联合利华项目建议书

Strictly private&confidentialUnilever(China)LimitedA share market workshopPresentation to385038501AAR 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 Industries 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 China 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 of Investment Banking,Shanghai38502Table 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 market-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 market1.Introduction to ABN AMRO Rothschild(AAR)and CITIC Securities(CITICS)38504Introduction to ABN AMRO RothschildDrawing on the full financial resources of its parent groups,ABN AMRO Rothschild offers world class equity capital markets expertise4Amongst the worlds largest privately-owned banks436 offices in 27 countries4Established and highly regarded skills in handling merger and acquisition,corporate advisory,privatisation and project finance assignments4Strong specialist industry sector teams based world-wide4World-wide retail and wholesale banking operations employing over 109,000 personnel4Group capital of EUR 34.0 billion.Total assets of EUR 597.4 billion4Membership of 47 stock exchanges world-wide including London,New York and NASDAQ4Over 880 equity research,sales and trading personnel4Dedicated equities distribution personnel located in the US to sell international offerings into the USEstablished corporate finance skills and relationshipsInvestment banking,capital strength and global equity distribution powerUnrivalled equity capital markets expertise+=4Top 5 European equity capital markets house4Top 10 international equity capital markets house4Over 160 dedicated equity capital markets specialists located in key regional centres globally4Established track record in key sectors and regions38505Strong 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 2002BankUS$mNo.1Deutsche Bank7,009.662Goldman Sachs&Co5,943.543Cazenove&Co4,542.5114UBS Warburg3,213.095ABN AMRO Rothschild2,924.086Merrill Lynch&Co2,612.847Morgan Stanley2,353.958Salomon Smith Barney2,265.079JP Morgan1,739.9310 HSBC1,215.22Source Capital Data Bondware,full amountTop Bookrunners and Joint Lead Managers of International Equity Issues,Q1 2002BankUS$mNo.1Salomon Smith Barney6,828.8262Goldman Sachs&Co4,284.283Merrill Lynch&Co3,462.1114UBS Warburg3,425.4175Deutsche Bank2,998.9106ABN AMRO Rothschild1,770.8127Cazenove&Co1,764.6128JP Morgan1,610.5109Nomura Securities Co Ltd1,358.82110 Credit Lyonnais1,244.84Source Capital Data Bondware,equal apportionment,shares only38506(m)05001,0001,5002,0002,5003,0003,5004,000Nat.Bank of GreeceSEBBNP ParibasCredit AgricoleGSBanca IMI MLDBUBSABN AMRO RothschildNo.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 Rothschild was the No.1 ranked Global Co-ordinator in European markets38507AAR has pioneered and completed 30 transactions with total size of US$2,133m in ChinaHG/NMR/AAR Bookrunner in Chinas Equity&Equity Linked transactions since 1991IssuerPricingdateIssuer IndustrysectorDeal size(US$mm)Offer typeSharecategoryChina Southern Glass Holding Co LtdHoare Govert 19 Dec 91Building materials12IPOB shareShanghai Wingsung Stationery Co LtdNMR 30 May 92Manufacturing21IPOB shareShanghai Chlor-Alkali Chemical Co LtdNMR03 Jul 92Chemical192IPOB shareShanghai Lian Hua Fibre CorpHG 18 Sep 93Manufacturing11PlacementB shareShanghai Forever Bicycle Co LtdNMR26 Oct 93Manufacturing21IPOB shareShanghai Dajiang(Group)Stock Co LtdNMR 30 Nov 93Diversified14IPOB shareShanghai Automation Instrumentation Co LtdHG11 Apr 94Manufacturing17Privatisation/IPOB shareHefei Meiling Co LtdAAR 14 Aug 96Electronics40Privatisation/IPOB shareQingling Motors Co LtdAAR 29 Aug 96Auto31Privatisation/IPOH shareChongqing Changan Automobile Co LtdAAR15 Oct 96Auto61IPOB shareQingling Motors Co LtdAAR15 Jan 97Auto110CBH shareCNPC(Hong Kong)LtdAAR20 Jan 97Oil&Gas29 Bought deal/Block tradeRed ChipChina Pharmaceutical Enterprise&Investment Corp LtdAAR 10 Mar 97Healthcare29 Bought deal/Block tradeRed ChipGITIC Enterprises LtdAAR 18 Mar 97Diversified14IPORed ChipSilver Grant International Industries LtdAAR21 Apr 97Real Estate63 Bought deal/Block tradeRed ChipNanjing Posts&Telecom Equipment Co LtdAAR28 Apr 97Telecom Equipment31IPOB shareGuangdong Kelon Electrical Holdings Co LtdAAR30 Apr 97Electronics36 Bought deal/Block tradeH shareBengang Steel Plates Co LtdAAR10 Jun 97Iron&Steel123Privatisation/IPOB shareShanghai Zhenhua Port Machinery Co LtdAAR14 Jul 97Engineering43IPOB shareQingling Motors Co LtdAAR17 Jul 97Auto9 Bought deal/Block tradeH shareShum Yip Capital LtdAAR 01 Aug 97Bank/Financial230CBRed ChipSilver Grant International Industries LtdAAR 07 Aug 97Real Estate115CBRed ChipKa Wah Bank LtdAAR 28 Aug 97Bank/Financial162 Bought deal/Block tradeRed ChipYantai Changyu Pioneer WineAAR 03 Sep 97Food&Beverages34IPOB shareCNPC(Hong Kong)LtdAAR 15 Dec 97Oil&Gas79 Bought deal/Block tradeRed ChipShenzhen SEG Co LtdAAR 30 Dec 97Electronics24 Bought deal/Block tradeB shareCosco International Holdings LtdAAR 06 Feb 98Transport57 Bought deal/Block tradeRed ChipYanzhou Coal Mining Company LtdAAR 27 Mar 98Mining258Privatisation/IPOH shareBeijing Capital International Airport Co LtdAAR31 Jan 00Transport231Privatisation/IPOH shareXinao Gas Holdings LtdAAR 12 Mar 02Gas43 Bought deal/Block trade China playTotal2,133Source Capital Bondware,March 2002Pioneered B share IPO-China Southern GlassFirst H share CB-Qingling MotorsFirst GEM listing upgrade to HK main board with placement38508Year2001Runner-up in ChinaRunner up in Consumer(Asia)2000No.4 in Retailing research(GEM)1st for H shares in Reuters Survey HongKong and China2nd in US Greenwich.Large and allInstitutions in 2001,InternationalBrokerage Services-Asian SharesNo.2 China ResearchNo.3 in China Research19993rd Best China Research(InstitutionalInvestors 1999/Euromoney 1999/Reuters 1999)No.1 in China Research,Eddie Wong1998No.1 in direct coverage for Asia1997No.3 overall in China ResearchNo.1 for Hong Kong and ChinaResearchABN 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-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/SoftwareMichele Mak-Technology/HardwareIn addition to in-depth individual company analysis,the team also produces periodic publications4 Daily flash notes4 Weekly equity review4 Quarterly sector,economic and strategy reportsThe HK/China teamIntroduction to CITIC Securities Co.,Ltd(CITICS)385010China International 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 group4CITIC Financing Holding,which will hold all the financing subsidiaries in CITIC,is to be established soon4As 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 MillionEquity capital:RMB 2,081.5 MillionTotal asset:RMB 23,6000 MillionNet asset:RMB 4,000 MillionIncome:RMB 2,400 MillionNet profit:RMB 1,150 MillionBranches:43 Branches throughout the countryStaff:1,300 employeesDate of establishmentOct.25,1995The largest Financing and investment corporation in China,with global presenceCITIC Securities Co.,LtdCITIC Group3850114Corporate Finance CommitteeInvestment banking(Beijing,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 record1997Ranking 3rd,14 IPOs1998Ranking No.1 in corporation-bond offeringRanking 4th in stock underwriting and capitalraising1999Ranking No.1 in corporate-bond offeringRanking 4th in IPOs,the 3rd in stocks right issue underwriting2000Ranking No.1 in corporate-bond offeringRanking 3rd in IPOsRanking 4th in right issuesRanking 3rd in capital raising(RMB 15.1 Billion)2001Ranking 2nd in sponsorship of the IPOs(10)Ranking No.1 in corporate-bond offering050100150200250199519961997199819992000051015199519961997199819992000Notes:the blue bars represent net assetCore valueServiceSatisfactionsSmartSafetySuccessAsset (RMB 100 million)Profit(RMB 100 million)4Asset management4Brokerage business4Proprietary trading385012Leading positions in equity offering and sponsorship in recent yearsIPO20012000Issue Volume:3,760 million6,055 millionRanking:53Rights issue20012000Issue Volume:2,576 million7,331 millionRanking:42Sponsor20012000Sponsor:1023Ranking:22Secondary Offer20012000Issue Volume:508 million1,591 millionRanking:63Handan Iron&SteelIPOCapital Raised:RMB 2,630 millionTsinghua TongfangIPO,second offer and Right IssueCapital Raised:RMB 1,740 millionYangtse Petro-ChemicalIPOCapital Raised:RMB 1,440 millionState PowerRight IssueCapital Raised:RMB 3,260 millionQilu Petro-ChemicalIPOCapital Raised:RMB 1,750 millionAngang SteelIPO,Convertible BondCapital Raised:RMB 2,670 millionCNOOC EngineeringIPOCapital Raised:RMB 768 millionCOSCO ShippingIPOCapital Raised:RMB 940 millionSinotransIPOCapital Raised:RMB 976 millionVankeConvertible BondCapital Raised:RMB 1,500 millionKey transactions38501305001,0001,5002,0002,5001998199920002001RMB millionNo.1 bond house in domestic corporate bond marketUnparalleled corporate bond issue experienceChina Three-GorgeConstruction Bond1999 RMB 2,000 million2000 RMB 3,000 million2001 RMB 5,000 millionPeking High-wayConstruction-Bond2002 RMB 1,500 millionChina RailwayConstruction Bond2001 RMB 1,500 millionJinmao Bond2002 RMB 1,000 millionBond issue in China(1998-2001)Amount underwritten by CITIC2.Update on China domestic and international equity market 38501505,00010,00015,00020,00025,000US$mB sharesN shares or OthersH shareRed Chip&China PlaysGEMGEM0000000021349229Red Chip&China Plays000004801,9566632,6868,1511,880H share001,0341,2786021,4186,50445959712,355875N shares or Others0801461,152200088310079958304B shares126097173313053819192090114019911992199319941995199619971998199920002001China total issuance is reaching US$50 billion.*including dual listed 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 IPO US$5.7bnSinopec IPO U$3.5bnTotal59915,81625,1223,9023,597Total126891,8972,7621,1072,27810,2621,4313,38321,9273,28849,036385016A share new issue already exceeds international offeringChina new issuance pipelineIssuerTimingSize(US$mm)Type of offeringAir China/CNAC2003/4N.A.InternationalAir China Cargo2004NAA sharesBank of China(HK)20022,000InternationalChina Southern Telecom2003/46,000A or HChina Unicom2002/3N.AA sharesBank of Communications2003500m+A sharesSanxia Power Generation2003/4700m+A sharesFujian Industrial Bank2004480-600mA sharesChina Resources National2003/42,400A sharesHuaxia Bank2002US$500m+A shares05,00010,00015,00020,00025,00030,00035,00040,00045,00019971998199920002001Shenzhen A shareShanghai A shareInternational4 The second largest market in Asia by market capitalisation(US$500bn vs Hong Kongs US$450bn),only next to Tokyo4 There are 1,100+companies listed in Shanghai Stock Exchange and Shenzhen Stock Exchange4 A 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 market4 Major quality corproates are beocming increasingly the focus of the market A share market has become major fund raising marketplace.and also the fastest growing market in the worldIn last 5 years4 70%of China new issuance were completed in the domestic markets(in terms of dollar volume)4 Total domestic transactions amounted to US$100bn vs US$50bn for international offerings4 A share market has 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)385017Implication of liberalization of A share marketGoal/results4 Promote mainland as an international capital market4 Allow foreign investors direct participation in domestic A share marketImplication4 Convertibility of RMB4 Allow Rmb to float(free or managed)4 Adopt international accounting standards and legal framework4 Allow foreigners to buy A shares4 results in convergence of A and of B share markets4 No reason for new issue of H shares resulting in migration of existing H share issues to A share market4 A share new issue market already exceeds that of H shares and red chips:accounts for 70%of total China new issue sin last 5 years total issue of US$100bn of A shares vs.US$50bn for international offering4 H shares market will remain open for issuers who want rapid access to market and avoid queuing for Ashare approval4 Red chip listing in Hong Kong may continue(for company that obtains approval from regulator)as it allowscompany to avoid CSRC supervision385018-20%-10%0%10%20%30%40%50%60%70%Shanghai AShanghai BRed chipDowH shareMSCI Free Asia exJapanTWSE-15%-10%-5%0%5%10%15%20%Red chip IndexShanghai BDowShanghai AMSCI Free Asiaex JapanTaiwan SEH share IndexChange percentage 2002 to dateChina market has underperformed in last 6 monthsSource BloombergChange percentage since“911”38501905001000150020002500300035004000450036892369233695136982370123704337073371043713537165371963722637257372883731637347Shenzhen AShanghai A50607080901001101201/1/012/1/013/1/014/1/015/1/016/1/017/1/018/1/019/1/0110/1/0111/1/0112/1/011/1/022/1/023/1/024/1/02Shanghai AShenzhen AA share markets have recovered since the beginning of the year after significant decline in 2H2001Market relative performance(since 2001)A share volume(since 2001)Market became bullish on positive economic data and earnings prospectsGovernments announcement of crack down on illegal funds financed by bank credit to the stock marketGovernment decided to suspend the sale of state-owned shares Announcement of reduction of stamp duty of securities tradingMarket was speculating that no further market boosting policy measures would be implemented in near term and worried about over massive overhang of Sinopec A sharesShanghai ASource Bloomberg385020Pricing dateNameAmount(US$m)OfferpriceListingSectorPx Last11-Apr%chg 1dayForward PEat pricing%chg sinceoffering18-Jan-02Medianation572.60GEMAdvertising2.3-15.40%30.9x-11.54%1-Feb-01TravelSky Technology Ltd1634.10HKComputer Services6.1016.50%13.86x48.78%21-Feb-01CNOOC Ltd1,4316.01HK,NYOil&gas9.4516.50%5.14x57.24%7-Mar-01Global Bio-chem Technology421.02HKAgricultural/biochemical pdts3.03-17.60%5.90 x196.57%29-May-01Digital China Holdings Ltd1233.68HKComputer Services4.008.70%23.00 x8.70%23-Jun-01RoadShow Holdings Ltd752.25HKAdvertising2.2817.80%12.00 x1.11%13-Jul-01Euro-Asia Agricultural871.48HKAgribusiness2.40-5.40%6.20 x62.16%29-Nov-01Zhejiang Glass Co Ltd652.96HKGlass manufacturer2.631.40%8.45x-11.32%5-Dec-01Aluminum Corp of China Ltd5271.38HK,NYMetals manufacturer1.680.70%9.70 x21.74%14-Dec-01Clear Media Ltd1125.89HKAdvertising5.40-0.70%35.7x-8.32%17-Dec-01Capinfo Co Ltd480.48GEMComputer/Software0.48-12.50%n.a.0.00%Average15xNew issue performance-China IPOs since 2001International:post IPO performance.mixed Domestic:post IPO performancestrong.Pricing dateIssuer(Gr)Industry sectorUS$AmttotalOfferPricePrice+1dyPrice%offer+1dyP/E IPOLast price(RMB)%chg sinceoffering26 Apr 2001China Railway Erju Co LtdConstruction126.2359.5016.7876.6321.1x13.9847.16%30 Apr 2001Shenzhen Taitai Pharmaceutical Co LtdHealthcare209.68024.8041.7968.5185.5x24.900.40%17 Jul 2001Fiberhome Telecommunication Technologies Co Ltd Telecoms223.24821.0027.0828.9561.8x22.949.24%24 Jul 2001Anhui Jianghuai Automotive Chassis Co LtdAuto105.2459.9013.1532.8325.4x13.2033.33%26 Jul 2001Kweichow Moutai Co LtdFood&Beverage271.13331.3936.8617.4323.1x37.7020.10%31 Jul 2001Shanghai Datun Energy Resources Co LtdEnergy119.6019.0012.6040.0018.4x13.2447.11%04 Jan 2001Beijing Gehua CATV Network Co LtdMedia&Publishing149.79315.5028.4583.5528.7x27.6878.58%05 Jan 2001Fujian Expressway Development Co LtdTransport&Shipping160.9066.668.8532.8820.2x9.0936.49%11 Jan 2001Goldfield Industries IncReal Estate102.4209.4226.90185.5621.4x23.20146.28%14 Feb 2001Inner Mongolian Baotou Steel Union Co LtdIron&Steel219.0335.186.4023.55172.7x10.3098.84%14 Mar 2001Sichuan Guodong Construction Co LtdGlass&Ceramics103.83612.2825.79110.0235.1x15.3825.24%19 Apr 2001Beijing UFsoft Co LtdComputers/Software110.77236.6892.00150.8248.3x47.3128.98%30 Jul 2001Anyang Steel Co LtdIron&Steel225.9056.806.850.7419.4x5.65-16.91%05 Mar 2002Shandong Infrastructure Co LtdConstruction158.4472.604.5273.8518.6x4.6880.00%18 Mar 2002Heilongjiang Agriculture Co LtdAgribusiness194.7515.387.2634.9417.4x8.8965.24%01 Apr 2002China Merchants Holding Co LtdBanking&Financials1,321.2837.3010.6646.0321.5x10.3842.19%Average20 x+*Sources Bondware and Bloomberg(data as of April 15,2002)Except Inner Mongolian Baotou Steel,Shenzhen Taitai Pharmaceutical,Fiberhome Telecommunication,Beijing UFsoft Co Ltd and Sichuan Guodong Construction which were listed during Feb Juy 2001 when CSRC experimentally lifted the p/e cap for new issues.However,after July 2001,CSRC resumed the 20 x P/E cap for new issues385021Current valuation for China stocks in HK market H shareRed Chip/China playsH share IndexH share excl.PetroChinaand SinoPecRed ChipIndexRed Chip excl.ChinaMobile and China UnicomP/E20029.7x11.7x14.2x9.7x20039.4x10.2x13.4x9.2xEV/EBITDA20024.4x5.3x7.6x8.4x20034.3x4.9x6.9x8.0 xDividend yield20024.5%3.8%1.0%3.4%20034.5%4.4%1.5%3.3%ABN AMRO top picksStockRationaleBeijing AirportBenefiting from macro economy and WTOChina MobileLiquid and strong earningsPetroChinaAttractive valuation,strong oil price and high dividendSinoPecAttractive valuation and strong oil priceSIPDHigh growth and attractive valuationSource ABN AMRO Research(April 11,2002)385022A share market valuation 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 regulated4High level of valuation due to scarcity of stocks or other investment instruments4An estimated RMB500bn corporate and institutional funds and