联合利华项目建议书课件

Strictlyprivate&confidentialUnilever(China)Limited

AsharemarketworkshopPresentationto3850Strictlyprivate&confidentiaAARandCITICSTeamProjectLeader*Attendeesoftoday,sworkshopTonyMok

HeadofABNAMROConsumerIndustriesGroup,AsiaInvestmentBanking&CoverageHassanElNahas*

ABNAMROConsumerIndustriesGroup,AsiaPanMuping*

ChiefRepofNMRothschildJasonRynbeck

DirectorofABNAMROCorporateFinanceConsumerGroup,AsiaECMProjectLeaderPuJian

BoardDirector,VicePresidentofCITICSInvestmentBankingRichardHeald*

JointCEOofAARGlobalKolaLuu*

HeadofAARGreaterChinaXiaomeiLiu*

AARChinaTeamWangChangqing

GeneralManagerofInvestmentBanking,ShanghaiJoeChen*

SpecialassistanttothepresidentofCITICSMaoYanmin*

SeniorManagerofInvestmentBanking,ShanghaiLiuKebin*

SeniorManagerofInvestmentBanking,ShanghaiLiuZhen

ManagerofInvestmentBanking,ShanghaiChangLiang*

ManagerofInvestmentBanking,Shanghai1AARandCITICSTeamProjectLeTableofcontents 1. IntroductiontoAARandCITICSecurities 2. UpdateondomesticandinternationalequitymarketsforChinaissues

3. ValuationapproachandpricingmechanismforAshareIPOsandsectorvaluationinAsia 4. UpdateonforeigncompanylistinginAsharemarket-DirectlistingbyMNCs

andChina 5. Asharelistingprocedure

6. Roleofadvisors Appendices: I. AARcredentials II. CiticSecuritiesCredentials III. RecentAshareofferingcasestudies IV. Valuationofcomparablecompanies V. ComparisonofAsharemarketandHongKongmarket2Tableofcontents 1. Introduct1. IntroductiontoABNAMRORothschild(AAR)andCITICSecurities(CITICS)1. IntroductiontoABNAMRORoIntroductiontoABNAMRORothschildDrawingonthefullfinancialresourcesofitsparentgroups,ABNAMRORothschildoffersworldclassequitycapitalmarketsexpertiseAmongsttheworld’slargestprivately-ownedbanks36officesin27countriesEstablishedandhighlyregardedskillsinhandlingmergerandacquisition,corporateadvisory,privatisationandprojectfinanceassignmentsStrongspecialistindustrysectorteamsbasedworld-wideWorld-wideretailandwholesalebankingoperationsemployingover109,000personnelGroupcapitalofEUR34.0billion.TotalassetsofEUR597.4billionMembershipof47stockexchangesworld-wideincludingLondon,NewYorkandNASDAQOver880equityresearch,salesandtradingpersonnelDedicatedequitiesdistributionpersonnellocatedintheUStosellinternationalofferingsintotheUSEstablishedcorporatefinanceskillsandrelationshipsInvestmentbanking,capitalstrengthandglobalequitydistributionpowerUnrivalledequitycapitalmarketsexpertise+=Top5EuropeanequitycapitalmarketshouseTop10internationalequitycapitalmarketshouseOver160dedicatedequitycapitalmarketsspecialistslocatedinkeyregionalcentresgloballyEstablishedtrackrecordinkeysectorsandregions4IntroductiontoABNAMRORothsStrongrankingsintheQ12002bookrunnerleaguetablesAARteamscontinuetobeactiveintheinternationalequitycapitalmarketsTopBookrunnersofEuropeanEquityIssues,Q12002TopBookrunnersandJointLeadManagers

ofInternationalEquityIssues,Q120025StrongrankingsintheQ12002No.1rankedinkeyEuropeanmarketsTopGlobalCo-ordinators,Europeanequityofferings,H22001SourceCapitalDataBondware,globalco-ordinatorrolesonly,excludesrightsissuesandthedomestictranchesofinternationalofferingsInH22001,ABNAMRORothschildwastheNo.1rankedGlobalCo-ordinatorinEuropeanmarkets6No.1rankedinkeyEuropeanmAARhaspioneeredandcompleted30transactionswithtotalsizeofUS$2,133minChinaHG/NMR/AARBookrunnerinChina’sEquity&EquityLinkedtransactionssince1991PioneeredBshareIPO-ChinaSouthernGlassFirstHshareCB-QinglingMotorsFirstGEMlistingupgradetoHKmainboardwithplacement7AARhaspioneeredandcompleteABNAMRO’sresearchstrengthinHK/ChinaandConsumersectorRespectedbyinvestorsAARhastoptierAsianconsumerresearchteamtoprovidein-depthcoverageJeremySutch - HeadofHKResearch/

HeadofConsumer/RetailKalinaIp - HeadofChina&StrategyAntonKwang - PropertiesEddieWong - AsianChiefEconomistCheukWanFan - ChinaStrategy&RedChipsOsbertTan - Airlines/Transport/LogisticsAndrewLeeming - HeadofAsianBanksAdrianFung - Utilities&TollroadsMarioZhu - Electronics/ConsumersLianaYung - Technology/ Internet/SoftwareMicheleMak - Technology/HardwareInadditiontoin-depthindividualcompanyanalysis,theteamalsoproducesperiodicpublicationsDailyflashnotesWeeklyequityreviewQuarterlysector,economicandstrategyreportsTheHK/Chinateam8ABNAMRO’sresearchstrengthiIntroductiontoCITICSecuritiesCo.,Ltd(CITICS)IntroductiontoCITICSecuritiChinaInternationalTrust&InvestmentCorporation(CITIC)CITICFinancingHoldingCITICIndustrialBankCITICKaWahBankCITICSecuritiesCo.,LtdChangsengFundmanagementCITICPrudentialLifeInsuranceCITIC–China’slargestfinancingandinvestmentgroupCITICFinancingHolding,whichwillholdallthefinancingsubsidiariesinCITIC,istobeestablishedsoonAsofendof2000totalassetswereRMB358.6BillionnetassetswereRMB39.6BilliontotalincomewasRMB32.5BillionnetprofitwasRMB2,500MillionThelargestFinancingandinvestmentcorporationinChina,withglobalpresenceCITICSecuritiesCo.,LtdCITICGroup10ChinaInternationalTrust&InCorporateFinanceCommitteeInvestmentbanking(Beijing,Shanghai,ShenzhenandQindao)FixedincomeSales(equivalenttoEquityCapitalMarkets)M&ARestructuring&advisoryCITICS–amajorbracketfirmintheinvestmentbankingindustryinChinaRapidlygrowingbusiness……withsolidtrackrecordNotes:thebluebarsrepresentnetassetCorevalueServiceSatisfactionsSmartSafetySuccessAsset(RMB100million)Profit(RMB100million)AssetmanagementBrokeragebusinessProprietarytrading11CorporateFinanceCommitteeCITLeadingpositionsinequityofferingandsponsorshipinrecentyearsKeytransactions12Leadingpositionsinequityof05001,0001,5002,0002,5001998199920002001RMBmillionNo.1bondhouseindomesticcorporatebondmarketUnparalleledcorporatebondissueexperienceBondissueinChina(1998-2001)AmountunderwrittenbyCITIC1305001,0001,5002,0002,5001998192.UpdateonChinadomesticandinternationalequitymarket2.UpdateonChinadomesticChinatotalissuanceisreachingUS$50billion...**includingduallistedHshareandRedChipofferingswhichamountedtoUS$30billionfortheperiodChinaIssues(1991-2001)(US$m)*391631212316671422211Numberofissues**Top3dealsChinaMobileUS$4.2bnChinaSouthernAirlineUS$700mJiansuExpresswayUS$490mTop3dealsChinaMobilefollow-on&CBUS$7.6bnChinaUnicomIPOUS$5.7bnSinopecIPOU$3.5bn15ChinatotalissuanceisreachiAsharenewissuealreadyexceedsinternationalofferingChinanewissuancepipelineThesecondlargestmarketinAsiabymarketcapitalisation(US$500bnvsHongKong‘sUS$450bn),onlynexttoTokyoThereare1,100+companieslistedinShanghaiStockExchangeandShenzhenStockExchangeAsharemarketishighlyfragmented,thetop10stocksaccountforonly12%oftotalmarketcapitalizationvs.33HangSengIndexstocksaccountforover80%ofthetotalmarketcapofHKmarketMajorqualitycorproatesarebeocmingincreasinglythefocusofthemarketAsharemarkethasbecomemajorfundraisingmarketplace….…andalsothefastestgrowingmarketintheworldInlast5years70%ofChinanewissuancewerecompletedinthedomesticmarkets(intermsofdollarvolume)TotaldomestictransactionsamountedtoUS$100bnvsUS$50bnforinternationalofferingsAsharemarkethasdemonstrateditscapacitytoabsorblargeissuessuchasChinaMerchantBank(US$1.32bn,Apr02),HuanengPower(US$335m,Nov01)andSinopec(US$1.43bn,Jul01)16AsharenewissuealreadyexceImplicationofliberalizationofAsharemarket17ImplicationofliberalizationChangepercentage2002todateChinamarkethasunderperformedinlast6monthsSourceBloombergChangepercentagesince“911”18Changepercentage2002todateAsharemarketshaverecoveredsincethebeginningoftheyearaftersignificantdeclinein2H2001Marketrelativeperformance(since2001)Asharevolume(since2001)MarketbecamebullishonpositiveeconomicdataandearningsprospectsGovernment’sannouncementofcrackdownonillegalfundsfinancedbybankcredittothestockmarketGovernmentdecidedtosuspendthesaleofstate-ownedsharesAnnouncementofreductionofstampdutyofsecuritiestradingMarketwasspeculatingthatnofurthermarketboostingpolicymeasureswouldbeimplementedinneartermandworriedaboutovermassiveoverhangofSinopecAsharesShanghaiASourceBloomberg19AsharemarketshaverecoveredNewissueperformance-ChinaIPOssince2001International:postIPOperformance...mixedDomestic:postIPOperformance…strong..20Newissueperformance-ChinaCurrentvaluationforChinastocksinHKmarketABNAMROtoppicks21CurrentvaluationforChinastAsharemarketvaluationisstillattractivetopotentialissuerComparisonwithothermarketsAveragedP/Eof50xplusBubbleswillbesqueezedoutasmorelargequalitycompaniesbeinglistedandthemarketbecomesmoreregulatedHighlevelofvaluationduetoscarcityofstocksorotherinvestmentinstrumentsAnestimatedRMB500bncorporateandinstitutionalfundsandRMB800bnprivatefundsareavailabletotheprimarymarket(i.e.IPOsubscriptions)-inaddition,investorleveragehasbeencommonplaceHeavyretailparticipationmeansthemarketismainlydrivenbymomentum/sentimentratherthaninvestmentrationale“False”highlevelofvaluationsforsomestocksduetomarketspeculation/manipulationandlackofshort-sellmechanismValuationhascomeoffconsiderablysinceJuly’sGovernmentcrackdownonillegalfundsfinancedbybankcredittospeculateinthestockmarketItiswidelyanticipatedthevaluationlevelofAsharemarketwillgraduallydeclineoverperiodwhencapitalmarketstructuralreformadvancesandvaluationbubblediminishesHowever,premiumvaluationwouldstillbeachievableforthosebetter-runcompanieswithbetterassetsalthoughtheIPOpricingisdefactocontrolledbyCSRCwithacapof20xhistoricalPEratioSourceBloomberg22AsharemarketvaluationisstLiberalizationinChina’scapitalmarketCDRprogrammeAimtointroducerespectableinternationalcompaniesincludingRedChipcompaniestodomesticinvestorsPriorityisexpectedtobegiventoRedChipcompaniesAnumberofRedChipcompaniesareintheprocessofpreparingCDRissuesandsomeofMNCshavealsoshowedinterestTheCDRproposalisbeingreviewedbytheStateCouncil.However,notimetableisgivenOneofthemajorissuesremainstheforeignexchangecontrolbythegovernmentQDIIAsharelistingAimtointroducegoodinternationalcompaniesincludingMNCsandlargeTaiwanandHongKonginvestedcompaniestoChina’sequitymarketPriorityisexpectedtobegiventoMNCs’Chinaoperationcompanies,followedbylargeTaiwanandHongKonginvestedcompanies.Eventually,MNCsparentcompaniescouldalsobeallowedtolistinAsharemarketonceRMBbecomesfullyconvertibleintoforeigncurrencyCSRChasalreadyannouncedthedetailedlistingrequirements(seesection4)AnumberofMNCsChinaoperationcompaniesareconsideringtheAsharelisting...AimtoallowqualifiedChineseinstitutionalinvestorstoinvestinoverseasmarketsHongKonggovernmentisverykeenonthisproposalastheyexpectHongKongwouldbenefitgreatlyintermsofcapitalflowandmarketsentimentTheQDIIproposalisbeingreviewedbytheStateCouncil.However,notimetableisgivenOneofthemajorissuesremainstheforeignexchangecontrolbythegovernment23LiberalizationinChina’scapiAlcatelChinaEricssonChinaKodakChinaMotorolaChinaProcter&GambleChinaUnileverChinaPotentialMNC(withChinaoperation)candidatesforAsharelistingCompanySectorTelecomequipmentTelecomequipmentPhotorelatedTelecomequipmentConsumerConsumerHouseholdnamesandMNCsarelikelycandidatestogototheAsharemarket.However,mostofabovementionedcompanieshavenotstartedtheprocessyetWithaviewtoimprovingtheoverallqualityofAsharecompanies,CSRChasalreadystartedtalkingtosomeJVsandsolelyforeignownedcompaniesinordertoobtaintheirviews/feedbackonthisnewpolicyWeexpectmoreMNCswouldjointhepartyasCSRCannouncedthedetailedAsharelistingimplementationrulesforforeignenterprisesbyissuingthenotificationon“specialrequirementsonthecontentandformatofprospectusforforeigninvestedcompanies”on1April,200224AlcatelChinaPotentialMNC(wi3. ValuationapproachandpricingmechanismforAshareIPOsandsectorvaluationinAsiaandChina3. ValuationapproachandpricValuationapproachandpricingmechanisminAsharemarketBottomline:ValuationmustexceedNAV(bookvalue)pershareasdeterminedbyMOFformulaforSOEsMethodologies-alltheapproachescommonlyusedininternationalmarketsDCFMultiplesofcomparablecompaniesPEEV/EBITDAandP/CFDividendyieldPricingmechanismSecondarymarketvaluationbenchmarkMarketexpectationofIPOdiscount(asappropriate)SubjecttoCSRC’sapprovalunderapproximately20xP/E(historical)under2xNAVpershare26ValuationapproachandpricingKeyvaluationdriversKeydriversofvaluationKeyvaluationdrivers:corporatespecificsEarningstrackrecordTrackrecordofmanagementGrowthpotentialCompetitiveadvantagesandmarketpositionrelativetopeergroup/competitorsFocusoncorebusinessIndustryoutlookMarketoutlookOpportunityforbusinessdevelopmentandearningsgrowthIndustryconsolidationopportunitiesChinaspecificsDividendpolicy:abalancebetweencashdividendandnewSizeoffreefloatandmarketcap:thegreaterthesize,thelowerthevaluationOtherfactorsMarketsentimentRegulatoryguidelines27KeyvaluationdriversKeydriveP/EistheoverridingmethodologyfortheAsharemarketDCFAprincipalpricingmethodusedbyinvestorstovaluecompaniesBasedongrowthrateofthemarketandmarketshareandinvestorsviewofappropriatediscountrate/costofcapitalInvestorassumptionswillvary(particularlyonpricesanddiscountrates),dependingoninformationdisclosureCommonvaluationapproachforbothdomesticinstitutionalfundsandretailinvestorsUsehistoricaldataasnoresearchforecastavailable‘A’shareindexusedasbenchmarkP/ECertaininvestorswillconsiderdividendyield(mainlyretailinvestorsandincomefunds)DividendyieldUsedascross-checkwithDCFvaluationUsehistoricaldataasnoresearchforecastavailableAlsousedforcomparisonwithpeergroupEV/EBITDAandP/CFComparisonwithcomparablepubliclylistedcompaniesinAshareandinternationalmarketsAnalysisofkeyoperationalandfinancialdifferencesbetweencomparableswilldriveratingdifferentialsComparablepubliccompaniesValuationapproach28P/EistheoverridingmethodoPricingprocessinAsharemarketSince2000,thefollowingpricingprocesshasbeenadopted…Step1Step2Step3SubmitapricinganalysisreporttoCSRCSetpricerangeformarketingPricingupontheoffercloseWrittenbyunderwriter/leadmanagerKeycontentsmethodologydiscussionpreliminarypricingrangeSendthesummaryofdraftprospectus(nomentionofcompanynameallowedbyCSRCregulation)toinstitutionalinvestorsandbrokersPre-marketingtoinstitutionalinvestors(2-3days)SetanupdatedpricerangebasedonpreliminaryfeedbackfrominstitutionalinvestorsSendtheupdatedpricerangetoCSRCStarttheofferingonceCSRCissuesagoaheadletterDistributeprospectuswiththepricerangetoinstitutionalinvestorsandbrokersPressconferenceroadshowandinternetbookbuilt,includinginstitutionsandpublic(2-3days)Pricingbasedontheorderbook29PricingprocessinAsharemarConsumerrelatedequityofferingsConsumerrelatedofferingshavenotbeenactiveAverageissuesizeisUS$75mandUS$90mforNJAandAsharesmarketrespectivelyWithUnilever’sbrandnameandscarcityvalue,UnileverChinaIPOshouldbeverywellreceivedConsumerrelatedequityoffering30ConsumerrelatedequityofferiPerformanceofUnileverAsiansubsidiariesPTUnileverIndonesiaandHindustanLeverarethetwoUnileversubsidiarieslistedinAsiaPTUnileverhasoutperformedJakartacompositeindex(JCI)by30%since2001anditscurrentmarketcapisUS$1,710mln(Rp21,200pershare)HindustanLeverhasoutperformedSensexIndexinIndia,reflectingthedefensivenatureofstrongbrandnamecompany.HindustanLever’scurrentmarketcapisUS$10,013.8m(INR222.55pershare)RelativePerformance:UNVRvsJCIIndexsince2001RelativePerformance:HLVRvsSENSEXsince2001IPO–Aug1991IPO–Jan199131PerformanceofUnileverAsianCurrentvaluationofAsianconsumer/food&beverage/personnelcarecomparablesValuationsummary:PE02rangingfrom12xto32xWeattempttouse2criteriatoselectpotentialAsiancomparablesinthesimilarsectorsinwhichUnileverChinaoperatesMNCs’localbusinesseslistedinlocalmarketsOverseaslistedcompanieswhichmainlyoperateinChinaSelectedUnileversistercompaniesSelectedfoodcompaniesNestle(Malaysia)BhdUni-PresidentEnterprisesCo.,LimitedTingyi(CaymanIslands)HoldingCorpUniversalRobinaCorporationWantWantHoldingsLimitedCadburyIndiaLtdNestleIndiaLtdDairyFarmInternationalHoldingsLtdSelectedbeverage/brewingcompaniesTsingtooBreweryCompanyLtdFoster’sGroupLtdGuinessAnchorBHDCarlsbergBreweryMalaysiaBHDSanMiguelCorporationVitasoyInternationalLtdPTUnileverIndonesiaTbk

HindustanLeverLtd

32CurrentvaluationofAsianconValuationofselectedlistedChinesecompaniesinsimilarsectorsValuationsummaryHistoricalPEratioisreaching70x...Relativelyhighvaluationisduetorelativesmallersizeoftheconsumerstocksretaildriven33ValuationofselectedlistedC4. UpdateonforeigncompanylistinginAsharemarket-DirectlistingbyMNC4. UpdateonforeigncompanyForeigninvestedcompaniesarenowallowedtolistintheAsharemarketsCSRChasannounceddetailedrequirementsonAsharelistingofforeigninvestedcompaniesArecentCSRCopinionpaperstatedthatforeignenterprisesareallowedtobelistedineitherAorBShareMarketsifthefollowingrequirementsaremet:FollowingtherelevantforeigninvestmentandownershiprestrictionsondifferentindustrysectorsComplyingwithPRCCompanyOrdinanceMeetingminimumlistingrequirementsPassingtheannualforeignenterprisereviewfor3consecutiveyearspriortothelistingMaintainingforeignownershipofnolessthan10%afterthelisting(however,tomaintainforeigninvestedcompany’sstatusfortaximplications,aminimum25%offoreignownershipisrequired)Maintainingsameminimumdomesticownershipafterthelisting,ifapplicableFilingthelistingwithMOFTECafterthelisting35ForeigninvestedcompaniesareRegulatoryoverviewforforeigninvestedcompaniestobelistedintheAsharemarketsNationalpeople’scongressStatecouncilTheultimatepolicy-makingbodyStateeconomicandtradecommissionOverseestheperformanceandrestructuringofSOEsStatedevelopmentandplanningcommissionApprovesmajornewprojectsandIPOsMinistryofInformationIndustry(MII)RegulatestelecomequipmentmanufacturingcompaniesChinaSecurityRegulatoryCommission(CSRC)ListingapprovalRegulateslistedcompaniesPolicyoriginationApprovalprocessPolicyregulationandimplementationMinistryofForeignTradeandEconomicCooperationRegulatesforeignenterprisesCSRC/ShanghaiandShenzhenStockExchangesOverseeslistedcompanies36RegulatoryoverviewforforeigCSRCencouragesFortune500ChinaoperationstolistintheAsharemarketsPrioritywouldbegiventojointventurecompanieswithMNCsPrioritywouldbegiventojointventurecompanieswithMNCs(e.g.Fortune500)asopposedto100%foreignownedMNCsubsidiariesoperatedinChina.ItisalsopossibleMNCgroupswouldbeeligibleforAsharelistingeventuallyThereareanumberofspecialdisclosurerequirementsforforeigninvestedcompaniesAsharelistingRiskfactorsincludingthelevelofdependencyofpurchase,supply,technologytransfer,patentsandtechnologyonoverseaspartiesaswellaspotentialchangesinforeignlaws/regulationsConnectedpartytransactionsincludingpurchase,supply,technologytransferandpatentsinlast3yearswithforeignshareholdersDetailedinformationofnationalitiesandpermanentresidencyofdirectorsandseniormanagement’sandotherpositionsheldinoverseasbythemThepurposeoftheserequirementsistoaddressfollowingconcernsinvestorsmayhaveforforeigncompanies:LackofindependenceProfittransferlackofcontrolofcoretechnologyandintangibleassetswhichmayresultindeterioratingofitscompetitiveadvantagesAccordingtoCSRCofficials,apilotprogrammewillbeusedinhandlingforeigninvestedcompanies’Asharelisting.MNCswithsoundoperationsandlongtermcommitmentinChina(i.e.withregionalheadquartersandR&DcentreinChina)willhaveadvantagesofbeingselectedforthe“experiment”UnileverislikelytobeselectedtoparticipatetheexperimentbyCSRCanddetaileddisclosureissuescouldbediscussedandagreedinthetermsacceptabletobothsidesSpecialdisclosurerequirements….…toaddressinvestorconcernsMNCslikelytobecomethecandidatesofthepilotprogramme...37CSRCencouragesFortune500ChCorporatestructureforlistingThelistingvehiclehastobeashareholding/operatingcompanyThelistingentityhastobeajointstockcompanyformedinaccordancewithMOFTEC1995Jan10guidelinesHoldingcompanies,domesticorforeign,aregenerallynotallowedtobelistedinChinaThelistingvehiclemustbetheoperatingentitySpecialexemptionmaybepossibleOtherwisearestructuringwouldberequiredNeedtounderstandUnilevercurrentsituationinChinatodeterminewhichentitywouldbethebestforthelistingandwhetheranyrestructuringorspecialapprovalisrequiredUnileverOffshoreVehicleUnileverPRCJointStockCo.(ListingEntity)UnileverPRCAssetstobelistedConsolidate/optimiseUnileverPRCoperationHoldingvsOperatingCoWhatassetstobeincludedinthelistingentityAccountingissuesRegulatoryapprovalsCommercial/financialcovenantsIssuesPreliminarystructureOffshorePRCOnshoreUnilever(China)Limited38CorporatestructureforlistinListingrequirementsCriteriaAShareListingRequirements39ListingrequirementsCriteriaA5. Asharelistingprocedure

5. Asharelistingprocedure

AshareIPOlisting–a4-phaseprocessInprinciple,foreigninvestedcompanieswillfollowthesameprocessasdomesticChinesecompaniesRestructuringandincorporationofthelistcoCoaching/Knowledgetutorialforthelistco*ApplicationforlistingMarketing&execution2-4months12months3months

(70workingdays)1-2months* BaoShanIron&SteelAsharelistingobtainedexemptionoftheCoaching/KnowledgetutorialperiodasitwasreadyforinternationallistingbeforegoingtoAsharemarket41AshareIPOlisting–a4-phasListingprocess–phase1:restructuringandincorporationofthelistco(2-4months)Appointadvisors(banker(s),valuers,accountantandlawyers)Kick-offmeetingDuediligencecommencesRestructuringproposaldiscussionFinaliserestructuring/incorporationplanAccountant:auditedaccountsforpast3yearsandmostrecentauditedreportValuers:assetvaluationreportsLawyer:legaldocumentationforlistcoincorporationBankers:adviserestructuring,co-ordinatetheapplicationeffortandsignCoaching/KnowledgetutorialagreementJointStockcompanyformationapplicationforapprovalfromMOFTECthroughlocalMOFTECofficeListcoincorporationandregistration42Listingprocess–phase1:resListingprocess–phase2:12-monthCoaching/KnowledgetutorialperiodRequirementbyCSRCPurpose:ensureboarddirectors,supervisionrepresentativesandseniormanagementfamiliarwithalltheregulationsandlegalrequirementsforlistedcompaniesinChinaKeycontents:companyincorporationprocesscorporatestructure-“arm’slength”betweenlistcoandparent/sistercompaniesorotherconnectedpartiesLegalworkshopscoveringcompanylawandsecuritieslawetcChineseGAAPBestpracticeofdecisionmakingprocessandinternalauditDisclosurerequirementsForevery2months,aprogressreportbytheCoaching/Knowledgetutorialbank/advisorisrequiredbyCSRCCSRC’sconsentisrequiredbeforequalifiedforlisting/shareissuanceapplicationtoCSRCSpecialexemptionofCoaching/KnowledgetutorialperiodispossiblebutneedtoobtainCSRC’sapproval,(subjecttoForeigninvestedcompanies’Asharelistingrequirements)43Listingprocess–phase2:12Listingprocess–phase3:Applicationforlisting/shareissuance(3months)ShareholdermeetingtodeterminetheuseofproceedsandapprovetheIPOresolutionDocumentationandapplicationmaterialpreparationBankersreviewandsignofftheapplicationdocumentsApplicationsubmissiontoCSRCSubmittheuseofproceedsreporttostateEconomic&TradeCommission(SETC)andStatePlanningandDevelopmentCommission(SPDC)CSRCapprovalLiasewiththestockexchangeonlistingapplication44Listingprocess–phase3:AppListingprocess–phase4:Marketingandexecution(1-2months)FormsyndicateandsignunderwritingagreementListingsponsor(i.e.banks)tofinalisethelistingapplicationtotheStockExchangeSummaryofprospectus(withnonamementioned)distributedtobrokersandinstitutionalinvestorsPre-marketing(managementandunderwriterrepresentativesmeetingwithinstitutionalinvestors-2-3days)SubmitpricerangetoCSRCCSRCtoissuealettertogiveago-aheadListingapplicationsubmissiontotheStockExchangeDistributionofprospectuswithconfirmedpricerange/publicannouncementInternetroadshow/sharesubscriptions(2-3days)Pricing/allocationSettlement(5days)FilingwillMOFTECregardingthelistingTradingcommencesAftermarketsupportbysponsor45List