The combination of our research methods, operating knowledge in China, and investment experience make GCiS an ideal partner, if not platform for investment in China. Far too many companies do acquisitions in China without doing the required homework, or fail to get the most out of their investment. Issues in China such as lack of legal recourse, lack of accounting transparency, and complex company structures make investments here particularly difficult. On the other hand, opportunities in China for private equity investment are tremendous, if one can identify these and evaluate them sensibly.

We believe that in China, tools of evaluation most commonly used in the West are not sufficient in themselves. GCiS works to reduce risk through a structured approach that incorporates the most salient features of our research capabilities, financial tools, local industry knowledge, and relationships to fulfill these needs. These can be divided into three main areas:

a) Target Generation & Screening
Many of the best investment targets in China are the least obvious, or most difficult to locate- and the opposite also applies. GCiS can generate investment targets and deal flow through a systematic program based on specified criteria. We have a database of over 70,000 companies in China, and are familiar with local dynamics. Our screening process consists of three stages, from a starting universe to selection of final candidates for more critical examination.

b) Target Investigation/ Due Diligence
When evaluating companies in China for investment or acquisition, legal and accounting checks are not enough. The GCiS Investment Due Diligence Program is an extremely thorough system of primary research designed to paint the broadest picture possible of the target. In addition to standard company and management due diligence, this also consists of interviews with suppliers, customers, competitors, creditors, relevant government officials, or whoever has knowledge relating to the target. Key areas examined are:

• Financial
• Market
• Product & Technology
• Management
• Price Modeling

The final analysis is designed to provide as strong support possible for decision-making, with or without “Go/No Go” Recommendations. All analysis and recommendations are supported.

c) Value Enhancement
GCiS can work with companies in protecting and enhancing the value of their investments in China. This can be in the form of management assistance, working capital investment, product bundling, problem-solving, or other services.

The following figure summarizes what GCiS can offer in Private Equity research in China.

To receive further information on on this service, please e-mail us and request the GCiS Investment Research PDF File.