically highly expert in their respective technical fields. However, this specialization often results in relatively limited understanding of markets, management, and society at large. This is precisely where Tangxing Capital differentiates itself: “In technology-focused investing, merely providing capital holds limited significance for these entrepreneurs; what they need more urgently is care, assistance, support, and companionship beyond financial backing.”