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Equity financing consultation and enterprise listing service
 
1. Overview

Also known as equity financing, this service enables a company to raise funds by issuing common or preferred stocks. The financing tool is available in three forms: private placement, public offering (IPO and refinancing) and financing from restricted shares. Private placement is designed to raise funds by issuing shares to specific investors in a non-public market. A public offering is intended for companies to raise funds by selling shares to the general public in a stock exchange. Financing from restricted shares assists a listing company to cash out shares that are restricted by a regulatory policy from sales during a given period of time.

2. Target customers

Except for the preference for investment in different growth stages of a target company, the varied customers of financing from private placement and public offerings share the following fundamentals as investors in order to focus on the long-term value of the invested companies:

Continuity: For private placement financing, the customer’s past business performance is sufficient to reflect its value and potential; for financing from a public offering, the customer should be assessed over three consecutive years based on its profits, changes to controlling shareholders or effective controller, and management stability.

Standard restructuring: This is especially applicable for customers that plan to raise funds from public offerings.

Growth potential: The target company should preferably generate tens or hundreds of millions yuan in profits each year.

Private equity and open market investors tend to favor the following sectors: retail chain stores and exclusive stores, financial services, leading consumer brands, the IT industry, leading manufacturing market segments, education, pharmaceuticals and healthcare, new materials and clean energy.

3. Service description

In a financing project based on private placement, CMB offers the following services for the customer:

Drafting a business plan based on a due-diligence investigation of the customer;

Building a financial model, providing valuation and pricing shares;

Preparing and publishing documents relating to private placement, finding and selecting suitable potential investors and making preliminary due-diligence of investors;

Designing investment offer terms and assisting the customer to negotiate the terms;

Designing the transaction structure and planning for revaluation and discussing legal documents with lawyers;

Assisting in the negotiation process until the transaction is completed.

In a financing project based on a public offering, CMB offers the following services for the customer:

Advising on overseas listing policies and requirements, and training the customer;

Based on domestic or overseas listing requirements, helping the customer formulate and improve its business strategy, guiding its daily operations, and reengineering its management model;

Based on listing requirements, helping the customer develop asset and debt restructuring plans and instructing them on how to implement these plans;

Helping the customer examine and select intermediary agents such as lawyers and accountants;

Recommending qualified customers to investment banks in China and abroad, and assisting them to prepare for listing.

In a financing project based on a public offering, CMB joins the sponsor and lead underwriter in offering financial consulting services throughout the project. By recommending the customer to a sponsor, CMB negotiates with the lead underwriter and sponsor on how to share the underwriting and consulting fees.

4. CMB's advantages

Robust capital base, good business reputation, and strong brand position: As a leading commercial bank that is highly regarded at home and abroad, CMB has built a strong foothold in the Chinese market and developed a deep insight into China’s conditions and policies, marketplace and business practices.  

An extensive network of customers and project resources: CMB enjoys a massive customer base that is distributed across a wide variety of sectors, including industry leaders and innovative SMEs.

One-stop service system: CMB offers a package of support services for equity financing and enterprise listing that integrates planning, sponsoring, underwriting, and auxiliary financing through close coordination between its branches at home and abroad.

Reducing the costs of equity financing and listing: Benefiting from its long-term partnerships with securities companies, law firms and accounting firms, CMB can help companies that are planning to be listed obtain the best prices.

Strong cross-selling expertise: CMB has the ability to fully explore customer value and cross-sell financial products.

A full line of financial services: Powered by its extensive resource pool and strong capital position, CMB offers a comprehensive range of multi-tiered financial services.

Service team: CMB’s investment banking service team comprises experienced employees with master’s degree or above.

Note:
All the contents stated above are for your reference only. Please consult the local branch of China Merchants Bank for further information. China Merchants Bank reserves the ultimate right of interpretation for the contents in this page.