瑞银中国并购报告(1)

EquityResearch30September2005AsiaPacific/ChinaStrategyChinaM&AChinaM&A:correlationwithmacroandmarketAtUS$30bnp.a.,thecurrentlevelofChina/HongKongM&Aactivityisstillonly2%oftheglobaltotalbutitsmarketshareisrisingsteadily.Thelevelofactivityhaslittlerelationshipwithmacrocycles,butispositivelycorrelatedwithChineseandglobalequitymarketperformance.InternationalM&A:resources,technology,brandandmarketTheUSisthelargestacquirerandtargetcountryforChina/HongKongM&A–anetpositivebalanceofUS$4.7bn(moreacquisitionsbyUSfirmsthantheotherwayround),or67%oftheglobalbalance.Chineseindustriesreceivingmostoverseasinterestarefinancials,cosmetics&personalcare,andbeverages–alltargetingChineseconsumers.OverseasindustriesreceivingmostChinesebuyinginterestarecomputers,retailandoil&gas,mainlyforverticalintegration,resourcesandtechnology.DomesticM&A:focusonindustryconsolidationDomesticM&Aismostactiveinsectorsthatareveryfragmented,requiringconsolidation.ItisnoteasyinChina,despitethecentralgovernment’seffortstoconsolidatemanyoftheseindustries.Sectoroutlookand‘nationalchampions’Inthisreport,weanalysethekeyM&Adynamicsin15sectorsandprovideabriefprofileof22Chinese‘nationalchampions’whicharesettoemergeontheglobalstageincomingyears.Alottobuy(orsell)?ANALYSTCERTIFICATIONSAREINTHEDISCLOSUREAPPENDIX.FOROTHERIMPORTANTDISCLOSURES,visit(877)291-2683.U.S.Disclosure:CSFBdoesandseekstodobusinesswithcompaniescoveredinitsresearchreports.Asaresult,investorsshouldbeawarethattheFirmmayhaveaconflictofinterestthatcouldaffecttheobjectivityofthisreport.Investorsshouldconsiderthisreportasonlyasinglefactorinmakingtheirinvestmentdecision.CustomersofCSFBintheUnitedStatescanreceiveindependent,thirdpartyresearchonthecompanyorcompaniescoveredinthisreport,atnocosttothem,wheresuc[e-mail]@[e-mail]entChan(HeadofResearch)AngelloChan(Utilities&Coal)KarenChan(Airlines)SusanChan(Statistics)TrinaChen(BasicMaterials)JeannieCheung(Autos&ConsumerElectronics)WallaceCheung(Internet)JinsongDu(Smallcaps)PrashantGokhale(Energy,Petrochemicals)PeterHilton(Transportation)MarisaHo(Consumer)RaymondHo(HighwayInfrastructure)EdisonLee(Telecoms)CatherineLim(Food&Beverage)MicheleMak(Conglomerates,Retail)SeanQuek(Media)BillStacey(Finance&Insurance)DongTao(Economics)AlisonYip(TechnologyHardware)Source:CSFBChinaM&A30September20052FocuschartsandtablesFigure1:China/HongKongfirmsmarketshareinglobalM&AFigure2:China/HongKongM&AversusMSCIChina0.00.51.01.52.02.53.03.5198319851987198919911993199519971999200120032005ytd(%)0510152025303540199319941995199619971998199920002001200220032004-100-50050100150200250300ChinanominalGDPyoygrowthlhsChina/HKM&Ayoygrowthrhs(%)(%)Source:ThomsonFinancial,CreditSuisseFirstBoston(CSFB)estimatesSource:ThomsonFinancial,CSFBestimatesFigure3:MarketshareoftopfiveplayersFigure4:InternationalM&Abalance175117610715264476510562081121155215367191014140102030405060CoalOil&GasIronOreMiningNonFerrousNon-MetalFoodBeverageTobaccoTextileGarmentLeatherTimberFurniturePaperMakingPrintingSportingGoodsOilRefiningRawPharmaceuticalChemicalFibreRubberPlasticNonMetalSteelMetalProductsOrdinarySpecialTransportElectricElectronic&Instrument&MktshareofTop5(%,2003)-2-1012345USUKSingaporeJapanOthercountriesSwedenGermanyMacauKoreaInwardM&AminusOutwardM&A(US$bn)Source:ChinaMarketYearbook,CEICSource:ThomsonFinancial,CSFBestimatesFigure5:Top-fivesectorsinChina/HongKong-relatedM&AInternationaloutwardInternationalinwardDomestic(US$mn)%oftotal(US$mn)%oftotal(US$mn)%oftotalComputers1,83319.1DiversifiedFinancials2,47315.4Holdingcompanies2,03313.8Retail1,14011.9Banks2,36814.8Electricutilities9856.7Oil&gas8919.3Cosmetics&PersonalCare2,00012.5Textiles9056.2Telecommunications6807.1Beverages1,3778.6RealEstate8936.1Hand&machinetools6396.7Transportation1,1076.9Retail7775.3Allindustries9,590100.0Allindustries16,037100.0Allindustries14,698100.0Source:ThomsonFinancial,CSFBestimatesChinaM&A30September20053Alottobuy(orsell)?ChinaM&A:correlationwithmacroandmarketFromamarketshareoflessthan1.0%ofglobalM&Ainthelate1980s,China/HongKong’smarketsharerosetoashighas3.0%in1993beforefallingbacktobelow1.0%inthelate1990s.Currently,ataroundUS$30bnp.a.,activitylevelsarearoundfourtimesashighasintheearly1990s,andtheglobalmarketsharehasaveragedcloseto2.0%.China/HongKongM&AvolumesappeartoberelatedlooselytocyclesineconomicactivitywithaslightlynegativecorrelationcoefficienttoChineseGDPgrowth,butapositivecorrelationtoglobalandChineseequitymarketperformance.InternationalM&A:resources,technology,brandandmarketConsideringthecountrybreakdownofoutwardinternationalM&AbyChina/HongKongfirms,thelargesttargetmarketshavebeentheUS,followedbySouthKoreaandSingapore.ForinwardinternationalM&A,thelargestcountryacquireristheUS,followedbySing