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There's a new Chinese tech trio to look out for, says investment banker

  • Investors may know the Chinese tech trio of "BAT" (Baidu, Alibaba, Tencent), but one banker recommends watching "TMD" — meaning Toutiao, Meituan-Dianping and Didi Chuxing.
  • In addition to Xiaomi, the TMD companies are the ones to monitor for upcoming IPO plans, said Fan Bao, chairman and CEO of China Renaissance.
  • Health care is also a "sizzling hot" area for capital, he said.

The Chinese tech trinity of Baidu, Alibaba and Tencent — known as BAT — may dominate headlines, but a trio of up-and-coming companies with the acronym TMD are now "waiting in the pipeline" for public listings, an investment bank executive said Wednesday.

"I think 2018 and 2019 are probably going to be busy years for IPO pipelines. I have a few, not unicorn, but 'decacorn' companies in the pipeline," said Fan Bao, chairman and CEO of China Renaissance, referring to start-ups with valuations over $10 billion.

Bao listed smartphone maker Xiaomi and the TMD trio of news aggregator Toutiao, consumer app Meituan-Dianping and ride hailing company Didi Chuxing as those "waiting in the pipeline," potentially coming onto the market in 2018 or 2019.

"These are interesting prospects that will probably bring fresh blood to the new market," Bao said to CNBC.

The tech-focused boutique investment bank has advised a large number of Chinese firms, including e-commerce giants Alibaba and JD.com. Its investment arm has over $3 billion in assets under management, according to recent reports.

Bao said there has been a flight toward quality in the Chinese deal-making space, which is a trend he predicted would continue.

Industries seeing interest include artificial intelligence, driverless technology and health care.

"Health care is really sizzling hot," he said, adding that the area is attracting a lot of capital.