> Case Studies

1) Clarifying important issues pre IPO

An international bank is preparing an IPO for a major Chinese company but suspects a conventional due diligence exercise has not provided a full picture of all its operations. Our investigation reveals a clear picture of health on the company's main business but the existence of subsidiary real estate investments which were risky and possibly illegal. Further, two major shareholders are discovered to be under investigation over charges of illegal land acquisitions and substandard housing construction. The bank was saved from making a costly error.

2) Getting the timing right for the hedge fund investor

A European hedge fund needed to understand if the Chinese property market is at the peak of a bubble and should sell its holdings in listed real estate companies. We contacted senior Chinese officials and analysts to collate their predictions of how China's macro-economic policies will change and impact the property and construction industries. We also researched the different regional real estate markets and highlighted the considerable variation in risks from one city to another. Our research exposed considerable differences between the reported statistics, local government policies and actual implementation in each market and real property price movements. Finally we presented the client with a breakdown showing the exposure of each listed Chinese property company to a possible fall in prices.

3) Identifying the right Chinese partner

A major Western company is seeking to sell a coal mine to a Chinese buyer. We identified the most likely potential buyers and presented a number of potential ways of approaching each in turn. We provided background on the leading executives of each potential partner and their attitudes to foreign investment. In addition, we investigated the likelihood of each potential purchaser of obtaining the necessary approval from the central government. Consequently the client was able to make a timely approach which resulted in a successful deal.


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