Schmittzehe & Partners | China Business Consultancy

2005 China M&A and Investment Forum London 15th November 2005

China M&A and Investment Forum
Moving Forward With Your China Strategy
15th November 2005, London

The Mergermarket 2005 China M&A and Investment Forum was held on 15th November 2005 in London. Benjamin Schmittzehe, Chief Executive of Schmittzehe & Partners, was a panelist for the event and covered the topic: 'Where the money flows - the hotspots present and future'. He was also the moderator for the panel discussion: 'Investment funding and the role of private equity'.

'Where the money flows' - Schmittzehe & Partners view:
Where the money flows has changed over time.
Early 90s:
As the market began to open-up, the investment focus was on the basics. Goods to satisfy the huge consumer markets thirst for basic consumer products and the rapidly growing economy's thirst for raw materials. Hotspots included: energy, breweries and the automotive sector.
Late 90s:
The internet grabbed the attention as it did all around the world. Numerous B2C and B2B offerings were developed -many mimicking what existed in the west, a few native to the China market. As some of these began to IPO on NASDAQ or were acquired by their Western counterparts, very significant returns hit the headlines. The internet medium not only plays to China's huge size, but also to its growing importance internationally -the very successful Alibaba for example is an online platform to enable the world to trade with Chinese export manufacturers.
Now in 2005:
Market and regulatory developments are driving where the money flows. Many companies in China are finding distribution a critical key to success. The financial sector is at last opening-up to foreign investment. China continues to push for restructuring of state-owned enterprises. Hotspots as a result include: Financial Services, Logistics, Energy & Utilities, and Telecom.
In the future?
That is the hundred million dollar question. Schmittzehe & Partners believes two trends will be key; over-investment and saturation leading to consolidation, and the rise of the service economy. Hence, we believe hotspots will include retail, consumer goods and automotive, as well as the service sector.

To discuss this, please contact us.

A summary of the discussion panel key themes and remarks is available for download here.