Chinese Financial Leasing: Making it Work for You

Angela ZHAO Feb 25th, 2016 CM INTERNATIONAL FINANCIAL LEASING CO., LTD

Chinese Leasing Industry

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China is the 2nd largest leasing market in the world.

By the end of 2015, there are about 4,000 leasing companies in China.

The total asset of Chinese leasing industry reached approximately $ 615 Billion in 2015.

Total Asset of Chinese Leasing Industry

4 24 57 108

143

238 323

492

615

2007 2008 2009 2010 2011 2012 2013 2014 2015

$B

I. Leasing Industry in China

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Source: White Clarke Global Leasing Report 2014

According to the data from “2014 World Leasing Yearbook”, world leasing turnover maintained a steady high speed growth from 1993 to 2012 in overall.

In 2007, the outburst of financial crisis resulted in decrease of turnover. By 2012, the world leasing fully recovered and realized transcendence with turnover of USD 868 billion.

Leasing Trading Volume in Globe Investment penetration is an important symbol to

measure leasing development condition of a country.

In the world’s developed economies, the investment penetration of Chinese leasing industry is still in lower level.

Compared to overall development level of the world, the maturity of leasing in China is still low, and still has plenty of room to grow.

Investment Penetration of Leasing

0

200

400

600

800

1,000 Trading Volume of World Leasing (Unit:…

3.8 7.2

8.5 15.8

19.8 20.8

22.0 27.5

China

South Korea

UK

US

I. Leasing Industry in China (Cont.)

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Type No. of Companies by the End of 2014

No. of Companies by the End of 2013 Growth Rate Proportion of

Company Quantity

Financial Leasing 30 23 30% 1%

Local Leasing 152 123 24% 7%

Foreign Leasing 2,020 880 130% 92%

Total 2,202 1,026 114% 100%

23 123 880 1,026

30 152

2,020 2,202

Financial Leasing Local Leasing Foreign Leasing Total

No. of Companies by the End of 2013

Source: China Leasing Alliance & Multiview Information Center

Historical Evolution — Number of Enterprises: In recent 2 years, the number of enterprises engaged in financial leasing business increased rapidly, especially the foreign-funded leasing companies which are influenced by policies.

Type (Unit: 100 MN RMB)

Total Business Volume by the

End of 2014

Total Business Volume by the

End of 2013 Increment Growth Rate

2014 Total Business Volume

Proportion

Financial Leasing 13,000 8,600 4,400 51% 41%

Local Leasing 10,000 6,900 3,100 45% 31%

Foreign Leasing 9,000 5,500 3,500 64% 28%

Total 32,000 21,000 11,000 52% 100%

Historical Evolution — Business Development Scale: With the increasing number of enterprises, business has been expanding as well. The total business volume proportion of financial leasing enterprises is outstanding, and foreign leasing increased dramatically.

8,600 6,900 5,500 21,000

13,000 10,000 9,000

32,000

Financial Leasing Local Leasing Foreign Leasing Total

Total Business Volume by the End of 2013

I. Leasing Industry in China (Cont.)

5 Source: Financial Leasing Specialized Committee of China Banking Association & Leasing Specialized Committee of CAEFI

In recent years, the market scale of RMB 2 trillion has been formed with the development of explosive speed. It fully embodies the aspiration from local market to financial leasing products. Because of the differences of regulatory paths and investment

subjects, 3 kinds of leasing companies are formed. Under the policy guidance, each kind of leasing companies also formed its own operation strategy and the overall operation is in good condition.

Financial leasing companies develop since 2008. The asset size and profitability increase year by year. By the end of 2014, the total asset reached RMB 1.3 trillion, and the net profit reached RMB 16.3 billion.

Financial Leasing Company In recent 2 years, foreign leasing companies’

development situation is relatively good. Because of the different channels of gaining operation funds, there are some differences on operational data compared to financial leasing companies. However, it also maintains higher profitability.

Foreign Leasing Company

43.12 77.79 159.07 330.47

535.9 691.46

840.1

4.13% 6.04%

8.59% 11.12%

13.85% 14.65% 11.69%

0.00%

5.00%

10.00%

15.00%

20.00%

0

500

1000

2008 2009 1010 2011 2012 2013 2014

Revenue ROEIndex Industry Mean

Average Total Asset of the

Top 10

Average Total Asset of the

Top 20 Working Capital Allocation Ratio 13.80% 11.58% 11.17%

Liquidity Ratio 1.16 2.45 2.05 ROA 1.75% 2.41% 2.27% ROE 4.79% 11.67% 11.10%

Long-term Liability

Proportion 49.03% 52.43% 51.36%

Unit: 100 MN RMB

Chinese Financial Leasing Industry

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Financial leasing companies, which are under the supervision of CBRC, are the core of Chinese leasing industry

Only around 40 financial leasing companies in China

The total asset of Chinese financial leasing industry is $230 Billion

The total asset of top Chinese financial leasing company already reached $10 billion.

Chinese Financial Leasing Industry

4,000 Leasing

Company40

Financial Leasing

Company

Shipping Portfolio Assets Value Vessels DWT M

RMB M USD M

50,000 7,692 309 400

27,500 4,231 325 600

19,000 2,923 173 -

12,300 1,892 130 220

10,100 1,554 45 -

3,100 5 -

TOP 5 Shipping Lessors in China

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By end of 2015 Including merchant ships, offshore, port facility and yard finance

General Procedure of Deal

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Deal Approach

• Any time Any where

Term Sheet

• 1-2weeks

Credit Approval

• 1 -2months

Documentation

• 1-3 weeks

Drawdown

• Depending on CPs

CM International Financial Leasing Co., Ltd.

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China Minsheng Investment Corp., Ltd. (CMI) is a leading international private investment group with RMB 50 billion in registered capital.

CM International Financial Leasing Co., Ltd., a Sino-foreign leasing joint venture invested by China Minsheng Investment Corp., Ltd. and Korea Hana Bank, was established in April 2015.

The core business sectors of CMIFL comprise of aviation, shipping, new energy and information equipment.

II. CMIFL’s Organization Structure

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China Minsheng Investment Corp., Ltd.

(“CMI”)

Hana Bank of South Korea (“Hana Bank”)

CM International Financial Leasing Corp., Ltd. (“CMIFL”)

75% 25%

Major Operations

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Shareholder Structure Business Segments

CMIFL Shipping Business Coverage

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With the implement of "One Belt And One Road" initiative, CMIFL is accelerating its exploration of overseas markets, focusing on multiple shipping and offshore sectors.

Bulker Carrier Tanker Containership

Dredger LNG Carrier FPSO Offshore Unit

Port

g p , (“CMI”) (中国民生投资股份有限公司)

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CMI is the largest private investment company in China, organized by All-China Federation of Industry & Commerce (“ACFIC”) and launched by 59 well-known private enterprises and investors throughout China.

On 8 February 2014, ACFIC formally requested to include title of “China” in the head of company’s name from the State Council and it was approved from the State Council on 14 March 2014.

On 24 March 2014, CMI received preliminarily approval of company name from the State Administration of Industry and Commerce; On 25 March, CMI opened capital verification account, and the first batch paid-in capital has been in place.

CMI was established and registered in Shanghai in May 2014, with a registered capital of RMB 50 billion (equals to abt. USD 8.1 billion) and the first batch paid-in capital is RMB 33.2 billion (equals to abt. USD 5.4 billion). CMI’s business scope includes equity investment and its management, business consulting, financial consulting, industrial investment, asset management and investment consulting.

Company’s ownership structure is disperse and corporate management structure is consummate. The board currently consists of 14 members. Under the board, there are strategy management committee, investment management committee, risk management committee, compensation committee, nomination and personnel committee, affiliate transaction committee, advisory committee and audit committee.

Company Overview

III. CMI’s Member Companies

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China Minsheng Investment Corp., Ltd.

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What We Care

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Positive free cash flow Reliable financial position

Strong support from shareholder

Beautiful asset: lucrative entrance point compared to historic levels of asset values

Innovative Total Solution Provider

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Financial Lease Operating Lease Bareboat Charter, Time Charter

COA

Equity Finance

Mezzanine Finance

Shipping Fund

business model

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利差

rental income

Asset Appreciation

Equity Appreciation

• BBC（financial leasing） • Operating leasing • Time charter • COA • Profit sharing

• Resale profit sharing with charter • Sale gain from own fleet

• Share price up of listed company • IPO • Asset package sold to listed co

Management Fee and Carry under ship fund

CMIFL Shipping Business Partner

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Many thanks for your attention

欢迎垂询我们的船舶海工团队

Please contact CMIFL Shipping & Offshore Team:

Simon LIU / E: liuhua@cm-inv.com / M: +86-139 1039 3966

Angela ZHAO (Mrs.) / E: zhaobeijia@cm-inv.com / M: +86-139 1038 4216

Yao ZHANG / E: zhangyao@cm-inv.com /

Leo LIU / E: liubo1@cm-inv.com/

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