DBS strengthens its position in China with strategic investment
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DBS Asset Management to acquire 33% stake in China’s Changsheng Fund Management Company Ltd
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Partnership will enable Changsheng to become a leading fund management company in China ("PRC")
HEFEI, ANHUI, 1 JUNE 2006 – DBS Asset Management ("DBSAM"), a wholly-owned subsidiary of DBS Bank Ltd, will acquire a 33% stake from the existing shareholders of Changsheng Fund Management Company Limited of PRC ("Changsheng").
The transaction involves DBSAM becoming a strategic shareholder of Changsheng and acquiring stakes from all three existing shareholders of Changsheng, including 8% from Guoyuan Securities Company Limited ("Guoyuan Securities"), 13% from Anhui Provincial Innovative Investment Company Limited ("Anhui Innovative") and 12% from Anhui Provincial Investment Group Company Ltd ("Anhui Investment"). DBSAM will acquire the shares for a total cash consideration of RMB174, 900,000 (approximately S$34.4 million ). The price was agreed upon on a willing buyer-willing seller basis, after negotiations and after taking into account, inter alia, Changsheng’s financial track record, growth prospects, asset under management as well as comparable precedent transactions that took place in China. DBSAM’s investment will be funded by internal sources.
On completion of the purchase by DBSAM, Guoyuan Securities will retain a 41% stake, DBSAM will own 33%, and 13% each will be held by Anhui Innovative and Anhui Investment.
The agreement was signed in Anhui by Frank Wong, Vice Chairman and Chief Operating Officer of DBS Bank Ltd; Dr. Feng Liang Zhi, Chairman of Guoyuan Securities; Qian Zheng, General Manager of Anhui Innovative; and Qian Jin, General Manager of Anhui Investment.
"Our strategic investment in Changsheng fits well with DBS’ blueprint for our expansion into China and complements our business operations there. This investment underscores DBS’ commitment to China and we look forward to working with our partners, Guoyuan Securities, Anhui Innovative and Anhui Investment to add value to Changsheng and grow it to become a leading fund management company, " said Mr Wong.
Changsheng Fund Management Company Limited was founded in March 1999 and operates in Beijing and Shanghai. The Company is one of the first ten fund management companies founded in the PRC. It is also one of the first group of fund management companies approved by the Chinese government to manage the National Social Securities Funds ("NSSF").
The strategic partnership with DBSAM combines Changsheng’s local market knowledge and distribution network and DBSAM’s expertise in investment and risk management of mutual funds to build Changsheng into a leading fund management company in China.
Changsheng sponsors, markets and manages mutual and NSSF funds invested in domestic equity, Chinese government and corporate bonds as well as local banks’ fixed deposits. As at December 2005, Changsheng has eight close-end and open-end mutual funds under its management. The Company’s net asset under management ("NAUM") increased by 49.2% in 2005 to RMB 19.8 billion (approximately S$ 3.9 billion).
Dr. Feng Liang Zhi, President of Guoyuan Securities, said: "China’s economy enjoys rapid growth and the capital market offers abundant opportunities. Singapore has strong relations with China from a historical and cultural perspective, and furthermore, we share the same values. This forms a solid foundation for our partnership and future success. The signing ceremony today demonstrates Changsheng’s move into a new era of development."
Qian Zheng, General Manager of Anhui Innovative, said: "The sino-foreign fund management company symbolises the long-term co-operation between the Chinese partners and DBS. The Chinese shareholders and DBS will continue to support the future growth of the Company. Our wish is to see Changsheng become a world-class asset management company with DBS’ experience and expertise."
Subject to regulatory approvals, the new entity will take advantage of China’s opening for overseas investment and explore opportunities under the country’s latest Qualified Domestic Institutional Investors (QDII) scheme that allows local investors in China to invest in foreign capital markets.
About DBS
Headquartered in Singapore, DBS is one of the largest financial services groups in Asia with almost five million customers and operations in 14 markets. The largest bank in Singapore and the fifth largest banking group in Hong Kong as measured by assets, DBS’ "AA-" and "Aa2" credit ratings are among the highest in the Asia-Pacific region. DBS has leading positions in consumer banking, treasury and markets, asset management, securities brokerage, equity and debt fund raising. Beyond the anchor markets of Singapore and Hong Kong, DBS serves corporate, institutional and retail customers through its operations in China, India, Indonesia, Malaysia, Thailand and The Philippines.More information about DBS Group Holdings and DBS Bank can be obtained from our website www.dbs.com.
About DBS Asset Management
Headquartered in Singapore, DBS Asset Management manages more than 60 mutual funds with a total AUM of approximate S$11billion for retail, private investors and institutions. DBSAM ranks among the most experienced and best known fund management companies in Asia. With offices in Singapore, Malaysia and Hong Kong, it manages funds for institutions and retail investors. As an award winning Asian fund manager with more than 22 years' experience, DBSAM delivers effective investment management solutions that cover the entire risk spectrum of asset classes, with core competency in global fixed income, Asian equities and absolute return strategies.
DBSAM is a wholly owned subsidiary of DBS. In the PRC, DBS has branches and representative offices in Shanghai, Beijing, Guangzhou, Shenzhen, Suzhou, Hangzhou, Fuzhou, Tianjin and Dongguan. More information about DBSAM and DBS can be obtained from the websites www.dbsam.com and www.dbs.com.
About Guoyuan Securities Company Limited
Headquartered in Hefei city, Anhui province, Guoyuan Securities is one of the full-licensed securities houses in the PRC. It was established in October 2001 by Guoyuan Holdings Limited Ltd together with another 12 entities. The China Association of Securities ranked Guoyuan Securities 8th for net assets (RMB 2.0 billion, S$410.6 million) and 12th for net profit (RMB45.9 million, S$9.3 million) amongst the 110 Chinese securities houses in 2004.
The principal business scopes of Guoyuan Securities include securities brokerage, proprietary trading, underwriting, and investment advisory of securities and trustee business. It has 35 branches covering financial capitals and major cities such as Beijing, Shanghai and Guangzhou. Guoyuan Securities became the largest shareholder of Changsheng in September 2004 and was approved by the authority to become one of the 13 securities houses permitted to conduct innovative securities business in November 2005. More information about Guoyuan Securities can be obtained from the website
www.gyzq.com.cn.
About Anhui Provincial Innovative Investment Company Limited
Anhui Innovative is a state-owned enterprise owned by the provincial government of Anhui. It has a registered capital of approximately RMB 1.0bn (S$ 202.1 million) with total assets exceeding RMB 1.6 billion (S$ 327.1 million) at the end of 2005. Headquartered in Hefei city Anhui province, Anhui Innovative is responsible for the development, management and re-structuring of state assets assigned by the Anhui government. Anhui Innovative actively participates in direct investment and asset re-structuring of listed companies.
About Anhui Provincial Investment Group Company Limited
Established in June 1998 and headquartered in Hefei city, Anhui Province, Anhui Investment is jointly owned by Anhui Railway Investment Construction Company, Anhui Provincial Development & Investment Company and Anhui Provincial Agricultural Investment Company. As at the end of 2005, the registered capital and total assets of Anhui Investment have reached RMB 1.2 billion (S$ 236.3 million) and RMB 21.3 billion (S$ 4.3 billion). It is a state-owned investment holding company with nine wholly-owned subsidiaries and investments in industrial, agricultural, infrastructure, real estates and securities sectors. These include strategic interests in Anhui-based enterprises such as Chery Motors, Conch Cement, Anhui Hualing Heavy Automobile and China Petrochem.
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