a rising player in aviation finance
TRANSCRIPT
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Contents
Strictly Confidential
Huge Demand of China Aviation Industry
The Growing of Chinese Lessor
Who is China Merchants Bank Leasing
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4.1% 3.9% 1.5%
-2.1%
4.1% 2.8% 2.3% 2.4% 2.5%
12.7% 14.2%
9.6%
9.2%
10.6% 9.5%
7.8% 7.7% 7.3%
-5.0%
0.0%
5.0%
10.0%
15.0%
20.0%
2006 2007 2008 2009 2010 2011 2012 2013 2014
World China
China GDP Growth compared to World
SOURCE:the world bank.
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Aviation Industry Growth in China
37.5%
14.1%
15.9% 15.6%
4.3%
19.7% 16.1%
9.5% 8.9% 10.8% 10.7%
11.4%
7.5% 5.6%
8.8%
1.2% - 1.2%
8.1% 6.3% 4.2% 6.4% 4.5%
-10%
-5%
0 %
5%
10%
15%
20%
25%
30%
35%
40%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
RPK Growth Rate(China) RPK Growth Rate(World)
SOURCE:CAAC and Wind
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Total Passengers (million)
Aviation Industry Growth in China
290 319 354 390 440
0
200
400
600
2011 2012 2013 2014 2015
5.6 4.5 3.8 4.4
8.4
-
5.0
10.0
2011 2012 2013 2014 2015
Total Profit (billion USD)
2.42.1
0.9
0.3
0.0
0.5
1.0
1.5
2.0
2.5
3.0Average Flight Times Per Year
US UK JAPAN CHINA
SOURCE:CAAC and Wind
7.6
1.4 1.1
3.9
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
US UK JAPAN CHINA
Total Passengers in 2014
100 Milliom
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Domestic travelers(100 million person)
17.12 19.02 21.03
26.41 29.57
32.62 36.11
0
10
20
30
40
2008 2009 2010 2011 2012 2013 2014
CAGR=13.25%
1 International travelers(100 million person)
0.46 0.48 0.57
0.70 0.83
0.98
1.17
0
1
2008 2009 2010 2011 2012 2013 2014
CAGR=16.83%
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• In the past 7 years, annual growth rate of domestic travelers in China is about 13.3%, while the rate of
international travelers climbs to 16.8%.
• As the second largest market in the world, the average flight times in china is only 0.3. It is expected the
number will reach to 0.47 by 2020, which will bring at least 700million demand.
Aviation Industry Growth in China
SOURCE:CAAC and Wind
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Opportunities from One Belt One Road
Opportunities Infrastructure Construction
Culture and Tourism
Oil and Gas
Transportation
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Global Deployment of Chinese Asset
0% 10% 20% 30% 40% 50% 60% 70% 80% 90%
100%
2009
20
10
2011
20
12
2013
20
14
2015
Y2
016
Y201
7 Y2
018
Domestic Asset International Asset
SOURCE:Internet
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Contents
Strictly Confidential
Huge Demand of China Aviation Industry
The Growing of Chinese Lessor
Who is China Merchants Bank Leasing
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Financial Leasing Company:
Non-banking financial institution regulated by CBRC.
Leasing Company:
Non-banking financial institution regulated by Ministry of Commerce.
Classification of Chinese Lessors
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2007
2010
2011 2013
2012 2014
2015
Chinese Banks are allowed to establish leasing companies. (YJF [2007] 462)
Financial leasing companies are permitted to conduct finance lease business with SPV in FTZ.
VAT Reform More than 600 aircraft traded in Tianjin FTZ
Milestones
Total asset of the leasing industry amounts to 2B USD.
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25 46 107
143
238
308
477
11 23 46 77
116 146
200
0
100
200
300
400
500
600
2008 2009 2010 2011 2012 2013 2014
CAGR=68%
2008-2014 Total Asset of Leasing Industry in China
The Grow Path of Chinese Leasing Industry
Total Asset of Leasing Company Total Asset of Financial Leasing Company
SOURCE:CBRC and Ministry of Commerce
Billion USD
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Performance of Chinese lessors
Ranking: 3 in top 20 of the world, 5 in top 30 of the world. Order Book: Over 500 in order Activities:
Acquisition IPO
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Top 50 Aircraft Leasing Companies 2014 Company Rank Total fleet value Total fleet
2014 2013 million USD$ AreCap 1 6 33,099 1,305 GECAS 2 1 32,507 1,624 BBAM 3 3 11,060 292
SMBC Aviation Capital
4 4 11,037 386
BOC Aviation 5 5 9,445 246 AWAS 6 7 9,222 313
CIT Aerospace 7 8 9,004 312 Air Lease 8 9 8,806 235
ICBC Leasing 9 13 6,858 168 Aviation Capital
Group 10 10 6,561 272
Avolon Aerospace Lsg 11 11 6,204 140
CDB Leasing Company 12 13 5,252 129
Doric 12 12 4,383 38 Standard Chartered
Avn Fln 14 16 4,263 105
Aircastle Advisor 15 15 4,083 136 Jackson Square
Aviation 16 18 3,671 93
FLY Leasing 17 24 3,003 127 MC Aviation
Partners 18 17 2,842 90
DAE Capital 19 20 2,778 56 Macquarie AirFinance 20 19 2,635 132
VEB-Leasing JSC 21 29 2,482 70 ORIX Aviation 22 21 2,482 123
Hong Kong Avn Capital 23 22 2,271 73
BoCom Leasing 24 30 2,101 56 Boeing Leasing 25 25 1,982 227
Aircraft Leasing&Mgmt 26 38 1,972 62
Nordic Aviation Capital 27 27 1,968 174
Intrepid Avn Group 28 33 1,953 21 China Aircraft Lsg 29 32 1,772 47
Novus Aviation 30 37 1,673 20 Amentum Capital 31 26 1,599 44
ALAFCO 32 28 1556 50 Changliang Lsg. Co 33 31 1,490 64
Guggenheim Avn Partners 34 23 1,331 43
AVIC International Lsg 35 34 1,281 71
Jackson Square AvnIreland 36 40 1,235 25
CMB Financial Lsg 37 - 1,161 25
Comsys Aviation Lsg 38 58 1,071 20
Showa Leasing 39 46 871 32 Jetscape 40 36 819 43
Apollo Aviation Grp 41 47 795 55
Dragon Aviation Lsg 42 43 779 23
Banc of America Lsg Ireland
43 - 777 26
Transportation Partners 44 75 732 24
SkyWorks Leasing 45 35 703 80 Century Tokyo Lsg 46 - 673 30 Titan Aviation Lsg 47 39 666 9
VTB-Leasing 48 53 652 46 Cargo Aircraft Management 49 41 620 54
Aldus Aviation 50 51 613 29 Total 216,788 2,865 SOURCE:Flightglobal Ascend Fleets and Ascend Values database
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Extra Benefits for Chinese Lessors
Strong parent companies
SOURCE:http://www.relbanks.com/worlds-top-banks/market-cap
Rank Bank Country Market Cap(Sep.30.2015)
1 Wells Fargo & Co US 263.60 Billion USD
2 Industrial & Commercial Bank of China(ICBC) China 233.25 Billion USD
3 JP Morgan Chase & Co US 225.47 Billion USD
4 China Construction Bank China 171.56 Billion USD
5 Bank of America US 163.10 Billion USD
6 Bank of China China 162.11 Billion USD
7 Agricultural Bank of China China 154.95 Billion USD
8 Citigroup Inc US 149.32 Billion USD
9 HSBC Holdings UK 147.85 Billion USD
10 Mitsubishi UFJ Financial Group(MUFG) Japn 86.29 Billion USD
20 China Merchants Bank China 68.71 Billion USD
…
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Contents
Strictly Confidential
Huge Demand of China Aviation Industry
The Growing of Chinese Lessor
Who is China Merchants Bank Leasing
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• China Merchants Bank (“CMB”) was established in 1987 in Shenzhen and listed in Shanghai Stock Exchange and in the Stock Exchange of Hong Kong. With over 28 years’ development, CMB has become the sixth largest bank in China;
• CMB ranks 235th in the 2015 Fortune 500 marks, with USD 1 trillion asset, over 950 sub-branches and about 70,000 employees as of June 2015;
• Two Hong Kong subsidiaries – Wing Lung Bank Limited & CMB International Capital Corporation Limited;
• Branches and representative offices in Hong Kong, Taiwan, New York, Singapore, London, Luxembourg and Sydney.
Well Recognized China's Leading Financial Institution with a First Class Retail Franchise
2011-2014 Best Private Bank in China
2014 Best Customer Relations Management
2014 Best Investment Product Portfolio
2014 Best Ultra-high end Customer Service
2013 Best SME Cash Management Bank in China
2012 Best Domestic Custody Specialist – China (For the 4th Consecutive Year)
2013 Best Private Bank in China (For the 4th Consecutive Year) 2014 Best Innovation Bank for Trade Finance Products
2014 Best Private Bank in China
2013 The World’s Best Call Center
2013 Ranked one of the top 4 globally 2013 Best Cash Management Bank in China (For the 8th Consecutive Year)
2012 Best Export Factoring Provider, the first Chinese member enlisted
2014 Best Joint-stock Retail Bank in China (the 10th time)
2014 Best Mobile Banking Product in China
2014 Commendation Award for SME Business in China
China Merchants Bank - Overview
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CMBL was established in 2008, as one of the first five financial
leasing companies approved by the State Council.
Capital: 2 billion USD, wholly owned by China Merchants Bank,
as the only leasing arm of CMB.
Total assets: More than 16 billion USD, focusing on
Aviation/Shipping/Large equipment/Vendor Leasing.
Various financing sources, with credit facilities of more than 32
billion USD from over 60 banks.
China Merchants Bank Leasing Overview
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Our Services
Opearating Leasing
Sale and lease back
Financial Leasing
Portfolio purchasing and selling
Asset management
We have team with industry long time experiences of lessors, airlines, banks and MRO, to provide services:
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Average fleet age of 2 years
Aviation Business
• Started the aviation business in June 2009 • Start to set up entities in Bonded Area in
2010, have plat forms in Tianjin, Shanghai, Xiamen
• Set up entities in Ireland and Hong Kong in 2011
• Awarded “2010 Deal of the year” by Euromoney
• Awarded “2014 Airfinance Innovation Award” by China Airfinance Awards
• Awarded “2015 Airfinance Development Award” by China Airfinance Awards
Milestones
Our Portofolio
A320
B737-800
B777-300ER
A330-300
B787
others
Fleet/Backlog in total : 95
Total Fleet: 55 Total Backlog: 40
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Domestic and Global Business
2016/01
Tianjin Shanghai
Hong Kong
Ireland
Xiamen
South African Airways Platforms
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This presentation is strictly confidential and prepared exclusively for the benefit and internal use of our client to whom it is directly addressed and delivered and not for distribution or publication. The information may not be reproduced without the consent of CMBL. The information contained herein has been prepared to assist recipients making their own evaluation of the Company and does not purport to be all-inclusive or to contain all of the information a prospective or existing investor may desire. In all cases, interested parties should conduct their own investigation and analysis of the Company and the data set forth in this information. CMBL makes no representation or warranty as to the accuracy or completeness of this information and shall not have any liability for any representations (expressed or implied) regarding information contained in, or for any omissions from, this information or any other written or oral communications transmitted to the recipient in the course of its evaluation of the Company. By accepting a copy of this presentation, the recipient agrees that the presentation and its contents are confidential, that the recipient will hold and treat in the strictest of confidence and will not use any of the information therein for any purpose except to evaluate its potential interest. Forward-looking statements and information — that is, statements related to future, not past, events. There statements may be identified by words such as “expects,” “may,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “forecast” or words of similar meaning. Such statements are based on our current expectations and certain assumptions, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond CMBL control, affect our operations, performance, business strategy and results and could cause the actual results, performance or achievements of CMBL to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements.
Disclaimer
Strictly Confidential