Chinese Equities and Corporate Governance Issues Nanjing - - PowerPoint PPT Presentation

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Chinese Equities and Corporate Governance Issues Nanjing Hong Kong Taipei December 2011 Pacific Sun Advisors www.pacificsun.com.hk Page 1 DISCLAIMER The information contained in this document has been compiled from,

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Pacific Sun Advisors www.pacificsun.com.hk

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Chinese Equities and Corporate Governance Issues

December 2011

Nanjing Hong Kong Taipei

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Pacific Sun Advisors www.pacificsun.com.hk

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DISCLAIMER

The information contained in this document has been compiled from, or has been based upon, publications, reports and other sources believed by the author to be accurate, sufficient and reliable. While reasonable efforts have been made to ensure the accuracy, sufficiency and reliability of such information, no representation and assurance can be given that all such information is accurate and complete in all material respects and not misleading and all sources

  • f information are reliable.

The delivery of this document shall not in any event create any implication or constitute a representation or warranty that the information contained in this document is true and correct and not misleading as at any time subsequent to the date of this

  • document. No disclosure of any such information shall be made by the recipient to any other

persons in any circumstances except as otherwise compelled by applicable laws. This document does not constitute, and may not be used for the purposes of, an offer or solicitation to anyone in any jurisdiction in which such offer or solicitation is not authorized, or to any person to whom it is unlawful to make such offer or solicitation. The distribution of this document in certain jurisdictions may be restricted and, accordingly, persons into whose possession this document comes are required to inform themselves about, and to observe, such restrictions. If you have any doubt about the contents of this document, you should consult, and obtain independent advice from, your legal, financial and/or other professional advisors.

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Pacific Sun Advisors www.pacificsun.com.hk

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Pacific Sun Advisors

Core Network of 7 Partners / Senior Members with 140 Years Investment and Finance-related Experience in Greater China – ALL Fluent in Mandarin Chinese

First Hand Experience in ALL Chinese Equity Market Cycles Excellent 10+ Year Long Side Investment Track Record Operations are Based Locally – Hong Kong and Nanjing

Registered Investment Advisor in HK and US

Our Edge

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Pacific Sun Advisors www.pacificsun.com.hk

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(Pacific Sun) The China Mantou Fund

  • Long/short fund investing in greater Chinese equities
  • Focus on small and mid-cap companies
  • 8 year track record
  • Suitable for investors that require long/short strategy
  • Current directors include Dr. Marc Faber, David Hui, David Lee,

Andy Mantel, and Chris McDonald

  • Long only fund investing in greater China equities
  • Focus on small and mid-cap companies
  • Attractive 10+ year “long” investment track record
  • Suitable for investors with 5-10 year investment horizon
  • Target size of US$200mn after 3 years
  • Directors include Mark Fischer, Liu Xuezhong, Andy Mantel, and Carl Wegner
  • Launched November 1, 2011

Pacific Sun Greater China Equities Fund

  • Private equity/Pre-IPO fund
  • Focus on companies from attractive industries that will go IPO within

2-3 years of Fund’s investment

  • Target investment capital of US$25mn from Pacific Sun/Zhongtai
  • Target size of US$200mn
  • 1H 2012 launch date

Pacific Sun Zhongtai Private Equity Fund

Investment Products

Pacific Sun Advisors

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Pacific Sun Advisors www.pacificsun.com.hk

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Shanghai Pudong Skyline - August 1992 Shanghai Pudong Skyline – September 2010

Andy Mantel First and Recent Trip to Shanghai

Pacific Sun Advisors

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Pacific Sun Advisors www.pacificsun.com.hk

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With Donald Tsang, Hong Kong’s Chief Executive With ZHU Shanlu, Nanjing’s Secretary Municipal Committee of the CPC

Liu Xuezhong Meeting Government Officials

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Pacific Sun Advisors www.pacificsun.com.hk

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With Steve Forbes With Andy Mantel and other international investors at World Capital Forum, hosted by Zhongtai Group in Nanjing in 2002

Liu Xuezhong Meeting Investors

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Pacific Sun Advisors www.pacificsun.com.hk

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  • Dr. Marc Faber
  • Ph.D., Economics, University of Zurich
  • World-renowned global investor and commentator
  • Founder & Editor of The Gloom, Boom & Doom Report
  • www.gloomboomdoom.com

Chef Martin Yan

  • M.S., Food Science, University of California-Davis
  • Certified Master Chef, a highly respected food consultant, a cooking

instructor and a prolific author

  • Host of over 3,000 cooking shows
  • www.yancancook.com

Senior Advisors

Pacific Sun Advisors

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Pacific Sun Advisors www.pacificsun.com.hk

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Greater China - The Opportunity

Urbanization Roll Out to Support High Economic Growth Domestic Consumption to Spur Economy Internationalization of Renminbi Stronger Renminbi / Hong Kong Dollar / Asian Currencies Investment Choices to Expand Dramatically

Equity Valuations Extremely Low

Major Themes

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Pacific Sun Advisors www.pacificsun.com.hk

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5 10 15 20 25 30 35 2007 2008 2009 (E) 2010 (E) 2015 (E) 2020 (E) % of Global Consumption

US Japan Germany China UK France

China’s domestic consumption is expected to make up 16.4% of total global consumption by 2015 and grow to 21.1% of total global consumption by 2020 (Source: IMF)

Greater China - The Opportunity

Domestic Consumption to Spur Economy

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Pacific Sun Advisors www.pacificsun.com.hk

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* Pacific Sun estimates

October 2011 October 2014 Hong Kong Main Board – including H shares and Red Chips 1,359 1,752 Hong Kong Growth Enterprise Market 60 85 Shanghai A-Share 905 1,230 Shanghai B-Share 53 53 Shenzhen A-Share 1,338 1,760 Shenzhen B-Share 53 53 Taiwan Main Board 743 830 Taiwan Gre Tai Exchange 573 680 Singapore 324 465 Other Asia 312 450 US & Canada 480 730 London 75 124 Other Europe 42 88 Total 6,317 8,300

Greater China - The Opportunity

Investment Choices to Expand Dramatically

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Pacific Sun Advisors www.pacificsun.com.hk

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Geopolitical Events/Relations Excess Liquidity and Inflation Fraud and Corruption Nationalism Social Unrest Not Investing in Greater China*

Greater China - The Opportunity

General Risk Factors

* Greater China is increasingly an independent asset class in itself

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Pacific Sun Advisors www.pacificsun.com.hk

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Pacific Sun Advisors Stock Screening Model

COMPANY TICKER CHINESE NAME Mkt Cap (USD mn) SHARE PRICE PE RATIO PRICE-BOOK RATIO PRICE-SALES RATIO EBITDA/ SHARE EV/EBITDA PRETAX MARGIN ROE DEBT TO EQUITY DIVIDEND YIELD Daily turnover (USD mn) CONSUMER STAPLES - FOOD PRODUCTS

Beijing Sanyuan Foods Co Ltd 600429 CH 三元股份 1264.28 9.26 98.03 4.65 3.07 ‐0.02 ‐ 2.75 3.00 28.68 ‐ 16.77 Bright Dairy & Food Co Ltd 600597 CH 光明乳業 1388.77 8.58 45.78 3.82 0.89 0.07 ‐ 2.53 8.76 35.85 ‐ 14.83 Century Sunshine Group Holdings Ltd 8276 HK 世紀陽光 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 16.45 6.27 13.76 ‐ ‐ Chaoda Modern Agriculture Holdings Ltd 682 HK 超大現代農業 1301.17 3.03 2.10 0.34 0.04 0.20 3.22 52.52 19.26 0.07 1.56 10.41 China Foods Ltd 506 HK 中國糧油國際 2124.84 5.92 38.67 2.78 0.83 0.05 14.50 4.41 7.48 25.49 1.11 2.23 China Green Holdings Ltd/Bermuda 904 HK 綠色食品 613.59 5.40 6.87 1.22 1.84 0.14 5.41 36.36 20.41 70.40 2.28 3.07 China Starch Holdings Ltd 3838 hk 中國澱粉 349.16 0.47 13.79 1.57 0.89 0.01 9.91 7.58 13.41 2.57 1.11 1.31 China Yurun Food Group Ltd 1068 HK 雨潤食品 6355.08 27.25 17.23 3.42 2.19 0.23 14.43 13.63 23.92 26.69 1.57 32.97 COFCO Tunhe Co Ltd 600737 CH 新疆屯河 1613.42 10.40 ‐ 3.86 3.27 0.04 ‐ ‐1.44 ‐1.96 157.19 ‐ 16.45 CP Pokphand Co 43 HK 卜蜂國際 1791.59 0.93 6.70 3.07 0.46 0.02 9.97 9.39 46.20 53.21 1.53 0.87 Danhua Chemical Technology Co Ltd 900921 CH 大盈股份 1658.84 0.91 335.58 3.59 14.78 0.01 233.97 0.16 1.07 108.14 ‐ 0.91 First Natural Foods Holdings Ltd 1076 HK 第一天然食品 44.97 0.30 ‐ ‐ 2.02 0.00 186.89 ‐2.19 ‐ ‐ ‐ ‐ Four Seas Mercantile Hldg 374 HK 四洲集團 117.01 2.33 11.95 0.89 0.38 0.04 8.64 4.26 8.70 80.18 3.07 0.02 Global Bio‐Chem Technology Group Co Ltd 809 HK 大成生化 943.66 2.26 19.38 0.84 0.67 0.07 8.20 5.20 4.10 96.31 0.85 7.33 Global Sweeteners Holdings Ltd 3889 hk 大成糖業 237.95 1.61 20.24 0.96 0.54 0.03 7.76 3.72 5.04 45.81 ‐ 2.41 Golden Resources Development International Ltd 677 HK 金源米業 101.81 0.51 7.11 0.76 1.00 0.01 4.06 25.05 19.89 4.01 4.36 0.16 Haikou Agriculture & Industry Co 000735 CH 羅牛山 955.89 7.04 203.90 3.89 6.90 0.01 ‐ 3.88 1.86 39.51 ‐ 17.52 Henan Lianhua Gourmet Powder Co 600186 CH 蓮花味精 942.09 5.75 ‐ 4.77 2.12 ‐0.01 ‐ 0.82 1.34 65.32 ‐ 26.82 Henan Shuanghui Investment & Development Co Lt 000895 CH 雙匯發展 5634.53 60.27 32.16 9.91 0.99 ‐0.38 ‐ 4.48 34.24 0.32 ‐ 38.53 Heng Tai Consumables Group Ltd 197 HK 亨泰消費品 378.43 0.85 11.17 0.87 1.03 0.02 9.41 9.91 9.24 9.92 0.81 1.81 Inner Mongolia Pingzhuang Energy Co Ltd 000780 CH 草原興發 2386.33 15.25 22.22 3.92 4.66 0.15 ‐ 24.23 19.54 0.00 ‐ 38.38 Inner Mongolia Yili Industrial 600887 CH 伊利股份 4466.39 36.22 36.27 6.64 0.92 0.22 ‐ 2.89 20.29 70.67 ‐ 39.17 Pacific Andes International Holdings Ltd 1174 HK 太平洋恩利 444.92 1.13 8.91 0.60 0.29 0.09 7.81 9.99 10.10 145.20 3.19 0.82 People's Food Holdings Ltd PFH SP 大眾食品 712.20 0.78 24.89 0.89 0.32 0.07 6.86 2.33 4.80 13.37 ‐ 0.31 Shandong Denghai Seeds Co Ltd 002041 CH G登海 1113.24 20.50 42.14 7.17 8.31 0.18 ‐ 41.39 24.66 0.00 ‐ 22.69 Shandong Zhonglu Oceanic Fisheries Co Ltd 200992 CH 中魯 200.62 3.96 24.12 2.20 1.81 0.03 ‐ 7.50 9.46 10.03 ‐ 0.42 Shanghai Dajiang Group 900919 CH 大江 618.06 0.43 148.16 9.69 2.67 ‐0.00 ‐ 3.08 6.75 211.42 ‐ 1.37 Shanghai Dajiang Group 600695 CH 大江 618.06 9.21 364.90 34.04 8.42 ‐0.00 ‐ 3.08 6.75 211.42 ‐ 21.54 Sichuan New Hope Agribusiness Co Ltd 000876 CH 新希望 2525.86 19.67 25.16 4.00 1.97 0.04 ‐ 10.73 15.71 80.72 ‐ 19.00 Tingyi Cayman Islands Holding Corp 322 HK 康師傅控股 16986.53 23.65 34.16 8.72 2.34 0.17 13.10 11.18 29.04 34.82 1.75 19.66 Uni‐President Enterprises Corp 1216 TT 統一企業 6126.73 41.00 16.08 2.51 3.59 0.02 75.94 22.72 16.27 34.63 3.24 10.82 United Food Holdings Ltd UFH SP 聯合食品控股 58.76 0.07 10.19 0.22 0.09 0.02 2.83 ‐ 2.19 0.00 ‐ 0.02 V V Food & Beverage Co Ltd 600300 CH 維維股份 1410.95 5.47 38.71 3.73 1.31 0.03 ‐ 5.45 6.26 45.98 ‐ 13.15 Vedan International Holdings Ltd 2317 HK 味丹國際 123.31 0.63 ‐ 0.47 0.37 0.02 4.04 0.58 ‐0.55 17.09 2.91 0.06 Want Want China Holdings Ltd 151 HK 旺旺集團 12200.45 7.18 34.06 11.36 5.43 0.04 22.63 19.73 34.77 60.00 2.58 13.31 Xinjiang Hops Co Ltd 600090 CH 啤酒花 688.50 12.13 102.58 12.17 4.74 0.08 ‐ 16.18 11.51 22.12 ‐ 32.07 Xiwang Sugar Holdings Co Ltd 2088 HK 西王糖業 257.96 1.99 7.72 0.85 0.50 0.06 7.74 6.61 12.21 79.62 ‐ 1.24 Yantai North Andre Juice Co 8259 HK 安德利果汁 ‐ ‐ ‐ ‐ ‐ ‐ ‐ 5.08 4.18 75.58 ‐ ‐

Pacific Sun Greater China Equities Fund

Stock Screening Model – Sub-sector Sample

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Pacific Sun Advisors www.pacificsun.com.hk

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Offering Period : 4Q 2011

  • Min. Investment

: US$100,000 Management Fee : 1.75% per annum Performance Fee : Class A 0%; Class B 8.88% high on high Dealing : Monthly Lock-up Period : 6 months Redemption feature : 10% monthly limit Financial Year-end : 31 December Custodian : DBS Bank Ltd, Hong Kong Branch Administrator : Apex Fund Services Auditor : Deloitte & Touche Legal Advisor : Bingham

Pacific Sun Greater China Equities Fund

Fund Details

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Pacific Sun Advisors www.pacificsun.com.hk

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Investment Manager : Pacific Sun Advisors Unit 605, Bank of America Tower 12 Harcourt Road Central, Hong Kong Founder & CEO : Andy Mantel (andymantel@pacificsun.com.hk) Investor Relations : Candy Tse (candytse@pacificsun.com.hk) Email : info@pacificsun.com.hk Telephone : +852 2525-2010 Facsimile : +852 2525-2090 Website : www.pacificsun.com.hk

Pacific Sun Advisors

Contact Information