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Sector Expertise

China’s economy is quickly evolving from a manufacturing based, export driven economy to an economy driven by a rapidly expanding urban middle class consumer market. The disposable income of China’s middle class will grow by 8 times in the next decade. This growth will create tremendous opportunities for both domestic and international companies in China and their investors. TBG aims at investing our resources alongside our clients in this next wave of growth.

Healthcare


The Chinese healthcare industry possesses huge market potential derived not only from the enormous population base, but also the unmet healthcare needs of the rapidly growing economy and increasing consumption capacity. In addition, due to China's internationalized business environment, numerous qualified professionals, and relatively low cost level, China is becoming an important outsourcing destination in the healthcare industry. The Chinese healthcare industry has traditionally been one of the most promising sectors for global investment.

 

Cleantech

 

China's size and impressive economic growth present huge environmental challenges, which are high on the government's agenda. China's Renewable Energy Law provides incentives for investment in alternative energy, especially in the wind, solar and biofuel sectors. China is planning to reduce its dependency on coal from 70% of its energy needs to 60% by 2020 by increasing its use of renewable energy sources from 6% today to 15% in 2020.

 

General Industries

 

The year 2006 was a milestone for China’s auto industry as it passed Japan to become the world’s second largest auto market after the United States. By the end of 2006, China’s auto industry sold 7.2 million vehicles representing a 23% CAGR since 2000. This strong growth continued in 2007 when China’s auto industry grew at a 27% rate. By 2015, China is expected to become the world’s largest vehicle producer. The days of the bicycle forming the backbone of transportation in this country are already a hazy memory.

 

Consumer Products

 

In order to continue to feed a nation comprising 20% of the world's population on only 7% of the world's arable land, China provides investors with a booming agricultural and consumer goods market. As of 2009, the Chinese government has promulgated 6 "No. 1 Documents" to support agriculture and provide investors with an exciting investment environment. In addition to opportunities to improve crop yield and productivity, China's middle class is spending an increasing amount of money as their diets improve and tastes change.

 

Financial Institutions

 

China has largely avoided the global financial turmoil due to its relatively closed financial system, adequate liquidity and lack of significant exposure to US subprime products. Overseas investment in China has tapered off as financial institutions abroad face a credit crunch and uncertain futures due to dramatic losses in the value of overseas investments. Domestic consolidation has, for the most part, continued at a healthy pace as investment activities have been largely focused on fund management companies, trust companies, insurance and insurance intermediaries, as well as financial leasing companies.

During this time of financial instability, TBG was still able to close a landmark multi-billion dollar cross-border debt financing transaction. In the future, TBG will focus on cross-border M&A transactions involving domestic financial institutions.

 

Media & Technology

 

China’s Media and Technology sector has experienced tremendous growth over the past decade. Primarily driven by the sustained economic growth, industry upgrading and globalization, the growth momentum in the sector will continue. China’s media market is expected to become the 3rd largest in the world by revenue in 2010. TBG believes the Media and Technology sector possesses a significant amount of potential in new media, computer service, as well as emerging opportunities across various media/IT platforms. The Media and Technology sector remains a hot-spot for global venture capital and private equity investments. Consolidation has occurred in the fragmented segments (e.g. out-of-home media/IT outsourcing). Driven by the China growth story, global alliances/JVs/M&As will continue to direct the market, both domestically and internationally.

 

Natural Resources

 

As China's economic development continues at a historically high rate, the need for raw materials and energy also continues to grow. While China is rich in natural resources, the domestic supply of most commodities is far from meeting internal demand, making it necessary for China to import long-term supplies of natural resources from overseas. Over the past few years China has been subject to fluctuating and increasing commodity prices making cost control increasingly difficult. Due to the current economic downturn, the Chinese government is strongly encouraging the major Chinese manufacturers to secure long-term supplies of natural resources overseas through direct investment and ownership. It is expected that Chinese companies, both State Owned and private, will acquire ownership in overseas resource properties.

 

Education

 

China’s education market has been growing rapidly as a result of solid economic growth, favorable demographic and consumer spending trends, increased government and private investments and shifting societal importance placed on higher and professional education. China's total market size is expected to grow from US$143 bn in 2007 to US$200 bn in 2010, enjoying the highest growth rate in the world. The education sector has seen unprecedented investments from VC/PEs in the last few years - 30 transactions were completed and US$458 million was invested in 2008 alone. Early education, vocational training, test preparation and privately-run colleges were the most active sub-sectors. The market is still highly fragmented with many small players, but has started to  undergo consolidation.

 

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