Smart City, IoT & 5G:

Impact and Opportunity for SMEs

December 12, 2019

About Terra Magnum Capital Partners

▪ Founded in 2016 with over $800 million capital under management, Terra Magnum Capital

Partners is a private equity firm that specializes in technology investments

Unique alchemy of China experience from LP and GP side

▪ Solid track record investing in China over past 10+ years

▪ Local knowledge – Chinese investment team with local investment experience and

government background, understand the different cultures within the region

▪ Existing network and access to top tier companies

▪ Optimal balance of local network with outstanding Western institutional investment training

The Firm

Strategy

Team

Focus on delivering superior risk-adjusted returns through a portfolio of value-added

strategies – proven through past investments

▪ Primary focus – Invest in core innovative portfolio companies and build industry leaders

▪ Span all sub-asset classes – buyout, growth, venture

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Development of Telecommunication Technology:

New Era of Opportunities Every 10 years

Development

Stage

1G

High

Low

1st

Generation

2G

2nd

Generation

Voice

1980s

Added Text Support

1990s

Multi-Media Application

2000-2010

Mobile Internet

2010-2020

Realization of Smart City, IoT

Connect everything & everyone

2020~

Disruptive Innovation

of Technology

Improved transmission speed

and security

Revolutionary Upgrade of Network

and Information Technology

Time

3G

3rd

Generation

4G

4th

Generation

5G

5th

Generation

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Development of 5G Technology Globally:

China and USA Lead the World

• Commercial 5G was launched in US, China and South Korea earlier this year, with China now running

the world’s largest 5G network across over 50 cities

• China has invested over 700 billion RMB on 4G infrastructure and technology development and it was

anticipated 5G will generate approximately 1.2 trillion’s investment (~US$170 billion) from 2019 to 2024*

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2018 2019

1st 1st Tier

2nd Tier

3rd Tier

Global 5G

Development

China USA Korea Japan UK ItalyChina Korea USA Japan UK DE FR CA RU SG

1st 1st

1st 3rd

1st 4th

5th

Source: CSC Research 4

Development of 5G Technology in China:

The Beginning of Smart Cities and IoT

Beijing: Winter-Olympic

Shenyang：Industrial Control

Tianjin：Transportation

Tsingtao: Smart Harbor

Nanjing：Smart City

Hangzhou：E-commerce

Zhengzhou：Smart Tech-Park

Fuzhou：Security

Shenzhen：FinanceGuiyang：Tourism

Wuhan：Education

Chengdu：Healthcare

Xiong’An: Smart City

Guangzhou：Logistics

Chongqing: Vehicle-to-Everything

Shanghai：Edge Computing

ZJK: Winter-Olympic

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SMEs in the 5G Era: Potential Benefits and Opportunity

• Agile & flexible

• Less reluctant to adopt

change

• First-mover advantage:

Digital Transition

• Develop disruptive

business model

• Enable new and innovative

solutions

• Help to strengthen existing

barrier

• Ability to reach new markets

• Increase operation efficiency

and competitiveness

5GSME

s

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5G Focused Sectors: Opportunity for SMEs

Smart City Internet of Things

▪ Energy Management

▪ Public Security

▪ Smart Wearables

▪ Vehicles-to-Everything

▪ Business Intelligence

▪ Commercial Drones

▪ Supply Chain and Logistics management

▪ Industrial and Manufacturing Systems

▪ Smart Transportation

▪ Smart Healthcare

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From Investors’ Perspective:

5G themed funds are being established to provide support for SMEs

• As 5G has become the “national focus” in China, hundreds of billion-RMB funds have been

established across China, which will open a golden era of investment period for 5G

technologies

• These funds will provide meaningful dry-powder to SMEs in the industry of IoT, Smart City,

Fintech, Transportation, etc.

Source: CVInfo

5G Themed Funds Established

(Non-exhaustive)

Target Size

(RMB Billions)Investors Behind

China National IC Industrial Fund II 200Central Finance, Insurance, China

Mobile, CDB Capital, Sino-IC

5G United Innovation Industrial Fund 30 China Mobile

Hunan 5G IoT Industrial Fund 15 Hunan Xiangjiang Group

China Telecom Smart Connection Industrial Fund 10 China Telecom, CII Fund, Qianhai Arc

Beijing 5G Industrial Fund 5 Etown Capital, JIC

China CICT 5G Industrial Fund 5 CICT Group, Changjiang Fund

Zhejiang 5G Industrial Fund 2 Xiaoshan Government

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From Investors’ Perspective:

Incubation Support for Start-up and SMEs

• A considerable number of incubators have been established to provide in-depth

support for innovative SMEs

• The United Innovation Laboratory and Hengqin-Macau Young Entrepreneur Valley

have incubated over 200 innovative SMEs in Macau and Hong Kong to date

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Takeaway: Impact and Opportunity for SMEs

▪ 5G has become the strategic focus globally and will have significant impact on the economy,

technology and reshape how we live and work in the next decade

▪ The deployment of 5G technology will open a new window of opportunity for SMEs from various

sectors

▪ SMEs should evaluate the opportunity and consider adopting the change (digital transition) and

building up the first-mover advantage, or strengthen existing barriers

▪ Utilize the available support and resources when you can – funding support, incubation assistance,

etc.

▪ Establish cooperation globally and work with the best talents

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