Capital China
Fund JV Research
CODE：SHFIN04018
1Capital China
Item
Market introduce
Market Competition
Invest Structure
Schedule of set-up
Schedule of fund issuance
Business Scope
Corporate Governance
Financial Forecast
2Capital China
Item
Market introduce
Market Competition
Invest Structure
Schedule of set-up
Schedule of fund issuance
Business Scope
Corporate Governance
Financial Forecast
3Capital China
Market introduce—proportion of
fund
From: Stat. Yearbook of China
4Capital China
Market introduce-growth of deposit
Unit: 1,000billion RMB
From: Stat. Yearbook of China
5Capital China
Market introduce-growth of deposit
Unit: 1,000billion RMB
From: Stat. Yearbook of China
6Capital China
Market introduce-growth of society
fund Unit: 1,000billion RMB
From: Stat. Yearbook of China
7Capital China
Market introduce-growth of
securities’ market
The total net value of funds just account for % of
securities market value only
Unit: 100 million RMB
From: CSRC
8Capital China
Item
Market introduce
Market Competition
Invest Structure
Schedule of set-up
Schedule of fund issuance
Business Scope
Corporate Governance
Financial Forecast
9Capital China
Market Competition-Top 10
CODE Name Open-end Close-end Total size Establish time
1 HuaAn 3 4 210 1998
2 China 5 4 200 1998
3 Southern 4 4 320 1998
4 Guotai 3 4 120 1998
5 Penghua 4 4 140 1998
6 Changsheng 2 4 110 1998
7 Dacheng 2 5 100 1999
8 Boshi 3 5 270 1998
9 Harvest 4 2 160 1999
10 Baoying 1 2 100 2001
From: China Fund Network
10Capital China
Market Competition-Numbers of Fund
China fund market:
38 fund management companies
(including 8 JV fund management companies )
86 Open-ended funds
54 Close-in funds
More than 200 billion RMB in the market
11Capital China
Market Competition-JV in China
Name Chinese-partner Foreign-partner
1 Guotai-allianz Guotai-jun’an Securities Co. Allianz Group (Germany)
2 Fortune SGAM Huabao Trust Company SGAM (France)
3 China Merchants
China Merchants Securities Co.
ING (Netherlands)
4 ABN AMRO Xiangcai
Xiangcai Securities Co. ABN AMRO
(Netherlands)
5 Fullgoal
Haitong, Shenyin & Wanguo,
Huatai Securities .
BMO Finance Group
(Canada)
6 Forties Haitong Investment
Haitong securities Co.
Forties FMC (Japan)
7 INVESCO Great-wall
Great-wall Securities Co.
INVESCO (USA)
8 SYWG BNP Paribas
Shenyin & Wanguo Securities Co. BNP Paribas
(France)
From: China Fund Network
12Capital China
Market Competition- JV in China
Name Establish Time Amount of Funds
1 Guotai-allianz May 2003 2
2 Fortune SGAM Feb. 2003 4
3 China Merchants
Dec. 2002
4
4
ABN AMRO Xiangcai
Jul. 2002
3
5 Fullgoal Apr. 1999 6
6
Forties Haitong Investment
Apr. 2003
2
7 INVESCO Great-wall FMC
Jun. 2003
3
8 SYWG BNP Paribas
Jen. 2004
0
From: China Fund Network
13Capital China
Item
Market introduce
Market Competition
Invest Structure
Schedule of set-up
Schedule of fund issuance
Business Scope
Corporate Governance
Financial Forecast
14Capital China
Invest Structure --Capital Requirement
of Fund JV
Registered Capital: RMB 100,000,000
15Capital China
Invest Structure --Qualification of
Domestic Promoter
Registered Capital – At least RMB 300,000,000
Good achievements and high reputation in
securities operation, investment securities
consultation, trust assets managing or any other
financial assets management
No records of illegal actions in current 3 years.
16Capital China
Invest Structure --Qualification of
Foreign Promoter
Paid-in Capital – At least RMB 300,000,000
Foreign Financial Institution
No substantial punishment from security
administration and law authority in recent 3 years
Complete law and supervision system on securities
in the country of the promoter, and the country’s
security supervision authority has signed on the
MOU on the cooperation of security supervision
with CSRC.
17Capital China
Item
Market introduce
Market Competition
Invest Structure
Schedule of set-up
Schedule of fund issuance
Business Scope
Corporate Governance
Financial Forecast
18Capital China
Schedule of set-up
Self-Regulation Promise
Open
Apply to establishment
Apply to open
Registration by GS
>12 months in
principle
60 workdays
30 workdays
>One week
Give the Promise letter to CSRC
Approval of establishment by CSRC
Give the Promise letter to the Stock Exchange
Apply to establishment to CSRC
Apply to open to CSRC
Approval of opening
Establishment
19Capital China
Item
Market introduce
Market Competition
Invest Structure
Schedule of set-up
Schedule of fund issuance
Business Scope
Corporate Governance
Financial Forecast
20Capital China
Schedule of Fund Issuance
Fund exchange
Apply to prepare to issuance
Fund collection
Financing check up
<6 months
<6 months
<6 months
<10 workdays
Draft of fund contract, draft of fund
trusteeship contract, fund collection
illuminate, finance statement of FMC, legal
opinion letter etc.
Approve FMC prepare to
issuance, or explain the reason
of un-approved
Application to CSRC
Publicize collection illuminate
before 3 days
Legal institution
make the report
21Capital China
Item
Market introduce
Market Competition
Invest Structure
Schedule of set-up
Schedule of fund issuance
Business Scope
Corporate Governance
Financial Forecast
22Capital China
Business Scope
Funds Management
Establish Funds
Funds Registration
Funds Distribution
23Capital China
Business Scope --Investment Field
Stocks
Liquid market value More than 400 billion RMB
1,259 list companies
Nearly 70 million investors
Second only to Japan stocks market in Asia
Bonds
More than 40 billion bonds can be exchanged
Monetary tools
Central bank bills, commercial bills, CDs etc.
24Capital China
Business Scope --Forbidden Field
Security Distribution
Buy and sell other funds (except with special
approval of the State Council)
Buy and sell affiliates’ stock or bond
Carried illegal security exchange business
Loan or Warranty to others
Others
25Capital China
Item
Market introduce
Market Competition
Invest Structure
Schedule of set-up
Schedule of fund issuance
Business Scope
Corporate Governance
Financial Forecast
26Capital China
Corporate Governance--
Organization Chart
CEO
Investment
Dep.
Finance Dep,
Trustee
Dep.
Supervisor
BOD
R&D
Dep.
IT Dep.
Admin. Dep.
Fund
Manager
27Capital China
Corporate Governance--Independent
Director
The amount of independent directors shall be
more than the directors appointed by the
largest shareholder.
Independent Directors shall take up at least
1/3 of the board of directors
Independent Directors can be appointed by at
most 3 fund companies at one time
28Capital China
Corporate Governance
Independent Director: Qualification
More than 5 years’ working experience in
Finance, Law or Accounting.
Not employee of the shareholder’s company
Not employee of this company in the last 3
years
No interest relationship with senior management
of the company
No interest relationship with the company
29Capital China
Corporate Governance
Independent Director: Right to Vote
The followings require the favor of more than
2/3 of independent directors ：
Auditing affairs of the company and fund，engage or
change accounting firms.
Transaction with affiliates
The salary, appointment and dismission of senior
managers, supervisor and fund manager
Rent special fund trading seat
Engagement of sale agent, trust management or
registration department and related expense rate
Others
30Capital China
Corporate Governance--CEO
Have the qualification for carrying out fund
business or any other working experience in
security which is accepted by CSRC
For senior manager of fund company, more than
3 years’ experience of funding business or
more than 5 years’ experience of security and
financial business
For senior manager of fund deposit department,
more than 3 years’ experience in bank
31Capital China
Corporate Governance--Manager of Trustee
Department
Have the qualification for carrying out fund
business or any other working experience in
security which is accepted by CSRC
For senior manager of fund company, more than
3 years’ experience of fund business or more
than 5 years’ experience of security and
financial business
For senior manager of fund deposit department,
more than 3 years’ experience in bank
32Capital China
Corporate Governance--Fund Manager
Have the qualification for carrying out
fund business
More than 3 years’ experience in fund
business or more 5 years’ experience in
security or financial work
Pass the Fund Manager Qualification Test.
33Capital China
Corporate Governance--Supervisor
According to the requirement of CSRC, the
company shall have one supervisor.
The term of the supervisor is 3 year and the
term can be renewed.
The appoinment and dismission of the supervisor
shall be reported to CSRC and requires the
approval of CSRC.
34Capital China
Corporate Governance--Other
Professional Staff
Including the professional staff of R&D Dep.,
Marketing Dep., Finance Dep., IT Dep.
At least with Junior College Degree on
Security or other related major, 2 years’
experience in Security Business or 3 years’
in Financial Business
Pass the Funds Broker Qualification Test
China Nationality (except for special
approval of CSRC)
35Capital China
Item
Market introduce
Market Competition
Invest Structure
Schedule of set-up
Schedule of fund issuance
Business Scope
Corporate Governance
Financial Forecast
36Capital China
Financial Assumption
Registration Capital: 100,000,000RMB
37Capital China
Financial Assumption
Opening period 1Y
Fund issuing period
revenue reserves rate 15%
Payout ratio 100%
38Capital China
Financial Assumption--Size of fund
Unit: ’000 RMB
39Capital China
Load Open-End
Fund
Closed-end
fund
Applicatio
n fee
1%% 1% belong to Custodian
bank
Front-end
Load
%% % belong to Custodian
bank
Back-end
Load
% % belong to Custodian
bank
Manageme
nt fee
% % belong to Fund Cor.
Financial Assumption--Fund Load
From: CSRC
40Capital China
Financial Assumption --TAX RATE
TAX TYPE Tax-exempt
period
TAX RATE
Business tax rate 2Y * %
Income tax rate 2Y * 15% *
*by virtue of shanghai government,not formal
issued by law
41Capital China
Opening Expense---Hardware&Sofeware
min max avg
TA system 15,000 20,000 17,500
Exchange
system
1,000 2,000 1,500
Software 2,000 2,000 2,000
Call center 1,000 2,000 1,500
sub-total 19,000 26,000 22,500
Unit: ’000 RMB
From: Market research
42Capital China
Opening Expense- Operating exp.
min max avg
Operating exp 10,000 15,000 12,500
Unit: ’000 RMB
From: Market research
43Capital China
Opening Expense-Total
Unit: ’000 RMB
44Capital China
Fund Issuance expense
min max avg
Fund Check
exp.
160 160 160
RP Exp. 2,000 2,000 2,000
Ad. 9,000 15,000 12,000
Disclosure
exp.
800 800 800
Travel 1,000 1,000 1,000
sub-total 12,960 18,960 15,960
Unit: ’000 RMB
From: Market research
45Capital China
Unit: 1 person
Operating exp.—number of staff
46Capital China
Unit: ’000 RMB
Operating exp.—salary of staff
47Capital China
Unit: 1 billion RMB
Operating expense
48Capital China
Unit: 1 billion RMB
Summary of P&L
49Capital China
Summary of Cashflow
IRR: %
50Capital China
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