In­vest­ment ex­pert banks on lead­ing edge

China Daily (Canada) - - HONG KONG -

CCB In­ter­na­tional is do­ing very well in Hong Kong and will ac­tively look for busi­ness op­por­tu­ni­ties from emerg­ing in­dus­tries and com­pa­nies on the Chi­nese main­land, said Hu Zhanghong, chair­man and chief ex­ec­u­tive of the in­vest­ment in­sti­tu­tion.

Hong Kong-head­quar­tered CCB In­ter­na­tional is wholly owned by China Con­struc­tion Bank Corp, and its ser­vices in­clude spon­sor­ing and un­der­writ­ing, fi­nan­cial ad­vi­sory ser­vices, cor­po­rate merg­ers and ac­qui­si­tions (M&As), as well as re­struc­tur­ing, as­set man­age­ment, di­rect in­vest­ment se­cu­ri­ties bro­ker­age and in­vest­ment con­sul­tancy, Hu told China Daily.

“Our core busi­ness has been per­form­ing very well in Hong Kong. ( Take) our ini­tial-pub­lic-of­fer­ing (IPO) ser­vice, for in­stance. Ac­cord­ing to (fi­nan­cial an­a­lysts) Dealogic, CCB In­ter­na­tional in 2015 was the book run­ner for 18 IPOs and that makes us No 1 among the world’s top in­vest­ment in­sti­tu­tions in Hong Kong.”

CCB In­ter­na­tional’s cor­po­rate merg­ers and ac­qui­si­tions drive is also do­ing well, thanks to the “go­ing over­seas” strat­egy of Chi­nese en­ter­prises, Hu pointed out.

CCB In­ter­na­tional has a com­pet­i­tive edge over its Chi­nese and for­eign peers alike, as it is more fa­mil­iar with the lo­cal mar­ket, Hu noted.

Dur­ing the past decade, most of the com­pa­nies that came to Hong Kong look­ing for ser­vices from in­vest­ment banks have been from the Chi­nese main­land. CCB In­ter­na­tional un­der­stands Chi­nese main­land com­pa­nies, and its abil­ity to pro­vide com­pre­hen­sive fi­nan­cial ser­vices is en­vied by for­eign in­vest­ment banks, Hu claimed.

CCB In­ter­na­tional is among the few main­land in­vest­ment man­agers that can boast in­ter­na­tional net­works, which is quite an ad­van­tage, Hu said.

Hu said that the main­land econ­omy is ob­vi­ously un­der­go­ing re­struc­tur­ing, on a scale that has never been seen by the world be­fore. Dur­ing the struc­tural op­ti­miza­tion, many op­por­tu­ni­ties have pre­sented them­selves.

“We’ve seen many newly emerged in­dus­tries and a lot of great com­pa­nies. As an in­vest­ment in­sti­tu­tion, we want to seize busi­ness op­por­tu­ni­ties, to in­vest in these com­pa­nies and to be able to grow to­gether with these com­pa­nies.”

He pointed out that health­care, lo­gis­tics, high­tech and high-end man­u­fac­tur­ing are among the sec­tors that have stood out dur­ing the Chi­nese eco­nomic re­struc­tur­ing.

“From the struc­ture of our or­ga­ni­za­tion to the al­lo­ca­tion of our re­sources, CCB In­ter­na­tional is ac­tively search­ing for busi­ness op­por­tu­ni­ties from these sec­tors. We be­lieve there will be many na­tional and even world-class en­ter­prises emerg­ing from these sec­tors,” Hu said.

He ex­plained that in terms of seiz­ing busi­ness op­por­tu­ni­ties, CCB In­ter­na­tional will un­der­take the role of fi­nan­cial con­sul­tant for these com­pa­nies, help­ing them solve de­vel­op­men­tal prob­lems.

“We have also set up var­i­ous funds, we have di­rect in­vest­ment in Hong Kong as well as as­set man­age­ment prod­ucts to help these com­pa­nies meet their cap­i­tal de­mands,” Hu said.

There are also great busi­ness op­por­tu­ni­ties re­lated to the lat­est round of Chi­nese com­pa­nies’ over­seas M&A, he noted, adding that here too CCB In­ter­na­tional un­der­takes the role of fi­nan­cial ad­vi­sor.

“The lat­est round of M&A is quite dif­fer­ent from what we’ve seen be­fore. Main­land com­pa­nies used to ac­quire re­sources when they par­tic­i­pated in over­seas M&A, but re­cently, aside from ac­quired re­sources, we’ve seen that Chi­nese com­pa­nies are in­ter­ested in bring­ing back ad­vanced tech­nolo­gies,” he ex­plained.

“We’ve seen some con­sumer com­pa­nies bring back new driv­ing forces for them­selves through ac­qui­si­tions of for­eign tech­nolo­gies. Some even ac­quired top- tier for­eign com­pa­nies in their field.”

Hu said that dur­ing over­seas M&A, CCB In­ter­na­tional usu­ally ad­vises Chi­nese com­pa­nies to pay spe­cial at­ten­tion to val­u­a­tion of the as­sets or com­pany they are ac­quir­ing.

It would also re­mind the com­pa­nies to con­sider whether the tech­nol­ogy they want to buy could be ap­plied on the Chi­nese main­land.

Hu said CCB In­ter­na­tional’s tar­get is to con­tinue to en­hance its value as an in­vest­ment ser­vice provider by im­prov­ing re­lated core prod­ucts.

“We will also tap into the boom­ing as­set man­age­ment in­dus­try, we will put more re­sources into ex­pand­ing our busi­ness in this field. Mean­while, we will also fo­cus on ex­plor­ing op­por­tu­ni­ties that arise along with the in­ter­na­tion­al­iza­tion of the ren­minbi and the Belt and Road Ini­tia­tive,” he said.

But while Hu is up­beat about prospects, he is also cau­tious, as any in­dus­try and busi­ness has its risks, he noted. Cur­rently, the main­land econ­omy is con­tin­u­ing to slow down and CCB In­ter­na­tional needs to avoid any wild fluc­tu­a­tions in the busi­ness, it needs to com­mu­ni­catete well with clients to carry outut risk man­age­ment to­gether,r, and also needs to be cau­tiouss about com­pli­ance, said Hu, who was one of the ma­jor founders of CCB In­ter­na­tional.

In the early 2000s, China Con­struc­tion Bank Corp was pre­par­ing to set up CCB In­ter­na­tional and Hu par­tic­i­pated in the process. “Even in those early days, we firmly be­lieved that we would have great ac­com­plish­ments as we were backed by our from do­mes­tic flights by charg­ing trav­el­ers for just their carry-on lug­gage.

But any­one who has ever flown on the main­land would know that if he or she par­ent com­pany and we were backed by the mar­ket of the Chi­nese main­land.”

Hu said he of­fi­cially joined CCB In­ter­na­tional when it was set up in early 2004 and is glad to have watched it grow into a great in­vest­ment in­sti­tu­tion.

Con­tact the writer at so­phiehe@chi­nadai­lyhk.com is not among the first batch of pas­sen­gers to board, the chances of find­ing any lug­gage space in the air­craft’s over­head com­part­ments are vir­tu­ally nil.

EDMOND TANG / CHINA DAILY

Hu Zhanghong, chair­man and CEO, CCB In­ter­na­tional Hu Zhanghong said CCB In­ter­na­tional will aim to strengthen its as­set man­age­ment ser­vices and ex­plore emerg­ing op­por­tu­ni­ties re­lated to the Belt and Road Ini­tia­tive and in­ter­na­tion­al­iza­tion of the ren­minbi.

PROVIDED TO CHINA DAILY

Chi­nese main­land air­lines could learn from US peers who did away with all the free­bies that fliers in Asia still take for granted.

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