聯(lián)合利華項(xiàng)目建議書（英文版）ppt課件

1、April 19, 2002Strictly private & confidentialUnilever (China) LimitedA share market workshopPresentation to3850AAR and CITICS Team Project Leader* Attendees of today,s workshopTony MokHead of ABN AMRO Consumer Industries Group, AsiaInvestment Banking & CoverageHassan El Nahas* ABN AMRO Consumer Indu

2、stries Group, AsiaPan Muping*Chief Rep of N M RothschildJason RynbeckDirector of ABN AMRO Corporate Finance Consumer Group, AsiaECMProject LeaderPu JianBoard Director, Vice President of CITICSInvestment BankingRichard Heald*Joint CEO of AAR GlobalKola Luu*Head of AAR Greater ChinaXiaomei Liu*AAR Chi

3、na TeamWang ChangqingGeneral Manager of Investment Banking, ShanghaiJoe Chen*Special assistant to the president of CITICSMao Yanmin*Senior Manager of Investment Banking, ShanghaiLiu Kebin*Senior Manager of Investment Banking, ShanghaiLiu ZhenManager of Investment Banking, ShanghaiChang Liang*Manager

4、 of Investment Banking, Shanghai1Table of contents1.Introduction to AAR and CITIC Securities 2.Update on domestic and international equity markets for China issues3.Valuation approach and pricing mechanism for A share IPOs and sector valuation in Asia 4.Update on foreign company listing in A share m

5、arket - Direct listing by MNCs and China 5.A share listing procedure 6. Role of advisors Appendices:I.AAR credentialsII.Citic Securities CredentialsIII.Recent A share offering case studiesIV.Valuation of comparable companiesV. Comparison of A share market and Hong Kong market21.Introduction to ABN A

6、MRO Rothschild (AAR) and CITIC Securities (CITICS)Introduction to ABN AMRO RothschildDrawing on the full financial resources of its parent groups, ABN AMRO Rothschild offers world class equity capital markets expertiseAmongst the worlds largest privately-owned banks36 offices in 27 countriesEstablis

7、hed and highly regarded skills in handling merger and acquisition, corporate advisory, privatisation and project finance assignmentsStrong specialist industry sector teams based world-wideWorld-wide retail and wholesale banking operations employing over 109,000 personnelGroup capital of EUR 34.0 bil

8、lion. Total assets of EUR 597.4 billionMembership of 47 stock exchanges world-wide including London, New York and NASDAQOver 880 equity research, sales and trading personnelDedicated equities distribution personnel located in the US to sell international offerings into the USEstablished corporate fi

9、nance skills and relationshipsInvestment banking, capital strength and global equity distribution powerUnrivalled equity capital markets expertise+=Top 5 European equity capital markets houseTop 10 international equity capital markets houseOver 160 dedicated equity capital markets specialists locate

10、d in key regional centres globallyEstablished track record in key sectors and regions4Strong rankings in the Q1 2002 bookrunner league tablesAAR teams continue to be active in the international equity capital marketsTop Bookrunners of European Equity Issues, Q1 2002Top Bookrunners and Joint Lead Man

11、agers of International Equity Issues, Q1 20025No. 1 ranked in key European marketsTop Global Co-ordinators, European equity offerings, H2 2001Source Capital Data Bondware, global co-ordinator roles only, excludes rights issues and the domestic tranches of international offeringsIn H2 2001, ABN AMRO

12、Rothschild was the No. 1 ranked Global Co-ordinator in European markets6AAR has pioneered and completed 30 transactions with total size of US$2,133m in ChinaHG / NMR / AAR Bookrunner in Chinas Equity & Equity Linked transactions since 1991Pioneered B share IPO - China Southern GlassFirst H share CB

13、- Qingling MotorsFirst GEM listing upgrade to HK main board with placement7ABN AMROs research strength in HK / China and Consumer sector Respected by investorsAAR has top tier Asian consumer research team to provide in-depth coverageJeremy Sutch-Head of HK Research /Head of Consumer/RetailKalina Ip-

14、Head of China & StrategyAnton Kwang - Properties Eddie Wong-Asian Chief EconomistCheuk Wan Fan-China Strategy & Red ChipsOsbert Tan-Airlines/Transport/LogisticsAndrew Leeming-Head of Asian BanksAdrian Fung -Utilities & Toll roadsMario Zhu-Electronics / ConsumersLiana Yung-Technology/ Internet/ Softw

15、areMichele Mak-Technology/HardwareIn addition to in-depth individual company analysis, the team also produces periodic publicationsDaily flash notesWeekly equity reviewQuarterly sector, economic and strategy reportsThe HK/China team8Introduction to CITIC Securities Co., Ltd (CITICS)China Internation

16、al Trust & Investment Corporation (CITIC)CITIC Financing HoldingCITIC Industrial BankCITIC Ka Wah Bank CITIC Securities Co., LtdChangseng Fund managementCITIC Prudential Life InsuranceCITIC Chinas largest financing and investment groupCITIC Financing Holding ,which will hold all the financing subsid

17、iaries in CITIC, is to be established soonAs of end of 2000total assets were RMB 358.6 Billionnet assets were RMB 39.6 Billiontotal income was RMB 32.5 Billionnet profit was RMB 2,500 MillionThe largest Financing and investment corporation in China, with global presenceCITIC Securities Co., LtdCITIC

18、 Group10Corporate Finance CommitteeInvestment banking (, Shanghai, Shenzhen and Qindao)Fixed incomeSales (equivalent to Equity Capital Markets)M&ARestructuring & advisoryCITICS a major bracket firm in the investment banking industry in ChinaRapidly growing business with solid track recordNotes: the

19、blue bars represent net assetCore valueServiceSatisfactionsSmartSafetySuccessAsset (RMB 100 million)Profit (RMB 100 million)Asset managementBrokerage businessProprietary trading11Leading positions in equity offering and sponsorship in recent yearsKey transactions1205001,0001,5002,0002,50019981999200

20、02001RMB millionNo.1 bond house in domestic corporate bond marketUnparalleled corporate bond issue experienceBond issue in China (1998-2001)Amount underwritten by CITIC132. Update on China domestic and international equity market China total issuance is reaching US$50 billion .* including dual liste

21、d H share and Red Chip offerings which amounted to US$30 billion for the periodChina Issues (1991 - 2001) (US$m)*391631212316671422211Number of issues*Top 3 dealsChina Mobile US$4.2bnChina Southern Airline US$700mJiansu Expressway US$490mTop 3 dealsChina Mobile follow-on & CB US$7.6bnChina Unicom IP

22、O US$5.7bnSinopec IPO U$3.5bn15A share new issue already exceeds international offeringChina new issuance pipelineThe second largest market in Asia by market capitalisation (US$500bn vs Hong Kongs US$450bn), only next to TokyoThere are 1,100 + companies listed in Shanghai Stock Exchange and Shenzhen

23、 Stock ExchangeA share market is highly fragmented, the top 10 stocks account for only 12% of total market capitalization vs. 33 Hang Seng Index stocks account for over 80% of the total market cap of HK marketMajor quality corproates are beocming increasingly the focus of the market A share market h

24、as become major fund raising marketplace.and also the fastest growing market in the worldIn last 5 years70% of China new issuance were completed in the domestic markets (in terms of dollar volume)Total domestic transactions amounted to US$100bn vs US$50bn for international offeringsA share market ha

25、s demonstrated its capacity to absorb large issues such as China Merchant Bank (US$1.32bn, Apr 02), Huaneng Power (US$335m, Nov 01) and Sinopec (US$1.43bn, Jul 01)16Implication of liberalization of A share market17Change percentage 2002 to dateChina market has underperformed in last 6 monthsSource B

26、loombergChange percentage since “91118A share markets have recovered since the beginning of the year after significant decline in 2H2001Market relative performance (since 2001)A share volume (since 2001)Market became bullish on positive economic data and earnings prospectsGovernments announcement of

27、 crack down on illegal funds financed by bank credit to the stock marketGovernment decided to suspend the sale of state-owned shares Announcement of reduction of stamp duty of securities tradingMarket was speculating that no further market boosting policy measures would be implemented in near term a

28、nd worried about over massive overhang of Sinopec A sharesShanghai ASource Bloomberg19New issue performance - China IPOs since 2001International: post IPO performance.mixed Domestic: post IPO performancestrong.20Current valuation for China stocks in HK market ABN AMRO top picks21A share market valua

29、tion is still attractive to potential issuerComparison with other marketsAveraged P/E of 50 x plusBubbles will be squeezed out as more large quality companies being listed and the market becomes more regulatedHigh level of valuation due to scarcity of stocks or other investment instrumentsAn estimat

30、ed RMB500bn corporate and institutional funds and RMB800bn private funds are available to the primary market (i.e. IPO subscriptions) - in addition, investor leverage has been common placeHeavy retail participation means the market is mainly driven by momentum / sentiment rather than investment rati

31、onale“False high level of valuations for some stocks due to market speculation / manipulation and lack of short-sell mechanismValuation has come off considerably since Julys Government crackdown on illegal funds financed by bank credit to speculate in the stock marketIt is widely anticipated the val

32、uation level of A share market will gradually decline over period when capital market structural reform advances and valuation bubble diminishesHowever, premium valuation would still be achievable for those better - run companies with better assets although the IPO pricing is de facto controlled by

33、CSRC with a cap of 20 x historical PE ratioSource Bloomberg22Liberalization in Chinas capital marketCDR programmeAim to introduce respectable international companies including Red Chip companies to domestic investors Priority is expected to be given to Red Chip companiesA number of Red Chip companie

34、s are in the process of preparing CDR issues and some of MNCs have also showed interestThe CDR proposal is being reviewed by the State Council. However, no timetable is givenOne of the major issues remains the foreign exchange control by the governmentQDII A share listingAim to introduce good intern

35、ational companies including MNCs and large Taiwan and Hong Kong invested companies to Chinas equity market Priority is expected to be given to MNCs China operation companies, followed by large Taiwan and Hong Kong invested companies. Eventually, MNCs parent companies could also be allowed to list in

36、 A share market once RMB becomes fully convertible into foreign currencyCSRC has already announced the detailed listing requirements (see section 4) A number of MNCs China operation companies are considering the A share listing.Aim to allow qualified Chinese institutional investors to invest in over

37、seas marketsHong Kong government is very keen on this proposal as they expect Hong Kong would benefit greatly in terms of capital flow and market sentimentThe QDII proposal is being reviewed by the State Council. However, no timetable is givenOne of the major issues remains the foreign exchange cont

38、rol by the government23Alcatel ChinaEricsson ChinaKodak China Motorola ChinaProcter & Gamble ChinaUnilever ChinaPotential MNC (with China operation) candidates for A share listingCompanySectorTelecom equipmentTelecom equipmentPhoto relatedTelecom equipmentConsumerConsumerHousehold names and MNCs are

39、 likely candidates to go to the A share market. However, most of above mentioned companies have not started the process yetWith a view to improving the overall quality of A share companies, CSRC has already started talking to some JVs and solely foreign owned companies in order to obtain their views

40、/ feedback on this new policy We expect more MNCs would join the party as CSRC announced the detailed A share listing implementation rules for foreign enterprises by issuing the notification on “special requirements on the content and format of prospectus for foreign invested companies on 1 April, 2

41、002243.Valuation approach and pricing mechanism for A share IPOs and sector valuation in Asia and ChinaValuation approach and pricing mechanism in A share marketBottom line: Valuation must exceed NAV (book value) per share as determined by MOF formula for SOEsMethodologies - all the approaches commo

42、nly used in international marketsDCFMultiples of comparable companiesPEEV / EBITDA and P/CFDividend yieldPricing mechanismSecondary market valuation benchmarkMarket expectation of IPO discount (as appropriate)Subject to CSRCs approvalunder approximately 20 x P/E (historical)under 2 x NAV per share26

43、Key valuation driversKey drivers of valuationKey valuation drivers: corporate specificsEarnings track record Track record of managementGrowth potentialCompetitive advantages and market position relative to peer group / competitors Focus on core businessIndustry outlookMarket outlook Opportunity for

44、business development and earnings growthIndustry consolidation opportunitiesChina specificsDividend policy: a balance between cash dividend and new Size of free float and market cap: the greater the size, the lower the valuationOther factorsMarket sentimentRegulatory guidelines27P/E is the over ridi

45、ng methodology for the A share marketDCFA principal pricing method used by investors to value companiesBased on growth rate of the market and market share and investors view of appropriate discount rate/cost of capitalInvestor assumptions will vary (particularly on prices and discount rates), depend

46、ing on information disclosureCommon valuation approach for both domestic institutional funds and retail investorsUse historical data as no research forecast available A share index used as benchmarkP/ECertain investors will consider dividend yield (mainly retail investors and income funds)Dividend y

47、ieldUsed as cross-check with DCF valuationUse historical data as no research forecast availableAlso used for comparison with peer groupEV/EBITDA and P/CFComparison with comparable publicly listed companies in A share and international marketsAnalysis of key operational and financial differences betw

48、een comparables will drive rating differentialsComparable public companiesValuation approach28Pricing process in A share marketSince 2000, the following pricing process has been adoptedStep 1Step 2Step 3Submit a pricing analysis report to CSRCSet price range for marketingPricing upon the offer close

49、Written by underwriter/lead managerKey contentsmethodology discussionpreliminary pricing rangeSend the summary of draft prospectus (no mention of company name allowed by CSRC regulation) to institutional investors and brokersPre-marketing to institutional investors (2-3 days)Set an updated price ran

50、ge based on preliminary feedback from institutional investors Send the updated price range to CSRC Start the offering once CSRC issues a go ahead letter Distribute prospectus with the price range to institutional investors and brokersPress conferenceroadshow and internet bookbuilt, including institu

51、tions and public (2-3 days)Pricing based on the order book29Consumer related equity offeringsConsumer related offerings have not been activeAverage issue size is US$75m and US$90m for NJA and A shares market respectivelyWith Unilevers brandname and scarcity value, Unilever China IPO should be very w

52、ell receivedConsumer related equity offering30Performance of Unilever Asian subsidiariesPT Unilever Indonesia and Hindustan Lever are the two Unilever subsidiaries listed in AsiaPT Unilever has outperformed Jakarta composite index (JCI) by 30% since 2001 and its current market cap is US$1,710 mln (R

53、p21,200 per share) Hindustan Lever has outperformed Sensex Index in India, reflecting the defensive nature of strong brand name company. Hindustan Levers current market cap is US$10,013.8m (INR 222.55 per share)Relative Performance: UNVR vs JCI Index since 2001Relative Performance: HLVR vs SENSEX si

54、nce 2001IPO Aug 1991IPO Jan 199131Current valuation of Asian consumer/food & beverage/ personnel care comparablesValuation summary: PE02 ranging from 12x to 32x We attempt to use 2 criteria to select potential Asian comparables in the similar sectors in which Unilever China operatesMNCs local busine

55、sses listed in local marketsOverseas listed companies which mainly operate in ChinaSelected Unilever sister companiesSelected food companiesNestle (Malaysia) BhdUni-President Enterprises Co., LimitedTingyi (Cayman Islands) Holding CorpUniversal Robina CorporationWant Want Holdings LimitedCadbury Ind

56、ia LtdNestle India LtdDairy Farm International Holdings LtdSelected beverage/brewing companiesTsingtoo Brewery Company LtdFosters Group LtdGuiness Anchor BHDCarlsberg Brewery Malaysia BHDSan Miguel CorporationVitasoy International LtdPT Unilever Indonesia TbkHindustan Lever Ltd32Valuation of selecte

57、d listed Chinese companies in similar sectorsValuation summaryHistorical PE ratio is reaching 70 x.Relatively high valuation is due torelative smaller size of the consumer stocksretail driven334. Update on foreign company listing in A share market - Direct listing by MNCForeign invested companies ar

58、e now allowed to list in the A share marketsCSRC has announced detailed requirements on A share listing of foreign invested companies A recent CSRC opinion paper stated that foreign enterprises are allowed to be listed in either A or B Share Markets if the following requirements are met:Following th

59、e relevant foreign investment and ownership restrictions on different industry sectors Complying with PRC Company OrdinanceMeeting minimum listing requirementsPassing the annual foreign enterprise review for 3 consecutive years prior to the listing Maintaining foreign ownership of no less than 10% a

60、fter the listing (however, to maintain foreign invested companys status for tax implications, a minimum 25% of foreign ownership is required)Maintaining same minimum domestic ownership after the listing, if applicableFiling the listing with MOFTEC after the listing35Regulatory overview for foreign i