Opportunity In China Focused Private Equity Mar2009

Jan 2009 Version 2.0 by KC Yoon

PROPRIETARY & CONFIDENTIAL

“Opportunity in China-Focused Private Equity”

- Landscape Change with the Financial Crisis?

Mar 2009


"While the overall investment environment

remains challenging and the effects of 2008's turbulence are

still being felt, 2009 will be a year of unique opportunity for

private equity, venture capital and M&As in China."

China's economy continues to grow, powered largely by

successful small and medium private businesses, many of which are among the fastestgrowing

companies in the world. Private equity and venture capital investment in China will likely reach

record levels in 2009, the report projects, with over $1bn in new investment into high growth

Chinese SMEs with strong focus on China's booming domestic market.

"In 2009, China should rightly be among the most attractive and active private equity investment

markets in the world," the China First Capital report predicts. "Many of the international private

equity firms we work with are expecting to invest more in Chinese SMEs in 2009 than in 2008.

Chinese companies raising capital this year will enjoy significant financial advantages over

competitors, improving market share and profitability."

2009 – China Most Attractive PE Market

“Peter Fuhrman, Chairman China First Capital” Mar 2009


Presentation Outline

Crisis Creating Favorable Conditions for Private Equity in China

Crisis Creating Favorable Conditions for Private Equity in China

Global Funds Continue to Flow to China

Global Funds Continue to Flow to China

Key Consumer Trends and Potential Investment Themes

Key Consumer Trends and Potential Investment Themes

ONE: Retail + Luxury

ONE: Retail + Luxury

TWO: Niche Branded+ Dist

Services

TWO: Niche Branded+ Dist

Services

THREE: Education & Healthcare

THREE: Education & Healthcare

ONE: Export to Domestic Shift

ONE: Export to Domestic Shift

TWO: Rise of Domestic PE

TWO: Rise of Domestic PE

THREE: Most Attractive Market

THREE: Most Attractive Market

FOUR: Optimal Timing for Value

FOUR: Optimal Timing for Value

Consumer Focus Funds Making Entry into China

Consumer Focus Funds Making Entry into China

China Weathering Crisis?

China Weathering Crisis?

Macro-factors Driving China’s

consumer economy

Macro-factors Driving China’s

consumer economy

Other Trends: PIPE/RTO deals

Other Trends: PIPE/RTO deals


Current Crisis Creating Driving Forces for Private Equity (I)

Right Strategy=WinningFund

Conditions for PE Investments in China increasingly favourable Conditions for PE Investments in China increasingly favourable

China’s Strategic Shift from “Export Reliant Model” to “Domestic

Consumption Model”

China’s Strategic Shift from “Export Reliant Model” to “Domestic

Consumption Model”

11

Economic transition will result in growth of new economic sectors, new industries & companies-Creating investment

opportunities

Economic transition will result in growth of new economic sectors, new industries & companies-Creating investment

opportunities

Watsons to open 120 new stores

in 2009 (vs 86 in 2008) with a

focus on selling self-branded

lower-priced products

Watsons to open 120 new stores

in 2009 (vs 86 in 2008) with a

focus on selling self-branded

lower-priced products

Global fast fashion retailer H&M

to open 5 flagship stores in

Beijing, Shanghai, HK.

Global fast fashion retailer H&M

to open 5 flagship stores in

Beijing, Shanghai, HK.

Retail sales continue to grow Foreign retailers continue strong

expansion plans in 2009

Chinese retailers report strong

growth for 2008

President Grp opening 7-11 in

Shanghai targetting highend

consumers

President Grp opening 7-11 in

Shanghai targetting highend

consumers

Leading Ladies

Shoe Brand

Revenues grew

over 60%

Leading Ladies

Shoe Brand

Revenues grew

over 60%

Leading Sports

Brand –Revenues

+Profit grew over

50%

Leading Sports

Brand –Revenues

+Profit grew over

50%

Leading Dept

Store Revenues

increased over

30%

Leading Dept

Store Revenues

increased over

30%


Current Crisis Creating Driving Forces for Private Equity (II)


Chinese Government recognition of role of PE in driving economic;

growth and support for growth in domestic PE

Chinese Government recognition of role of PE in driving economic;

growth and support for growth in domestic PE

22

Favourable changes encourage both foreign PE funds to enter market

as well as setup of domestic funds

Lower Regulatory Risk & Increase Funding

Pool

Favourable changes encourage both foreign PE funds to enter market

as well as setup of domestic funds

Lower Regulatory Risk & Increase Funding

Pool

PE landscape dominated by foreign players; change of

regulatory policies for foreign-investments a

risk

PE landscape dominated by foreign players; change of

regulatory policies for foreign-investments a

risk

Key changes include:• Setup of Chinese SWF• Capital reforms to encourage domestic listing• Allowing foreign-funs to have RMN-demoninated funds• Intention to setup”NASDAQ” equivalent stoock market in Shenzhen• Many provincial RMB PE funds being setup

Key changes include:• Setup of Chinese SWF• Capital reforms to encourage domestic listing• Allowing foreign-funs to have RMN-demoninated funds• Intention to setup”NASDAQ” equivalent stoock market in Shenzhen• Many provincial RMB PE funds being setup

Growing Size and Number of China-domestic RMB Fund Recent successful raising of

China-focused Funds

USD950M-

cosumer-focused

fund

USD950M-

cosumer-focused

fund

USD 1 BillionUSD 1 Billion

USD178M- Mid-

market fund

USD178M- Mid-

market fund


Current Crisis Creating Driving Forces for Private Equity (III)



China stands-out as “Most Attractive” investment opportunity

globally with further boost from Govt stimulus of “4 trillion RMB”

China stands-out as “Most Attractive” investment opportunity

globally with further boost from Govt stimulus of “4 trillion RMB”

33

Impact of Government Stimulus Package being reflected with

domestic consumptioncontinuing to grow-

Investment Opportunities in Consumer/Retail

Impact of Government Stimulus Package being reflected with

domestic consumptioncontinuing to grow-

Investment Opportunities in Consumer/Retail

Financial crisis has seen China impacted by negative export

growth and danger of slower consumption due to uncertainty in

employment

Financial crisis has seen China impacted by negative export

growth and danger of slower consumption due to uncertainty in

employment

Pro-active approach by Chinese Government through series of actions- tax-breaks, policy encouragement + MOST IMPORTANT the RMB4 TR STIMULUS

Pro-active approach by Chinese Government through series of actions- tax-breaks, policy encouragement + MOST IMPORTANT the RMB4 TR STIMULUS

Breakdown of Stimulus Package – focus driving

consumption in rural areasStimulus encouraging consumption


Current Crisis Creating Driving Forces for Private Equity (II)



Market Condition and Timing “ripe” to find “Fairly-valued”

companies; also Opportunities as some sectors face consolidation

Market Condition and Timing “ripe” to find “Fairly-valued”

companies; also Opportunities as some sectors face consolidation

44

Fairly Valued & Competitive

Companies will emerge in various market

space-Creating “Good-Value”

Investment

Fairly Valued & Competitive

Companies will emerge in various market

space-Creating “Good-Value”

Investment

Market was reaching “Bubble” stage as “Big Funds” were chasing deals at unreasonably high

valuations

Market was reaching “Bubble” stage as “Big Funds” were chasing deals at unreasonably high

valuations

Poor IPO environment drive companies to be more realistic in funding valuations; Market consolidation will see domestic “competitive” companies become market leaders

Poor IPO environment drive companies to be more realistic in funding valuations; Market consolidation will see domestic “competitive” companies become market leaders

IPOs drop-off in 2008..vs growth 2004-2007…

While IPO conditions may return only in

1-2 years, growth of domestic PE may

see increase in strategic M&A i.e. trade

sale opportunities


China “Best Positioned” & Appearing to Weather the storm Well


Carlyle Group is of the view that amongst the Emerging BRIC Economies, China is ‘best positioned” to sustain a high level of economic growth

through the crisis

Carlyle Group is of the view that amongst the Emerging BRIC Economies, China is ‘best positioned” to sustain a high level of economic growth

through the crisis

Financial Times UK

Oct 2008Oct 2008 Mar 2009Mar 2009


Global Fund Flows are Already Shifting to China- with focus on Growth Capital + Consumer investments

Asia-funds (investable in China) raised USD 61 Billion , 71% more than 2007; China-dedicated Funds Raised USD14.5 Billion in 2008 vs USD 3.9

Billion in 2007

Asia-funds (investable in China) raised USD 61 Billion , 71% more than 2007; China-dedicated Funds Raised USD14.5 Billion in 2008 vs USD 3.9

Billion in 2007

Results of KMPG Survey of PE

Firms plans for China

Results of KMPG Survey of PE

Firms plans for China

Growth Capital will be primary focus of funds (over 70%)

Growth Capital will be primary focus of funds (over 70%)

Focus on consumer, medical, retail and increasingly on logistic & distribution

Focus on consumer, medical, retail and increasingly on logistic & distribution

Fundraising for the next 12 months will be focused on smaller funds upto USD50M

Fundraising for the next 12 months will be focused on smaller funds upto USD50M

IPO still drive exit option (HK preferred) but trade sale will likely be a strong channel as

well

IPO still drive exit option (HK preferred) but trade sale will likely be a strong channel as

well


China Consumer-Focused Funds Successfully Raised Significant Sums in 2008

To date, eight investments have been made from AEM3: a $50m investment for a majority stake in Beijing-based hot pot chain Xiabu Xiabu; a $103m investment, as part of a consortium, in Chinese company Ambow Education; a $65m investment, again as part of a consortium, in Chinese company 7 Days Inn Group;

Paul Fletcher, senior partner, Actis, said, 'We are delighted to have assembled such an outstanding group of investors who continue to recognise the opportunities for private equity investment across the emerging markets, despite the current economic climate.‘We believe that underlying economic growth remains resilient in many of the emerging markets. Much of this growth can be linked to businesses benefiting from consumer demand and increased investment in domestic infrastructure and Actis's investment strategy is tailored accordingly.

SignificantRMB-denominatd funds raised supplanting USD

funds for the 1st time

SignificantRMB-denominatd funds raised supplanting USD

funds for the 1st time

Asia (Including China) emerging funds continue to be

successfully raised- increasingly focused on the Chinese consumer economy

Asia (Including China) emerging funds continue to be

successfully raised- increasingly focused on the Chinese consumer economy

Emerging markets private equity investor Actis has closed its Actis Emerging Markets 3 fund on $2.9bn. Exceeding its original target of $2.5bn.

Emerging markets private equity investor Actis has closed its Actis Emerging Markets 3 fund on $2.9bn. Exceeding its original target of $2.5bn.


Internet+Media/Ent9 (USD 420M)

Internet+Media/Ent9 (USD 420M)

Investments Continue with Increasing Focus on the Consumer &related Industries/Services

Medical & Healthcare4 (USD 270M)

Medical & Healthcare4 (USD 270M)

Consumer Products/Retail2 (USD 680M)

Consumer Products/Retail2 (USD 680M)

Services (IT+Logistics)9 (720M)

Services (IT+Logistics)9 (720M)

Already close to 50% of deals and investments are related to the Consumer Economy..

Already close to 50% of deals and investments are related to the Consumer Economy..

Summary of deals tillQ3 2008



Consumer Trends & Investment Themes

“Top Dealmaker from Sequoia Capital” Mar 2009

“expects more China deals in 2009 for its growth fund as valuations become more reasonable during the current downturn. More than one third of its two China funds -- Sequoia Capital China II and Sequoia

China Growth I, both launched in May 2007 -- have been invested, Neil Shen, Sequoia Capital China founding partner, told the Reuters Private Equity and Hedge Funds Summit. Its first $250 million (171.5 million pounds) China fund launched in 2005 was fully invested before Sequoia Capital China launched the other two funds in 2007. Currently, Sequoia Capital China has about 50 portfolio companies, said Shen."I think things will be better in the next 12 months and I do believe valuation is getting more and more reasonable so probably the next 12 months should be a very interesting period for us to find growth opportunities," Shen told the Reuters Summit.He also noted that Sequoia Capital China will focus on consumer-driven sectors this year share in the growth of domestic consumption with Beijing's policy support


Macro-Factors Driving China’s Future Consumer Economy

3

Growth of Chinese Middle-Class


Urbanization and Growth of Cities


Growth and Impact of the Internet


> 200 Cities

with >1M

residents

By 2015, >300M

lower-middle

class; 100M

luxury

consumers

NOW >300M

users; >RMB

120B online

consumer

sales

Demand for Housing-related products and

services

Demand for Housing-related products and

services

Demand for lifestyle & convenient services

Demand for lifestyle & convenient services

Demand for better healthcare

Demand for better healthcare

Over 110 high-

consumer potential

cities with 34% of

GDP

Most widespread media- access middle-

class consumers

Most widespread media- access middle-

class consumers

Growth of B2C Growth of B2C

IKEA continue to open 2

stores/year

IKEA continue to open 2

stores/year

Sunning plans a B2C siteSunning plans a B2C site

Korea SKTelecom to invest

RMB500M in qingxuan its

B2C site

Korea SKTelecom to invest

RMB500M in qingxuan its

B2C site

Preident 7-11 to open3-7

stores in Shanghai plans

for 300 stores in 3yrs

Preident 7-11 to open3-7

stores in Shanghai plans

for 300 stores in 3yrs

China Chain Nepstar

drugstar opem/acquire 700

stores 2008, plans 3000

China Chain Nepstar

drugstar opem/acquire 700

stores 2008, plans 3000

Letao to open largest

online toy store in China

Letao to open largest

online toy store in China

Sunning plans 500sqm

stores in the rural areas

targetting for 3000

Sunning plans 500sqm

stores in the rural areas

targetting for 3000

Retailers

continue to

expand network


Key Consumer Trends with Investment Potential

+ 1







Govt StimulusGovt Stimulus

“City-Living”Consumer Services

“City-Living”Consumer Services

Affordable Luxury for the Young

Affluent

Affordable Luxury for the Young

Affluent

“Mass Market” + “Good Enough”

Products

“Mass Market” + “Good Enough”

Products

Online Consumer Brands

Online Consumer Brands

“Knowledge”Services

“Knowledge”Services

“Health”+ “Well-being” Services

“Health”+ “Well-being” Services

Large MarketLarge Market

Criteria for Strong

Investment

Potential

High GrowthHigh Growth

Able to Sustain Good

Margins

Able to Sustain Good

Margins

Defensible Niche

Defensible Niche

+“GREEN”- Increasingly

important

Global trend

+“GREEN”- Increasingly

important

Global trend

3


Investment Theme 1 : Emerging Luxury Brands + Inner City Retail & Services + Direct-to-Consumer Services (I)


Niche “Luxury” BrandsNiche “Luxury” Brands

Jewellry Retail valued at USD15 Billion and is fragmented

Jewellry Retail valued at USD15 Billion and is fragmented

Affordable “Luxury” + “Mass Market”

Affordable “Luxury” + “Mass Market”

“Quick Fashion”-Success of ZARA shows ready market for “affordable” luxury

targetted at the mass market;

“Quick Fashion”-Success of ZARA shows ready market for “affordable” luxury

targetted at the mass market;

Retail Chains in Inner Cities Retail Chains in Inner Cities

Retail chains in 2nd/3rd tier cities where growth potential is high and also target for M&A by

larger players

Retail chains in 2nd/3rd tier cities where growth potential is high and also target for M&A by

larger players

Emerging “luxury” brands in jewellery, cosmetics & ladies accessories (eg. Unique hairpin retail combined with

strong service element)

Emerging “luxury” brands in jewellery, cosmetics & ladies accessories (eg. Unique hairpin retail combined with

strong service element)

Zara’s China sales continue to grow; H&M maintain plans to opne

5 outlets

Zara’s China sales continue to grow; H&M maintain plans to opne

5 outlets


Investment Theme 1 : Emerging Luxury Brands + Inner City Retail & Services + Direct-to-Consumer Services (II)

Online Consumer/Ecommerce Services

Online Consumer/Ecommerce Services

• Online apparel market already reached over USD2 Billion – Leading players VANCL and PPG both received funding from investors being niche online players and are able to compete effectively in the market..

• C2C Business - Both Alibaba and Baidu have recently announced significant investments to grow their C2C ecommerce businesses..

More Chinese are using the internet as a source for ordering goods and services. Research institute Data Centre of China Internet, said in a report that China’s Internet users spent 256.1 billion yuan (37.5 billion dollars) in the first six months of the year, up 58.2 percent from the same period in 2007…led by a younger generation that is willing to buy on credit and shop online .

Nikkei reported that around 100 Japanese companies are planning to participate in an online shopping mall to be set up on the Chinese web next month. The mall will be the biggest of its kind in China, with initially 20,000 different Japanese products listed, targeting 1st year sales of $45 million…

Nikkei reported that around 100 Japanese companies are planning to participate in an online shopping mall to be set up on the Chinese web next month. The mall will be the biggest of its kind in China, with initially 20,000 different Japanese products listed, targeting 1st year sales of $45 million…

“Online ecommerce and other services will continue to grow as China becomes leading interent nation”

“Online ecommerce and other services will continue to grow as China becomes leading interent nation”


Investment Theme 2 : Branded Niche Consumer Products + Supporting Services in Evolving Retail Value Chain (I)

Leading domestic niche consumer brands-wine, cosmetics, skincare,confectionary, chocolate-( eg. Daobao SOD recently acquired by P&G for USD300M)

Leading Niche Domestic Brands with Strengths in “Mass Market”

Leading Niche Domestic Brands with Strengths in “Mass Market”

Major retailers like Hypermarkets offer channels to quickly help

domestic products build brand and reach a wider market

Major retailers like Hypermarkets offer channels to quickly help

domestic products build brand and reach a wider market

“GREEN” Consumer Products“GREEN” Consumer Products

Following global trend to be “GREEN”- combining consumer

desire to buy product with “GREEN”theme…example “Organic clothing

made from bamboo”

Following global trend to be “GREEN”- combining consumer

desire to buy product with “GREEN”theme…example “Organic clothing

made from bamboo”


Investment Theme 2 : Branded Niche Consumer Products + Supporting Services in Evolving Retail Value Chain (II)

Supporting Services & Channels Supporting Services & Channels

As major retailers outsource support services, potentially will see growth of logistics, warehousing, distribution

services;

As major retailers outsource support services, potentially will see growth of logistics, warehousing, distribution

services;

As manufacturers search for retail channels will drive

growth of new channelseg. Teleshopping, shopping malls + management

services

As manufacturers search for retail channels will drive

growth of new channelseg. Teleshopping, shopping malls + management

services

Recent crisis will see further “Outsourcing” of support services to lower cost and leverage on scale


Investment Theme 3 : Education Services & Healthcare (I)

Education Services Education Services Tremendous growth opportunity in China’s education sector as household disposal income increases..still significantly below HK/Taiwan..Online Education also represents new opportunities

Tremendous growth opportunity in China’s education sector as household disposal income increases..still significantly below HK/Taiwan..Online Education also represents new opportunities

4 For Strong Profit Potential Segments

Profitable and high growth segments in K12, English Education & Adult Education (IT&

Vocational Training)

Profitable and high growth segments in K12, English Education & Adult Education (IT&

Vocational Training)


Investment Theme 3 : Education Services & Healthcare (II)

Medical Products & Healthcare Services

Medical Products & Healthcare Services

-- Total healthcare spending in China is expected to grow at a CAGR of 11% between 2007 and 2012; -- Around 118 Million people are expected to be above 65 years of age in China by 2012, thereby increasing the prevalence of several chronic diseases; -- Middle class projected to have 160 Million people by 2012, reflecting a higher spending on healthcare and opportunities for healthcare companies;

-- Total healthcare spending in China is expected to grow at a CAGR of 11% between 2007 and 2012; -- Around 118 Million people are expected to be above 65 years of age in China by 2012, thereby increasing the prevalence of several chronic diseases; -- Middle class projected to have 160 Million people by 2012, reflecting a higher spending on healthcare and opportunities for healthcare companies;

Leverging on the Chinese Govt’s recent stimulus

focusing on improving the social welfare system in education & healthcare

Medical Products & Devices

•China has the potential to be the largest single country export markets for the U.S.

medical device exporters.

•Currently China is the second largest medical device market in Asia.

•China’s has one of the world’s fastest growing medical device markets (10-15%)

per year.

Medical Products & Devices

•China has the potential to be the largest single country export markets for the U.S.

medical device exporters.

•Currently China is the second largest medical device market in Asia.

•China’s has one of the world’s fastest growing medical device markets (10-15%)

per year.Medical Services Chain & Hospitals

• As the Govt tries to reach rural China with

better healthcare- opportunity to invest in

medical/pharma retail chains; also in major

cities specialist medical service chains

Medical Services Chain & Hospitals

• As the Govt tries to reach rural China with

better healthcare- opportunity to invest in

medical/pharma retail chains; also in major

cities specialist medical service chains

FundInvestorCompany

Deal Size(USD M)

Remarks

Wowo Convenience storesWowo Convenience storesWowo Convenience storesWowo Convenience stores RC CapitaRC CapitaRC CapitaRC Capita $10$10$10$10 Convenience Chain Store in SzechuanConvenience Chain Store in SzechuanConvenience Chain Store in SzechuanConvenience Chain Store in Szechuan

Little SheepHotpotLittle SheepHotpotLittle SheepHotpotLittle SheepHotpot YUMYUMYUMYUM $60$60$60$60 19.99% stake in Little Sheep Hotpot Chain19.99% stake in Little Sheep Hotpot Chain19.99% stake in Little Sheep Hotpot Chain19.99% stake in Little Sheep Hotpot Chain

EllassayEllassayEllassayEllassay CarlyleCarlyleCarlyleCarlyle $20$20$20$20 HighHighHighHigh----end Ladies fashion house withnover 280 end Ladies fashion house withnover 280 end Ladies fashion house withnover 280 end Ladies fashion house withnover 280 retail outletsretail outletsretail outletsretail outlets

Best Roast ChickenBest Roast ChickenBest Roast ChickenBest Roast Chicken Shenzhen Shenzhen Shenzhen Shenzhen VentureVentureVentureVenture

NANANANA 2008 Top ten fast2008 Top ten fast2008 Top ten fast2008 Top ten fast----food chain in China. Revenues food chain in China. Revenues food chain in China. Revenues food chain in China. Revenues over RMB 680Mover RMB 680Mover RMB 680Mover RMB 680M

Chamate Tea HouseChamate Tea HouseChamate Tea HouseChamate Tea House OakOakOakOak $23$23$23$23 60 stores across Bejing, Shanghai, 60 stores across Bejing, Shanghai, 60 stores across Bejing, Shanghai, 60 stores across Bejing, Shanghai, Hangzhou,NanjingHangzhou,NanjingHangzhou,NanjingHangzhou,Nanjing

Jiaguang Mart Co. Jiaguang Mart Co. Jiaguang Mart Co. Jiaguang Mart Co. CarrefourCarrefourCarrefourCarrefour RMB40MRMB40MRMB40MRMB40M Acquisition of hypermarket chainAcquisition of hypermarket chainAcquisition of hypermarket chainAcquisition of hypermarket chain

Xi'an Aijia Commerce Co Xi'an Aijia Commerce Co Xi'an Aijia Commerce Co Xi'an Aijia Commerce Co China China China China ResourcesResourcesResourcesResources

RMB600MRMB600MRMB600MRMB600M Acquisition of supermarket chainAcquisition of supermarket chainAcquisition of supermarket chainAcquisition of supermarket chain

MetersbowenMetersbowenMetersbowenMetersbowen IPOIPOIPOIPO Raised RMB1.38BRaised RMB1.38BRaised RMB1.38BRaised RMB1.38B Casual wear apparel chain with over 2000 stores Casual wear apparel chain with over 2000 stores Casual wear apparel chain with over 2000 stores Casual wear apparel chain with over 2000 stores and overseas outletsand overseas outletsand overseas outletsand overseas outlets

Little Lamb HotpotLittle Lamb HotpotLittle Lamb HotpotLittle Lamb Hotpot IPOIPOIPOIPO Raised Raised Raised Raised HKD780MHKD780MHKD780MHKD780M

WellWellWellWell----known nationknown nationknown nationknown nation----wide hotpot chain invested by wide hotpot chain invested by wide hotpot chain invested by wide hotpot chain invested by 3i3i3i3i

IPOIPOIPOIPO Raised HKD2.55BRaised HKD2.55BRaised HKD2.55BRaised HKD2.55B Leading supermart in Fujian provinceLeading supermart in Fujian provinceLeading supermart in Fujian provinceLeading supermart in Fujian province

Recent Transactions in the Consumer-related Sector (from 2H 2008 onwards)

Value

YonghuiYonghuiYonghuiYonghui


Other Significant Features of China PE Transactions in 2009

Increasing number of PIPE

Deals

Increasing number of PIPE

Deals

Following the financial crisis, valuations of Chinese

companies listed in some exchanges have fallen significantly below fair

valuations

Following the financial crisis, valuations of Chinese

companies listed in some exchanges have fallen significantly below fair

valuations

SGX-listed Chinese Game Equipment

Manufacturer saw its share price

plunge over 95% from IPO price in

20050 seeking PIPI for MBO and

subsequent re-listing in another

exchange

SGX-listed Chinese Game Equipment

Manufacturer saw its share price

plunge over 95% from IPO price in

20050 seeking PIPI for MBO and

subsequent re-listing in another

exchange

Preident 7-11 to open3-7 stores in

Shanghai plans for 300 stores in

3yrs

Preident 7-11 to open3-7 stores in

Shanghai plans for 300 stores in

3yrs

RTODeals

RTODeals

Exits through Trade Sale

Exits through Trade Sale

With the unfavorable environment for IPOs,

Chinese companies seeking funding or re-listing ae

increasingly using the RTO route0 typically into the US

With the unfavorable environment for IPOs,

Chinese companies seeking funding or re-listing ae

increasingly using the RTO route0 typically into the US

As some sector will fac consolidation, domestic M&A may be a viable alternative exit oath for

investments

As some sector will fac consolidation, domestic M&A may be a viable alternative exit oath for

investments

SGX-listed Lady shoe market leader

has seen valuation fall to USD20M

when its 2008 sales improved to over

USD300M

SGX-listed Lady shoe market leader

has seen valuation fall to USD20M

when its 2008 sales improved to over

USD300M

Large foreign retailers with cash and

wishing to now penetrate into the

inner city rural markets are beginning

to buy-out provincial /city retial

chains – Walmart. China Nepstar

pharma, etc

Large foreign retailers with cash and

wishing to now penetrate into the

inner city rural markets are beginning

to buy-out provincial /city retial

chains – Walmart. China Nepstar

pharma, etc



Conclusion

“David Rubenstein, CoFounder Carlyle Group” Oct 2008

Opportunity In China Focused Private Equity Mar2009

Business

Transcript of Opportunity In China Focused Private Equity Mar2009