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CCB International (“CCBI”) was first in overall ranking among the “Top 30 Private Equity Investment Institutions in China 2010” in the “China Venture Capital & Private Equity Annual Ranking 2010”, which was announced by Zero2IPO in recent days. Furthermore, it was acclaimed “Best Private Equity Investment Institution in China 2010” and one of the “Top 10 Underwriters (VC/PE Support) for Overseas IPO of Chinese Enterprises 2010”. Zero2IPO is the leading integrated service provider in venture capitals and private equities in China. Its annual ranking of venture capital and private equity investment institutions is the one carrying the most clout and credibility in the country. The ranking is based on such important assessment indexes as the volume of capital managed, the number and capital amount of newly raised funds, the number and capital amount of investment cases, the number of exit cases, the exit amount and the levels of return. The fact that CCBI is able to snap up in one go a number of awards in the current ranking activity is ample testimony to the high recognition it has won in the field of private equity from around the world. It is also a just reflection of the professionalism and brand name advantages of its investment services. Dr, Hu Zhanghong, CEO of CCBI said, “As the investment banking flagship of China Construction Bank, CCBI provides a comprehensive range of Pre-IPO, IPO and Post-IPO investment banking services. Private equity and direct investments are two of CCBI’s mainstays as well as the core competence through which it excels over other investment banks.” It is said that CCBI has in recent years been actively expanding into sector funds and is making forward-looking deployment in emerging industries. According to Zero2IPO statistics, medical and healthcare is a prime candidate to qualify as the hottest industry for investments this year and the first medical sector fund filed with the National Development and Reform Commission—CCBI Medical Fund—is initiated and set up by CCBI. Furthermore, CCBI has also established the first major private equity fund in environmental protection—CCBI Chengtou Environmental Protection Fund, as well as six other renminbi sector funds such as the aviation sector fund which is the first-ever sector-cum-financing fund in China. In fact, in terms of the sizes and the number of funds it has launched, CCBI is the undisputed leader in the banking industry. Meanwhile, by leveraging on the edge of its industrial chain in investment banking, CCBI has made investments in more than 100 enterprises through its value investments and comprehensive integrated financial services. In the process, it has identified and nurtured numerous sector leaders. This year alone, 12 of the projects it has invested as a pre-IPO investor or strategic investor (including, for example, NVC Lighting Technology, Trauson Holdings, Mingyang Wind Power, Kelun Pharmaceutical and Beijing Jiayu Door, Window & Curtain Wall) have achieved listing variously in Hong Kong, America and the mainland. These are typical examples of how CCBI establishes mutually beneficial relations with its customer while realising excellent results.
Hong Kong - 14 December 2010 – CCB International Securities (CCBIS) released its 2011 sector outlook on China’s economy today. We believe economic growth in China will enjoy solid momentum underpinned by rising consumption and stabilizing fixed asset investment (FAI) in spite of weakening external demand. In light of rising inflation, we expect the Chinese government to implement a combination of relatively loose fiscal policy and tight monetary policy in 2011. Key investment themes for the coming year will be the preference for enterprises with exposure to tier II and tier III cities, increasing M&A, industrial consolidation, strategic industries receiving government support from 2011 to 2015 and further progress in renminbi internationalization. Our presentation, covering three major themes of our 2011 outlook, is broken down into three sections: “China Economics”, “Global Financial Strategy” and “Investment Strategy”. These will be presented by Dr. Peter So, Managing Director and Co-Head of Research; Mr. Paul Schulte, Managing Director and Global Head of Financial Strategy & Asia Banks Research; and Dr. Banny Lam, Associate Director and Economist, respectively. Our sector outlook describes how the global economic recovery, though still fragile, is nevertheless gaining momentum, while emerging Asia is going from strength to strength. According to Banny Lam, “With the second round of quantitative easing in place in the US, liquidity is no longer the market’s main concern, rather it is the lack of confidence among investors and consumers. Further monetary easing in the US could drive up international commodity prices, which will put greater upward pressure on China’s domestic industrial and food prices. We expect GDP growth in 2011 to reach 9.5%. CPI will pick up further to 4.2% YoY in the first half of 2011 driven by cost inflation in both agricultural and industrial production. We expect average incomes for urban and rural households to realize 10 to 15% YoY growth in 2011. This, together with rising inflation, should lead to 18.5% YoY growth in retail sales in 2011.” Given rising inflation and the pressure to manage liquidity, we expect the People’s Bank of China (PBOC) to adopt greater tightening measures in 2011, including two 50bp-reserve requirement ratio (RRR) hikes and five interest rates hikes of 125bp in 2011. Renminbi appreciation by 5% against the US dollar is expected in 2011. Turning now to the financial sector, we expect inflation in Asia and deflation in the West. Paul Schulte says, “Reflation creates the need to move away from cash rich companies toward asset rich companies. This means that banks will outperform. Governments in the East will ration credit and leverage wins in an inflationary environment. A deflationary environment is highly likely in Europe as debt levels quash asset prices. Banks will be under pressure and asset allocation will shift to GEMS. In our view, bank M&A will intensify as western banks vie for market share in Asia and other emerging markets. Our global, Asia and emerging market portfolios reflect these views.” On the investment side, we expect to see robust growth in Hong Kong continue despite overhangs in the economy. In general, we expect Hong Kong to achieve robust growth of 6.6% in 2010 and 5.7% in 2011. We forecast the Hang Seng Index (HSI) and HSCEI to reach 28,800 and 16,500 by end-2011, equivalent to a PER of 15.4 and 13.9, respectively, based on 2011 earnings. Peter So says, “We believe market corrections present good buying opportunities for investors to position their portfolios in anticipation of sustainable growth in 2011. In 2011, China is likely to raise its interest rate five times, while Hong Kong’s interest rate will remain largely unchanged. Thus we forecast H-shares will outperform A-shares in 2011, and that the Hang Seng A/H Premium Index will narrow further. We also anticipate stronger performance by the second- and third-tier stocks than blue chips in 2011.” We provide analysis and ratings on the following sectors: China banking (Overweight), China insurance (Overweight), consumer discretionary (Overweight), internet (Overweight), technology (Overweight), metals and mining (Overweight), China property (Neutral), Hong Kong property (Neutral), and construction (Neutral). For more information about the research report, please visit http://www.ccbintl.com/eng/download.aspx?category_id=6 -End- About CCB International Securities Limited CCB International Securities Limited (“CCBIS”) is the professional brokerage arm of CCB International (Holdings) Limited, primarily providing brokerage and research services for its institutional investors and professional investors. CCBIS’ sales, trading and research teams are headed by industry professionals with years of solid experience at bulge bracket banks. Its clients include global mutual and hedge funds as well as Qualified Domestic Institutional Investors (QDII). CCBIS took the lead to launch the state-of-the-art Fidessa trading platform among Chinese securities firms which allows its institutional clients full real-time electronic trading capabilities. The research department provides clients with in-depth economic, industry and company-specific analysis of China and Hong Kong’s key industries including banking, real estate, insurance, energy, resources, infrastructure, telecommunications, internet and online gaming, and retail and consumer products. For further enquires, please contact: Ketchum Hong Kong Ivis Tsang Tel: (852) 3141-8082 Fax: (852) 2510-8199 Email: firstname.lastname@example.org CCBIS Sandy So Tel: (852) 2532-6745 Fax: (852) 2537-0097 Email: email@example.com Disclaimers: CCB International Securities Limited is a wholly-owned subsidiary of China Construction Bank Corporation. Information herein has been obtained from sources believed to be reliable but CCB International Securities Limited, its affiliates and/or subsidiaries (collectively “CCBIS”) do not warrant its completeness or accuracy or appropriateness for any purpose or any person whatsoever. Opinions and estimates constitute our judgment as of the date of this material and are subject to change without notice. Investment involves risk and past performance is not indicative of future results. Information in this report is not intended to provide professional advice for any prospective investors and should not be relied upon in that regard. This report is for informational purposes only and should not be treated as an offer or solicitation for the purchase or sale of any products, investments, securities, trading strategies or, financial instruments of any kind. Neither CCBIS nor any other persons accept any liability whatsoever for any loss arising from any use of this report or its contents or otherwise arising in connection therewith. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors. The opinions and recommendations herein do not take into account prospective investors circumstances, objectives, or needs and are not intended as recommendations of particular securities, financial instruments or strategies to any prospective investors. The recipients of this report shall be solely responsible for making their own independent investigation of the business, financial condition and prospects of companies referred to in this report. Readers are cautioned that actual results may differ materially from those set forth in any forward-looking statements herein. While all reasonable care has been taken to ensure that the facts stated herein are accurate and that the forward-looking statements, opinions and expectations contained herein are based on fair and reasonable assumptions, CCBIS has not been able to verify independently such facts or assumptions and CCBIS shall not be liable for the accuracy, completeness or correctness thereof and no representations or warranty is made, express or implied, in this regard. The recipients must make their own assessments of the relevance, accuracy and adequacy of the information contained in this report and make such independent investigation as they may consider necessary or appropriate for such purpose. Redistribution by any means to any persons, in whole or in part of this research report is strictly prohibited. In particular but without limitation, neither this report nor any copy hereof may be taken or transmitted into Japan, Canada or the United States or distributed, directly or indirectly, into the United States or to any U.S. person (within the meaning of Regulation S under the U.S. Securities Act of 1933) or general public located in Mainland China (but not including people in Hong Kong, Macau and Taiwan). The recipients should be aware that CCBIS may do business with the issuer(s) of the stock(s) covered in this research report or may hold interest in such stock(s) for itself and/or on behalf of its clients from time to time. As a result, investors should be aware that CCBIS may have a conflict of interest that could affect the objectivity of this report and CCBIS will not assume any responsibility in respect thereof.
CCB International (Holdings) Limited (―CCBI‖) is pleased to announce that it has just been named ―The Best Local Brokerage in Hong Kong 2010‖ by the Asiamoney magazine. Furthermore, the research department of CCB International Securities Limited (―CCBI Securities‖), a subsidiary, has won ―The Most Independent Research Brokerage in Hong Kong‖, while Mr. Timothy Sun, its managing director and co-head of research, has also been placed forefront of ―Best Analyst in Hong Kong‖. The awarding of these international recognitions has been voted by more than 2,700 investors from some 1,400 institutions. The winning of so many important awards in one go by CCBI is testimony to the fact that the outstanding performance of its professional team in the past year has been recognised extensively in the sector and this has further established CCBI’s leading position. CCBI Securities is an important link in the industry chain in CCBI’s international investment banking business. Its business covers such financial services as research support, institutional selling, securities brokerage services and transaction settlement. On the strength of its international talents who have years of front-line Wall Street investment banking experience as well as its technically advanced global securities trading platform, CCBI is able to provide investors with professional institutional selling and all-round securities brokerage services. What is more, it can offer investors with research perspectives on the economy, the markets, the sectors and the companies which are comprehensive, in-depth and full of unique insights. CCBI has extensive customer bases in global mutual funds, hedge funds and QDII. With strong research team with near 50 professionals and a large institutional sales network, it is an important bridge for Chinese investors making investments in overseas markets and for international investors making investments in the Chinese market. Asiamoney magazine is a well-known Asian financial monthly enjoying high reputation among its readership of international institutional investors, corporate top management and government financial officials. By dint of its efforts in hosting various ranking activities every year to pay tribute to companies with outstanding performance in Asia’s banking and financial sector, it has become one of the most authoritative ranking institutions in Asia. The magazine will publish the list of winners in the current ―best brokerage‖ survey in its November issue, and the award ceremony is expected to be held in February 2011.
Boer Power Holdings Limited (“Boer Power”; Stock Code: 1685.HK) is listed on the main board of The Stock Exchange of Hong Kong Limited today. This listing is undertaken by CCBI which acts as the sole sponsor, joint global coordinator, joint bookrunner and joint lead manager. Boer Power is the largest domestic provider of electrical distribution systems and solutions in the high-end segment of China’s electrical distribution equipment market. The global offering has been met with overwhelming response and, in particular, the public offering is oversubscribed by more than 340 times. Leveraging on its sound industrial chain in investment banking and its international sales network, CCBI has been providing comprehensive financial services for its clients. Over the years, it has been active in identifying and supporting enterprises with good potentials and in helping them develop rapidly and achieve exponential growth in performance. Subsequently, CCBI nurtures them to become sector leaders and sponsors their successful listing. Examples include such sector leaders as Peak Sport, China ITS and China Starch. Undoubtedly Boer Power is one of such prime examples. Since their co-operation in 2007, CCBI has been assisting Boer Power in positioning precisely in the market, establish its leading position in the sector and build up its domestic advantages. At the same time, CCBI has successfully introduced choice investors such as Leon Capital and Value Partners Limited to Boer Power to enhance its competiveness and raise its corporate image. In recent years, CCBI has participated in the financing activities of some 100 companies in the global capital market, raising more than HKD$ 750 billion in corporate funding in the process. According to the statistics released by the global investment bank research centre, Dealogic, CCBI participated in 27 global equity financing transactions in 2009. In quantity as well as scale terms, CCBI ranked first among all Chinese investment banks. In 2010, CCBI continues to capitalise on its unique competitive edge and has participated in approximately 20 global equity transactions as at the end of October, as sponsor, lead underwriter or manager. In addition, a number of projects are in the pipeline for implementation in the fourth quarter of this year.
On 21 September 2010, a ceremony for the signing of the Shandong Peninsula Blue Economy Investment Fund ("the Blue Economy Fund") and the opening of the related management company was held jointly by CCB International (Holdings) Limited (“CCBI”) and Shandong Luxin Investment Holding Group Company Limited ("the Luxin Group") in Jinan, Shandong Province. Attending the ceremony was, among others, Wang Renyuan, Member of the Standing Committee of the Provincial CPC Committee and Executive Vice Governor of Shandong, who also met with the CCBI team led by CEO Dr. Hu Zhanghong arriving specifically to the "Spring City" for the occasion. This signing ceremony and the setting up of the management company marked the official operation of the Blue Economy Fund. The 21st century is a century of the oceans. In many coastal countries and territories, marine economy has become an important growth pole for regional development. When President Hu Jintao inspected Shandong in April 2009, he declared for the first time that marine economy should be developed vigorously, marine resources should be exploited scientifically and competitive marine industries should be nurtured so as to establish a blue economic zone in the Shandong peninsula. In order to implement these important instructions from the Central Government and to speed up the change in the mode of economic development, the Provincial CPC Committee and Provincial Government of Shandong came up with the Guiding Opinions in Establishing the Shandong Peninsula Blue Economic Zone and deployed a comprehensive strategy for driving the establishment of the zone. It is under such a background that the Luxin Group, as an important government investment platform in Shandong, joined hands with institutions such as CCBI in actively planning the setting up of an investment fund specifically for funding the development of the numerous small and medium-sized enterprises within this blue economic zone. The Blue Economy Fund is an investment fund launched overseas by Shandong Province under the theme of its blue economic zone. The scale of its first phase is US$300 million and its focus is to invest in prime unlisted companies in the blue economy zone and to nurture those it has invested for listing in capital markets both domestically and overseas. There are several “firsts” in the Blue Economy Fund. First, it is launched on an overseas platform by CCBI and the Luxin Group for raising capitals overseas to drive the development of the blue economy zone effectively. Second, its investment directions are at once flexible and practical: the Fund will invest in listed companies but will also involve business in private equities of non-listed companies; it will invest in companies planning to be listed as A shares domestically but will also support the development of those planning to list overseas; it has the full support of the government but will also consolidate the resources of local banks. Thus, it will provide a comprehensive coverage of the different types of prime enterprises in the blue economic zone. Third, the management and operation of the Fund will comply entirely with market, international and professional principles. The aim of the management company is to grow up into an investment company of excellent performance, expanding scale and increasing strength and to provide a positive momentum for the development of the blue economic zone. As one of the sponsors of the Fund, CCBI has realised rapid development of its asset management business both domestically and overseas. As at the end of June 2010, it has invested in almost 100 companies, including sector leaders such as Shimao Property, Shanshui Cement, Peak Sport Products, China Railway and Sinopharm. All told, there are more than 30 listed projects under its belt and the average rate of return is almost 60%. In recent years, CCBI has been actively expanding its private equity investment business domestically. According to the estimation of Zero2IPO Research Centre, by the end of this year, CCBI will have completed raising capitals and started operating for no less than six Renminbi funds. The establishment of the Blue Economy Fund, in particular, signifies that CCBI has made a breakthrough by expanding its private equity fund business overseas.
CCB International (Holdings) Limited (“CCBI”) and Aviation Industry Corporation of China (“AVIC”) jointly established China Aviation PE Fund with the objective of raising as much as RMB 5 billion in the first phase. Over a long term period the fund would raise RMB 20 billion. This is the third RMB-denominated fund successfully set up by CCBI within one and a half year. The main scope of investment of this Aviation PE Fund covers not only AVIC portfolio companies and subsidiaries of these AVIC portfolio companies, but also innovative aviation enterprises possessing new technology or those venturing into new frontiers and new business models. The Fund will soon make an investment of around RMB1 billion in AVIC's portfolio companies. Positioned in the high-end segment of the manufacturing industry, the aviation sector is a strategic and a typical hi-tech industry. It is an industry with high technological contents, large market capacity, extensive industry coverage and promising investment prospects. As the main conduit of development of the Chinese aviation sector and a well-known enterprise under the State Council, AVIC assumes a vital strategic position in China’s defence and industrial system. “The Aviation Fund will play an important role in advancing AVIC’s restructuring, mergers and acquisitions; promoting the development of the Chinese aviation sector; and drawing support from CCBI’s powerful financial platform and solid fund management experience in building up the Chinese military,” says Dr. Hu Zhanghong, chief executive officer of CCBI. CCBI has been spending much effort in nurturing the fund business and preparing actively for the establishment of a number of RMB-denominated PE funds. In addition to the Aviation Fund, it successfully set up earlier this year the Wanjiang Industrial Region Transfer PE Fund. For the rest of this year, it will set up a number of RMB-denominated funds such as Environment Protection PE Fund, Culture PE Fund and Resources Venture Fund. By the end of this year, the size of its RMB-denominated PE fund business will reach around RMB15 billion.
CCB International (Holdings) Limited (“CCBI”) is the Sole Global Coordinator, Sole Bookrunner, Sole Lead Manager and Sole Sponsor for the main board listing of Chiho-Tiande Group Limited (“Chiho-Tiande”, Stock code: 00976) in Hong Kong. Chiho-Tiande was listed on the main board of the Stock Exchange of Hong Kong today. Chiho-Tiande is the largest mixed metal scrap recycler and processor in China. Its principal businesses comprise mixed metal scrap recycling, reuse and processing, foundry business and wholesale business. Chiho-Tiande always regards innovation as its growth driver. It at the same time strives to establish an environmental friendly and green state-of-the-art metal recycling business. The sole coordinating and sponsoring for Chiho-Tiande’s global offering reflects the high regard CCBI places on emerging industries. Strategic emerging industries are the main driving force to economic growth and this is one of the key development foci of CCBI. In recent years, CCBI has actively extended its footprint in emerging industries including healthcare, cultural, green and new energy sectors and has set up RMB-denominated and foreign currency funds in both China and Hong Kong with premium returns. Currently, it has set up eight research teams focusing on emerging industries analysis in order to lay a solid foundation for future development.
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