PreIPO Funding for Chinese Companies who are looking to list overseas.

1
Pre-IPO Funding for Chinese Companies who are
looking to list overseas.
?????? ALBRIGHT CAPITAL
2
What is Pre-IPO Funds?
Pre-IPO funds are funds that will invest in
companies that qualify and will go for listing in
the near future.
?????? ALBRIGHT CAPITAL
3
Why do Chinese Companies need pre-IPO
funds?
All PRC private companies that are going for
overseas listing requires pre-IPO funding. The
funds restructure the PRC Company into a foreign
overseas company which will make them eligible
for overseas listing.
?????? ALBRIGHT CAPITAL
4
Pre-IPO Funding

• What are the criteria for PRC companies to
  be eligible for pre-IPO funds?
• PAT about RMB25 million
• good management
• at least 3 years of track record
• growing industry
• good net profit margin of at least 10
• businesses that are easy to understand.
• Preferably business that has a monopoly in the
  industry or have a high bearer of entry.

?????? ALBRIGHT CAPITAL
5
Who are these Pre-IPO investors and what
are their targets?

• Investors are financial investors and not
  strategic investors.
• They look to exit their investment within 24
  months.
• They typically look for returns of more than 30
  pa.

?????? ALBRIGHT CAPITAL
6
Why do some Chinese companies want to list
overseas?

• Speed, it takes 9 months onwards to list a
  company overseas. Capital is raised quicker,
  which is essential for Companies to expand their
  operation.
• Listing overseas is a form of advertisement in
  that region, leading to a creation of a new
  market.

?????? ALBRIGHT CAPITAL
7
Who is in control of the company after listing?
The PRC owners of the companies will remain the
majority share holders. The control of the
listed companies are in the hands of the PRC
owners.
?????? ALBRIGHT CAPITAL
8
What is the typical structure for
overseas listing?
?????? ALBRIGHT CAPITAL
9
Register 2 companies
Listco
EJV
?????? ALBRIGHT CAPITAL
10

Investor
Listco
SGX
Businesses Assets

EJV
Businesses Assets

PRC
?????? ALBRIGHT CAPITAL
11
How much can we raised?

• Enterprise A Involved in the distribution of
  natural gas.
• Year 2004 PAT RMB80 million.
• NTA RMB100 million.
• Investors Invest RMB99 million.
• Agreement between enterprise A and investor to
  sell shares at 4 times PE.
• How much shares will investor owns.
  

?????? ALBRIGHT CAPITAL
12
How much can we raised?

• How much shares will investor owns?
• ? RMB80 mil 4
  RMB99 mil
• ( shares) (PAT)
  (Agreed PE) (Investment)
• gt ? 99 ( 80 4 ) 100
  30.94

?????? ALBRIGHT CAPITAL
13
Listco
RMB 99 mil
1 PRC
EJV
Businesses Assets
RMB99 mil
PRC
?????? ALBRIGHT CAPITAL
14
Listco
RMB 99 mil
1 PRC
Businesses Assets
RMB99 mil
PRC
?????? ALBRIGHT CAPITAL
15
Listco
Investor30.94
PRC owner69.06
25
30.94 X 0.75 23.205
69.06 X 0.75 51.795
?????? ALBRIGHT CAPITAL
16
PRC owner
Investor
Public
?????? ALBRIGHT CAPITAL
17
If shares IPO at 10 times PE
Investor23.205
PRC owner51.795
New shares--25
RMB410,216,400
RMB183,783,600
RMB198,000,000
( 80mil x 10 x 99 x 51.795 ) ( 80mil x
10 x 99 x 23.205 ) ( 80mil x 10 x 99 x 25 )

?????? ALBRIGHT CAPITAL
18
Why is it beneficial to go listing?
?????? ALBRIGHT CAPITAL
19
Benefit -- Monetary

• PRC owner
• --- Shares value RMB410,216,400
• --- Money due in 3 years time RMB99,000,000
• Investor
• --- Shares value
  RMB183,783,600
• --- Money invested -
  RMB99,000,000
• --- Profit
  RMB84,783,600
• Businesses
• --- Additional Capital RMB198,000,000

?????? ALBRIGHT CAPITAL
20
Benefit Non-Monetary

• Expansion
• --- geographical
• --- size of business
• Less reliance on bank borrowings
• There is capital or issuance of new shares to
  acquire other companies
• Increases the wealth of the owners
• Maintain and/or increase their market share
• Status and improve credit standing

?????? ALBRIGHT CAPITAL
21
Brief overview of the Singapore market
?????? ALBRIGHT CAPITAL
22
?????? ALBRIGHT CAPITAL
23
21.33
0.14
2.94
4.71
0.29
5.89
3.09
6.03
35.73
5.29
14.56
?????? ALBRIGHT CAPITAL
24
11.73
0.90
1.80
2.71
1.80
0.90
3.41
4.51
51.69
3.61
16.94
?????? ALBRIGHT CAPITAL
25
(No Transcript)
26
?????? ALBRIGHT CAPITAL
27
IPO Exercise Duration

• IPO exercise generally duration is between 9
  to 12 months

?????? ALBRIGHT CAPITAL
28
Who is Albright Capital Pte Ltd?

• We are investment bankers, who have more than 18
  years of experience in raising funds for
  companies.
• We represent high net worth individuals in
  seeking out potential companies, it., we
  represent Capital.

?????? ALBRIGHT CAPITAL