Business Valuation

Business Valuation

Real Estate Valuation

Real Estate Valuation

Machinery & Equipment Valuation

Machinery & Equipment Valuation

China Iron Market 1Q2015 Review

China Iron Market 1Q2015 Review

Australia holds the largest amount of iron ore reserves

According to the U.S.Geological Survey (USGS), world total reserves of iron amount to about 81,000 million tonnes contained within 170,000 million tonnes of crude ore. Australia and Brazil are among the world’s largest iron ore holders and hold a large portion of the world’s iron ore reserves. As of 2013, Australia had reserves of 17,000 million tonnes of iron content and 35,000 million tonnes of crude ore while the figures for Brazil were 16,000 million tonnes and 31,000 million tonnes respectively.

Continue reading

Coal Consumption in Asia Pacific Power Sector

Coal Consumption in Asia Pacific Power Sector

Overview of coal power generation in Asia Pacific countries

Coal is a crucial fuel for the generation of electricity and it is reported that over 40% of electricity generated worldwide in 2013 was fueled by coal. Mongolia and South Africa used coal to generate more than 90% of each country’s total electricity in 2013. Coal is also a major source in some Asia Pacific countries; China, Australia, and India generated more than half of their electricity by coal. In Indonesia and Japan, coal is used to generate 48% and 21% of electricity respectively. 

  

Continue reading

Fair Value Management

Fair Value Management

‘You can only manage what you can measure.’

Since the adoption of International Financial Reporting Standards (IFRS), the underlying principles of financial reporting have been moving towards the concept of fair value from historical cost.  Advocates believe fair value based reporting can provide more relevant, useful, and comparable information on the value of a company and its assets and liabilities.  Critics counter that earnings and other financial metrics are too vulnerable to short term changes in market expectation and sentiment, which have an impact on fair value.  Regardless whether you agree or disagree with the fair value concept, the best approach is to be proactive when dealing with it, so that there are no surprises.  Instead of passively waiting for, and being adversely affected by valuation results, it is wise to plan and prepare in advance.  In what follows we will examine several critical areas of valuation for financial reporting that should be considered.

Continue reading

Asia Pacific Nickel Market

Asia Pacific Nickel Market

With its high melting point and corrosion resistance, nickel is a diversely used metal. Nickel could be found from over 300,000 products, from daily used coins to aerospace application. In the present article, Censere examines the structure of global nickel market and market dynamic in the Asia Pacific Region. 

Asia Pacific Region Nickel Outputs Accounts for more than half of the World’s Production

It is estimated that the total nickel reserves in the world is 75 million tonnes with major reserves is located at Asia Pacific Region. The two largest holders of nickel reserves are Australia and New Caledonia; their reserves are 20 million tonnes and 12 million tonnes respectively. In 2012, the world total mine production of nickel was 2.1 million tonnes, and the Philippines was the largest nickel producer in the year. In the Asia Pacific Region, Australia, China, Indonesia, New Caledonia and the Philippines, produced 54.6% of mine production of nickel and held 51.4% of nickel reserves in the world. 

Continue reading

Leveraging Intellectual Property for Financing

Leveraging Intellectual Property for Financing

As some of us may know, Malaysia announced an Intellectual Property (IP) financing scheme in 2013. The main idea being that the IP could be used as collateral for loans by small and medium enterprises (SMEs) for business expansion. A number of government agencies, some sector/ industry focused, are encouraging innovation by providing support, training and funding ecosystem for sound business ventures. 

For an IP financing scheme to succeed, the government support and participation was always going to be important. After all the government has largely a social and nation building motive unlike other financiers including, banks or investment funds/ venture capitalists, etc. which are answerable to their shareholders with profit maximization being the main motive. As such there is a difference between how risk may be perceived by the government vs other lenders. Although social agenda does not equate to lending to any venture or losing money and still requires careful consideration of the risks involved in lending. The valuation of the IP thus becomes important to understand the future potential, risks involved, amongst other things. 

Continue reading

Measuring the Benefits of the MICE Industry: Hong Kong Case

Measuring the Benefits of the MICE Industry: Hong Kong Case

The Global MICE Industry is Growing

The Meetings, Incentives, Conventions and Exhibitions (MICE) industry is an important segment of the tourism industry, and is a growing sector with great potential. The MICE industry comprises of the upper-stream (such as MICE activity organizers), midstream (such as accommodation, facilities and services suppliers) and downstream (such as adverting agencies, logistics services providers and travel agencies) industries. Therefore, the MICE industry involves a wide range of sectors such as tourism, hotels, transportation, catering, real estate and retail. A successful MICE industry is believed to have significant positive impact on a country’s economy. Apart from bringing significant economic benefits, such as national income and job opportunities, it also benefits a destination by providing opportunities for knowledge sharing, country brand development and network building. 

Continue reading

Mongolia – a Rising Coal Market

Mongolia – a Rising Coal Market

Mongolia is one of the major coking coal producers

By the end of 2011 total global proved recoverable coal reserves stood at 982,744 million tons. Europe (30.8%) and North America (27.5%) held the major recoverable coal reserves. At the country level, USA, Russia, China, Australia and India held the largest coal reserves and,in aggregate, held around 72.4% of the world’s total recoverable reserves. Mongolia has also proven to possess vast resources of coal. According to the Mineral Resources Authority of Mongolia, coal deposits can be found throughout the country.

Continue reading

China Consumer Market – The Supermarket Sector

China Consumer Market – The Supermarket Sector

The Supermarket Sector Experienced Rapid Growth in the Past Decade

Since the early 1990s, when the supermarket sector started to open to private and foreign investors, the Chinese supermarket sector has been expanding massively. In 1992 there were around 2,500 supermarkets in China, and following economic growth and urbanization, the number of supermarket increased fourfold by 2002. The growth trend continued and the number reached 38,554 by 2011. The compound annual growth rate from 2002 to 2011 was 15.82%. As a matter of course, sales volume has also increased significantly from RMB131.8 billion in 2002 to RMB339.8 billion in 2011. Today, the Chinese supermarket sector is quite mature and competitive. 

Continue reading

India Water Security and Wastewater Treatment Market 

India Water Security and Wastewater Treatment Market 

India Suffers from Water Security Problem

With the second largest population in the world and a growing economy, India is a big water consumer. However, as a result of limited water availability and poor infrastructure, India faces a number of challenges. The Water Security Index, created by the Asian Development Bank (ADB), gives India an overall score of 1.6 which is low compared to other Asian countries. Among the five components of the index India gets the lowest scores for household water security, urban water security, and environmental water security. This indicates that India suffers from serious water problems including: (1) poor ability to satisfy household water and sanitation needs, and poor ability to meet hygiene requirements for public health in all communities; (2) insufficient urban water-related services, such as water supply, wastewater treatment, and drainage; and (3) river basins that are in poor health. 

Continue reading

Cleantech Market Review – Recent Developments in Fuel Cells

Cleantech Market Review – Recent Developments in Fuel Cells

Major Applications of Fuel Cells

The evolution of the concept of the fuel cell can be traced back as far as 1801. However, the practical usage of fuel cells only began in the mid 20th century and significant commercialization of fuel cell has only occurred in the past decade.  Nevertheless, fuel cells are expected to play a more important role as power sources in the future due to its desirable characteristics. First of all, unlike conventional power sources, hydrogen fuel cells are emission free as they produce electricity by electrochemical reaction instead of combustion. Secondly, compared to other renewable sources, such as solar energy and wind energy, fuel cells are more reliable as they are not dependent on energy sources which might be periodically short of supply. Theoretically, a fuel cell can run indefinitely as long as it is supplied with source of hydrogen and oxygen.

Continue reading

Intellectual Property Rights in China – An Introduction of Enterprise Name Right

Intellectual Property Rights in China – An Introduction of Enterprise Name Right

Composition of Enterprise Name

Following the development of the market economy in China, enterprise name rights have become an important type of intangible asset for companies, and play an important role in the long-term development of companies. Moreover, companies now attach more importance to the publicity and promotion of their names. As a consequence, enterprise name disputes have become more frequent. This article aims to introduce enterprise name rights in China and some associated legal issues. An enterprise name right is the right, available to a lawfully established enterprise, to lawfully use its name. The administrative area, name, trade, and form of the organization are four composites of an enterprise name. 

  • Administrative area: refers to place where the enterprise is located, for example: Beijing or Shanghai
  • Name: refers to the “name” an enterprise uses to distinguish itself from other individuals or entities, such as Jiaduobao or Panasonic
  • Trade: refers to the enterprise’s business field, such as construction or pharmaceuticals 
  • Form of organization: refers to whether an enterprise is a limited company, joint stock limited company, or some other form of organization
Continue reading

Food Security Problem in China

Food Security Problem in China

The “Food Security” Concept Evolved since 1970

The term “food security” evolved in the mid-1970s at the time of a global food crisis. Primarily, it focused on food supply problems such as the assurance of availability of food and maintenance of stability of price of basic foodstuffs. As time progressed, the definition of food security has also been reviewed and redefined to fit with the changing circumstances. In 1996, new elements, such as safety and nutrition have been incorporated into the definition emphasizing their importance for maintaining a healthy population. Therefore, according to the World Health Organization (WHO), food security consists of three main components:

  • Food availability: sufficient quantities of food available on a consistent basis.
  • Food access: having sufficient resources to obtain appropriate foods for a nutritious diet.
  • Food use: appropriate use based on knowledge of basic nutrition and care, as well as adequate water and sanitation.
Continue reading

China Coal Industry 3Q2013 Update

China Coal Industry 3Q2013 Update

Current Status of the Chinese Coal Industry

The Chinese coal industry is facing a challenge arising from the long term control of the electricity price. This is due to coal being the major resource used in power generation in China. In order to provide a stable electricity price to consumers, the PRC government has closely monitored the volatility of the coal market price. In Dec 2012, China's state council announced it would reduce the stringent monitoring of the coal and electricity dual-pricing system. The major coal producers and government have agreed to take the Bohai-rim Steam-Coal Price Index as the reference for the coal price for power generators. This places a limitation on the development of coal enterprises in China. Maintaining a healthy environment for the coal enterprises to survive has become a controversial and important issue for the industry participants and Government to explore. The coal industry is a traditional industry in China and has played an essential role in economic development and a key role in the supply chain of China. However, this industry has already entered its mature stage and it is difficult to make a great change in the current stage. The Government plays an important role in the development of the coal industry because the industry needs strategic support and guidance from the Government.

Continue reading

SGX New Requirement in IPR Disclosure

SGX New Requirement in IPR Disclosure

The disclosure requirements for listing in Singapore Stock Exchange (SGX) have increased with the recent request of making public all material information related to Intellectual Property Rights (IPR).

IPRs have always been a source of long standing competitive advantage and often companies have been reluctant at providing such information. However, with the updated Listing Rule 703, Singapore is imitating a similar guideline issued by the Hong Kong counterpart a few months earlier.

The new rule aims at creating a safer environment for investors – the stock market house ensures. As modern companies base their success and growth increasingly on IP and other forms of intangible assets, SGX wish to replicates this situation in the documents available to investors. By knowing how much of the business depends on IPRs and how risky these assets are, investors can get a clearer idea on where to put their money.

Continue reading

Transfer Pricing for Intangibles: How to Avoid Making the News

Transfer Pricing for Intangibles: How to Avoid Making the News

About the Author:

Steven Carey is a Senior Partner of Quantera Global and is recognised as one of Hong Kong’s leading transfer pricing advisors in Euromoney Guide to the World’s Leading Transfer Pricing Advisors. He has provided transfer pricing design, documentation and dispute resolution services to multinationals over the past 12 years across Greater China, Asia Pacific and Europe. If you have further inquiry, you can email to : This email address is being protected from spambots. You need JavaScript enabled to view it. .

It would have been impossible over the past six months to have read a newspaper without reading about the taxation challenges faced by some of the world’s largest multinational companies (“MNCs”) and iconic brands, including Apple, Google and Starbucks. This has resulted in, amongst other things, tax audits worldwide for Google, an appearance before a Senate Hearing by Apple’s CEO to defend the company’s tax arrangements, and a public boycott of Starbucks stores in the UK leading to a “voluntary” tax payment by the company to the UK Revenue.

Continue reading

Introduction of Patent Rights in China II

Introduction of Patent Rights in China II
Scope of the China Patent Law and Application Procedures

Patent rights are one type of intellectual property right. The current Patent Law in China protects three types of work including inventions, utility models and designs. The technical aspect of a product is the  primary  protected content of inventions and utility models, whereas patents of design concern new designs of shape, pattern or a combination of the two. The authority overseeing patent issues, including patent application, is the State Intellectual Property Office of P.R.C. (SIPO). The examination and approval of a patent is based on a first-to-file principle. Starting from the filing date, a patented invention  can enjoy a 20 year protection term whilst the term for a utility model and design patent is limited to 10 years.

The general process of applying for a patent right in China is illustrated below; details of each patent type will be discussed in later sections.

Step I: Check if the patent has been registered or not before making an application.

Step II: Documents preparation:

· Inventions &Utility models – Prepare two copies of all the following documents:

Continue reading

The Art of Communicating IR-Value By Lynge Blak

The Art of Communicating IR-Value By Lynge Blak

Introduction

Effective management of investor relations is a crucial advantage for any company and ensures the alignment of shareholder interests.

How can these relationships be managed efficiently and harmony of interests maintained? What tools need to be used? The secrets are revealed in the following interview with Mr. LYNGE BLAK, renowned expert in Investor Relations.

CENSERE: Why do you see communicating IR-value as an art?

LYNGE BLAK:

Continue reading

Private Equity Regulation and Tax Policy Change SNAPSHOT in China, HONG KONG and Singapore

Private Equity Regulation and Tax Policy Change SNAPSHOT in China, HONG KONG and Singapore

Private Equity Regulation SNAPSHOT in HONG KONG, China and Singapore

From 2005 to 2011, the Greater China region, including Mainland China, Hong Kong, Macau and Taiwan, was the hottest Asia-Pacific place for international private equity investment choices. In 2007, the total value of private equity investments in the Greater China region was US$21 billion. Although the investment value was reduced as a result of the global financial crisis from 2008 to 2010, the value has rebounded to US$28 billion in 2011 - even higher than the level recorded in 2007.

Continue reading

Transfer pricing for intangibles: Risk & Opportunities

Transfer pricing for intangibles: Risk & Opportunities

Transfer pricing refers to the way that multinationals price all transactions (goods, services, royalties, interest etc.) between related entities.  Transfer pricing is a primary concern for tax authorities that want a fair share of tax revenue and for multinationals that want a true measure of their profit driving activities. Such transactions need to be priced on an “arm’s length” basis and multinational taxpayers are faced with significant compliance obligations and penalties to ensure compliance with this principle.

Since 60-80% of the value of an MNC is considered to lie in its intangible assets, it is no surprise that the OECD and tax authorities globally are now particularly focused on this aspect of transfer pricing.  The potential risks can include disallowance of tax deductions for license fee/royalty payments paid to related parties, arguments for significant exit taxes where intangibles are moved between group entities and claims for increased profitability in local distributors due to the presence of local marketing intangibles.

Continue reading

LCOE Valuation – The Prudent Way of Looking at Energy Investments

LCOE Valuation – The Prudent Way of Looking at Energy Investments

Levelised cost of energy (“LCOE”) provides greater accuracy when appraising energy projects than current methods. LCOE is expressed in cents per kilowatt hour (kWh), and takes into account not only the capital cost of building a project, but also the operating and maintenance expenses incurred (such as the length of a power purchase agreement).  As it doesn’t include the profit a plant owner desires, LCOE is often not adapted by buy or sell side stakeholders now that analysis often reflects projects with bearish returns. 

The banks and project financiers who apply LCOE to their models typically hire consulting firms to generate LCOE analyses in order to help them make investment decisions.  Some large developers such as Siemens and General Electric, they have internal teams performing the service internally.  LCOE analysis is not only valuable for developers and bankers; it is also useful for policy makers, with particular regards to industries reliant on government incentives, like solar energy.

Continue reading