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Target Company Screening for
PE Investments

How to find the companies with high growth potential and real value among hundreds of thousands of companies in China? Who are those urgently seeking for investments while possesing high potential in profit return with relatively low risks? With China's economic expansion continues, a huge number of private companies have been growing fast while facing tight cash flow, thus in bad need of investments, but they find it hard to get loans from China's state-owned banks. At the same time, as a result of the information explosion, it has become increasingly challenging for those investors with abundant funds to find companies with real value to invest in.

With a research team backed by professional research methods as well as years of accumulated industry knowledge, CCM can help investors screen out a list of private companies with high growth potential and urgent needs in fund from thousands of companies in China. CCM carries out the screening by looking into various aspects of the companies, such as company size, company history, product portfolio, capacity, import and export, sales channel, sales strategy, competitors, end users, R&D, sales, management team, etc. CCM provides neutral analysis reports on screened out comparnies, to help PE firms understand the target companies' investment intentions better.


www.cnchemicals.com

CCM holds the third-party perspective, and provides objective, scientific, impartial analysis and argument of risk, strategy,prospects, investment environment, and the value of the project.

 www.cnchemicals.com


This service can be carried out in three steps basing on investors' requests. Step One：Find out potential target companies for investments, namely those with great growth potential, those with intention to invest, those meeting investment requirements (in size, or in industry focus, etc) of PE investors. Step Two: Talk to these private companies to help PE investors understand more of their investment target's businesses; Step Three: Provide an in-depth analysis of the Investment Target before PE investors make decisions to invest.



Step One: Screen out a list of enterprises for investment


CCM can screen out a list of companies meeting the investor's requirements on investment (such as industry category, company size, investment size) according to our surveys. Requirements for screening investment objectives can include but not limited to the following: enterprise scale, the amount of investment, the industry the company belongs to, shareholding ratio and so on. CCM can help filter and investigate. And CCM will distinguish between start-up enterprises, growing enterprises, rapidly expanding enterprises and mature enterprises, with special focus on rapidly expanding enterprises. Later CCM will provide a monthly updated list of the companies meeting the raised requirements.

Step Two: Talk to these private companies for more details


CCM will talk directly to the key contact person of the target private companies to help PE investors understand more about investment targets' business by providing details of these private enterprises. Below are sample points CCM usually gets after conversation with the target companies:

Date:
Company:

  1. Company Name and Overview of Business
  2. Finance Report
    1. Annual revenue
    2. Gross profit margins (revenue minus cost of goods sold)
    3. Some idea of bottom line profitability such as EBITDA or net income?
    4. Debt situation
    5. Cash position (do they need cash and for what?)
    6. Are there any capital expenditure plans for the future? How much capital is required over the next 2-3 years?
    7. How has the company been financed historically (debt, equity, etc.)?
    8. Is the company audited? Who is the auditor?
  3. Ownership
    1. Is the company private or public?
    2. Who are the major shareholders? Are there any private equity investors?
    3. Is the company limited by shares? (If so, what is the number of shares and capitalization)
    4. Are there any plans for an IPO? (If yes, what is the time range?)
  4. Leadership
    1. What is the name of the person who is the "legal person" of the company?
    2. What is the relationship between the "legal person" and the company? (CEO, Chairman, etc.)
    3. How many other shareholders are there?
  5. Breadth of Business
    1. Products & Services
    2. Geographical Spread
  6. Industry
    1. Growth of sector
    2. Growth of company within sector
      - Any strategy for growth
      - Company annual growth aspirations (% revenue increase/year)
  7. Competitive Within Industry
    1. List major competitors and whether they are public or private company
    2. Size (revenue) relative to competitors within this sector
  8. Locations
  9. Physical Facility
  10. Path Forward
    1. Are there any appropriate candidate for further review?

Step Three: Provide an in-depth analysis of the Investment Target


CCM will carry out an in-depth analysis of the target company before PE firms make decision to invest. For CCM's company analysis in this step, it mainly covers six pionts including:

  • - Company Background
  • - Company Financial Statements
  • - Company Cost and Profit Benchmarking
  • - Company Export Situation
  • - Company Strategy
  • - Company Competitiveness

Click here for a sample of CCM's company analysis.