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  • ■ Mirae Asset Global Investments is one of the world’s leading equity investors in emerging markets ■ Mirae Asset Global Investments is one of Asia’s largest asset managers ■ Recognized by various surveys and publications ■ best in emerging market equity and the best Korea onshore fund house by Asian Investor - 2009 Investment Performance Awards for institutional fund management.
  • ■ Offices in largest emerging markets – China, India, Brazil, Vietnam & Korea Offices in global financial hubs – Hong Kong, New York & London ■ Total # of staffs (global: 528, Korea(Mirae Asset + MAPS: 298, overseas: 230) ■ 167 investment professionals with special focus in emerging markets, AUM of $54.2 bil ■ Funds domiciled in Korea, India, Brazil and US. Luxembourg domiciled SICAV funds available to global clients ■ Global Business - China : MOU with local partner. Waiting for approval for JV asset management company Received 2 nd QFII quota. (Total $250 mil) - USA : Launched 6 mutual funds - Japan : Launched Daiwa Mirae Asset Korean Equity fund. (KRW $320 bil) - Brazil & India : Partnership with major distributors
  • ■ We offer a wide array of products to meet the diverse needs of our clients - By type : Equity, Fixed Income, Balanced Funds & MMF. Subsidiary MAPS offers alternative investment products including Real-estate funds, PEFs and commodity funds - By Region & Sector : Our investment products cover most financial markets and offer opportunities to invest in particular sectors - Products offered to clients around the world – various domiciles and SICAV
  • ■ Established in 1997, launched Korea’s first mutual fund in 1998 ■ Opened first global operations in Hong Kong, first overseas office for Korean fund manager ■ Launch Korea’s first Real Estate investment trust and PEF in 2004 ■ Launched Korea’s first overseas investment fund in 2005 ■ Launched Korea’s first Offshore fund in 2008 ■ True pioneer in Korea’s mutual fund market  achievements recognized by Harvard Business School and selected as case study

Eur trip final Eur trip final Presentation Transcript

  • Mirae Asset Global Investments Emerging Market Experts China: Beyond the Growth Story
    • Cong Li, CPA
    • Chief Investment Officer, Executive Director & Head of China Division
    • 16 years investment experience, 20 years working experience
    • Cong Li is the Chief Investment Officer for Mirae Asset Global Investments (HK) and Head of China Research & Investment. He manages Key Mirae Asset Portfolios, including the China Equity Funds, and supervises a team that looks after our wide range of Asia-Pacific products, including country, regional and sector funds.
    • Prior to joining Mirae Asset Global Investments (HK), Dr. Cong Li was a Fund Manager at Hong Kong based Hamon Investment Group with responsibility for stock selection in Greater China equities markets. He is also known as one of the few pioneering fund managers in the domestic China equities market.
    • Cong started his investment management career at Hua Yin International Trust & Investment Company in 1994 as an Investment Manager covering equities, fixed income and commodity futures. He subsequently left to join Shanghai-based Hua An Fund Management Company in 1998, where he managed three styles of funds in the China markets. He was named as one of China’s star fund managers by New Fortune Magazine in 2002 for consistent, outstanding performance.
    • Cong Li holds a Chartered Public Accountant qualification in China, a PhD in Business Administration from Shanghai Jiao Tong University (China) and a Master’s degree in Public Administration from Columbia University, New York (USA).
    Presenter
  • 1 Mirae Asset Global Investments 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • As one of the world’s leading investors in emerging market equities , Mirae Asset Global Investments focuses on delivering consistent performance through a team-based, bottom-up investment approach supported by extensive on-the-ground research coverage of the markets in which we invest Emerging Market Experts 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • Updated as of March 2011
    • (*) The office in Vietnam and China are representative offices
    • (**) The office in UK is a sales office of Mirae Asset Global Investments
    Our Global Presence (Korea) (Korea) 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Flagship Products Mirae Asset Global Discovery Fund: International flagship SICAV range domiciled in Luxembourg predominantly for investors in Europe and Asia-Pacific regions
    • Asia Pacific Equity
    • China Sector Leader Equity
    • GEM Sector Leader Equity
    • India Sector Leader Equity
    • Korea Equity
    • GEM Great Consumer Equity*
    • BRIC Sector Leader Equity*
    • BRIC Great Consumer Equity *
    • Asia Great Consumer Equity *
    • Global Bond *
    • Brazil Multi Markets *
    • Brazil Bond *
    Long-term sustainable investment theme based on mega trend of rising consumption in emerging markets Long-term high growth potential investment strategy by focusing on sector leading companies in fast growing economies
    • GEM Great Consumer
    • Asia Great Consumer
    • BRIC Great Consumer*
    • Chindia Great Consumer*
    • GEM Sector Leader
    • AP Sector leader
    • Asia Sector Leader
    • BRIC Sector Leader
    • China Sector Leader
    • Latin America Sector Leader
    • EMEA Sector Leader
    • Chindia Sector Leader
    • India Sector Leader
    • Brazil Sector Leader
    • Russia Sector Leader
    • Global Sector Leader*
    • Korea Sector Leader
    Global, regional and single-country funds that best showcase our investment capabilities
    • Updated as of March 2011
    • (*): To be offered in the near term
    • TIGER KOSPI 200
    SICAV Funds Sector Leader Funds Great Consumer Theme ETFs 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Mutual Fund Pioneer Korea’s First The first Asian asset management company ever to be selected as a case study by Harvard Business School, analysing our history and track record in pioneering, innovating and shaping our domestic and regional asset management industries. 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX 2 China Investment Capability
  • Team Structure – China Division
    • Source: Mirae Asset Global Investments (Hong Kong) as of 1 May 2011
    China Research Team China Investment Team Head: Byung Ha Kim Investment Analyst Wenlong Li Investment Analyst Element Sun CIO / Head Cong Li Portfolio Manager Assistant Jason Jin Portfolio Manager Assistant Ashley Hsu Investment Analyst Lucy Luo Investment Analyst Heyi Chan Team of 8 specialist portfolio managers and analysts, managing $4.59 billion of Chinese equities* 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Investment Management Organization – Asia Investment Strategy Committee Risk Management Committee Asia Team Head: Sungho Im AP Research Team Head: David Glickman China Investment Team Head: Byung Ha Kim Alternative Strategy Team Head: Hunbok Lee Pacific & Consumer Team Head: Marco Giubin China Research Team Asset Allocation & Quant Team Head: Jung Ho Rhee ETF Team Head: Ko Tseng CIO Cong Li China team sits alongside and interacts with teams covering Asia Pacific from a regional or sector perspective AP Investment Division Head: Rahul Chadha AP Research Division China Division Head: Cong Li Head of AP Investment Strategy: Strategist – Colin DAVIS Alternative Investment Division Head: Hunbok Lee Source: Mirae Asset Global Investments (Hong Kong) as of 1 May 2011 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • 3 Beyond the Growth Story 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Thirty years of fast growth and big changes Beijing 1980s Shanghai 1980s Beijing Now Shanghai Now Source: Bloomberg, NBS 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Deng’s plan achieved early
    • Deng’s Three Step Plan
    • *8.4% (2011-2015) & 7.0%(2016-2020), forecasted by World Bank
    • ** Total Factor Productivity
    • *** 1) Technological innovation and structural adjustment;
    • 2) Reallocation of labor from low-productivity to high-productivity
    • Source: Morgan Stanley, Oct 2010
    100 years anniversary of Country establishment 1978 1990 2000 2020 2050 1949 PRC Established 1980 Reform started Base year of “3-step plan” 1987 “ 3-step plan” officially published End year of “1 st step” End year of “2nd step” and also New “3-step plan” published 100 years anniversary of CCP establishment 4× 1 st Step 2 nd Step 3 rd Step 4× GDP per Capita   GDP per Capita 1980 1990 2000 2008 2020 2050 Deng’s “3-step plan” 250 500 800-1000 4,000 Actual 250 369 854 3,266 New “3-step plan” 4,000   GDP growth Capital contribution Labor contribution **TFP During 78-09: 9.8% 3.2-5.1% 0.7-2.8% 3.5-3.8% In next decade: 7.5-9.6%* Decline (due to lower saving ratio) Decline to 0.23%(1.28%) Rising*** 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • China’s economy is large, but highly diverse and fragmented GDP GDP per capita (RMB,000s) 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Current Portfolio Themes 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Mirae Asset China Sector Leader Equity Fund
    • Objective: To achieve long term growth in the share price by investing mainly in equities and equity related securities of sector leading companies domiciled in or exercising a large portion of their economic activity in China (limited to B Shares) and Hong Kong
          • Mirae Asset defines “sector leader” companies as those which have and can maintain, or achieve in the future, a dominant position within their respective industries
    • Investment style: Concentrated portfolio of 35-40 stocks. Bottom-up, research- driven approach
    • Legal structure: Luxembourg-domiciled SICAV
    • Benchmark: MSCI China
    • Inception date: 22 nd July, 2008 (I-EUR share class)
    • Currency: USD (base), EUR & GBP share classes available
    1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • Will transfer to a consumption driven economy
    • Labour market will see a steady labour wage increase
    Household income growth lagging government and corporate Source: JPMorgan economics A new consumption power Source: CEIC Consumption - Family income to double 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Percentage of households Cars penetration rate Consumption - Middle class Source: Euro Monitor Source: World Bank, CLSA Asia-Pacific Markets 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • 1-child policy (1979) and new behaviour
    • Brand awareness and recognition
    Source: NBS, CNNIC, iResearch Source: CNNIC Online Users (mn) Hours per day spent online per Internet user (2009) Consumption - Younger generation 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • Fast growing rich population
    • Experience higher growth in luxury segment
    Number of households with assets above USD 1 million (1,000) Auto Sales value by Segment CAGR (05-09) Source: ACMR Source: ACMR Source: Original Estimate Consumption - Luxury 2010 Mean wealth per adult Median wealth per adult Distribution of adults (%) by USD   USD USD <1000 1k - 10k 10k-100k >100k India 4,910 1,300 42.8 50.1 6.6 0.4 Russia 10,408 3,692 24.0 51.4 23.5 1.1 China 17,126 6,327 6.8 59.6 31.8 1.8 Brazil 25,270 5,793 21.0 41.1 34.1 3.7 Japan 201,387 102,946 0.0 6.2 42.7 51.1 US 236,213 47,771 3.5 23.8 36.5 36.2 UK 229,940 78,765 0.3 12.2 40.9 46.6 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • Machinery
    • Services
    Industrial upgrading Source: CICC Source: Windin 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • Size and numbers of cities both on the rise in China
    • Urbanization is an ongoing process
    Urbanization Incomplete urbanization Source: Institute of Population and Labor Economics, Chinese Academy of Social Sciences Source: City population NO. of cities World Asia China Over 10mn population 26 14 3 Over 5mn (including over 10mn) 33 11 Over 1mn (including over 5mn) 79   Rank Population (m) Guangzhou* 2 24.2 Shanghai 10 18.4 Beijing 17 13.6 Shenzhen, Wuhan, Tianjin, Hong Kong > 5mn Shenyang, Chongqing, Xi’an, Chengdu * Northern Pearl River Delta incl. Dongguan, Foshan, Jiangmen, Zhongshan 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • China: One of the major energy consumers and CO 2 emitters
    • Energy efficiency continues to improve
    • Aggressive alternative energy plan
    Source: Wind, BP Statistical Review Source: World bank data Clean energy : Alternatives and efficiency Source: NDRC, BP Statistical Review Source: EIA 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • SOE numbers have declined
    • Output concentrated
    • More efficient for private sector
    Source: China Private Sector Statistical Yearbook 2010, CEI Consolidation & deregulation Source: CLSA 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Stock Examples 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • Tencent (700.HK)
    • Company profile:
    • Internet industry: Rapid rise in internet user base, low penetration rate, strong demand for products.
    • Tencent: Pioneering Internet company with a phenomenal platform to leverage on future growth
    • Investment highlights:
    • Massive sticky user base of 523mn
    • No.1 in Instant Messenger
    • No.1 in Online Games
    • No.1 in Online Community
    • No.1 in Mobile Value Added Services
    • No.2 in Online Display Advertising
    • Strong track record of management execution
    • EPS expected to grow by 35% in 2011E
    Stock Example – Tencent Note: The information above is strictly for information purposes only and is not a recommendation to buy or sell a security, or an indication of the company’s holdings at any one time Active registered user accounts (mn) Source: Company data Source: Bloomberg Source: Bloomberg, 2011/5/3 Country CHINA Sector IT Industry Internet Market Cap (USD mn) 52,548 Price (HKD) 222.2 2011 Consensus PE 30.8x PB 11.4x Div. YLD (%) 0.4 Sales Growth (%) 37.6 EPS Growth (%) 35.0 ROE (%) 40.9 ROA (%) 26.1 Gross Margin (%) 66.8 Net Margin (%) 41.0 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • China Southern Locomotive (1766.HK)
    • Company profile:
    • Railway equipment manufacturing industry: Investment plan in railway construction, metro line construction and export opportunities drive future growth
    • One of the two duopoly rolling stock manufacturers, strong R&D force and high local content
    • Investment highlights:
    • China’s total investment in rolling stock procurement to reach RMB180bn in 2012E
    • The rolling stock market is a duopoly by CSR and CNR
    • Strong R&D force that helps CSR to achieve 90% localization rate in 7,200kW high-power locomotive and 250km/h high-speed trains
    • Continuous localization progress, change of product mix and cost down effort help improve margins
    • Revenue expected to grow by 41% in 2011E
    Stock Example – China Southern Locomotive Source: Company data, MoR, Mirae Asset Source: Bloomberg Note: All information above is strictly for information purpose only and are not recommendations to buy or sell a security, or an indication of the company’s holdings at any one time Source: Bloomberg, 2011/5/3 Country CHINA Sector Industrials Industry Machinery Market Cap (USD mn) 12,473 Price (HKD) 8.43 2011 Consensus PE 21.3x PB 3.6x Div. YLD (%) 1.1 Sales Growth (%) 38.6 EPS Growth (%) 41.2 ROE (%) 18.6 ROA (%) 5.4 Gross Margin (%) 17.4 Net Margin (%) 4.5 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • Belle (1880.HK)
    • Company profile:
    • Largest leather footwear retailer in China, with around 30% market share in China’s department store segment and owning 6 of the top 10 best-selling brands in China
    • One of the largest sportswear distributors in China, covering brands including Nike, Adidas and Kappa
    • Investment highlights :
    • Extensive distribution network creates high entry barrier
    • Vertically integrated business model lowers risks and generates better margin
    • Low footwear penetration rate (7% urban) offers strong growth potential in the coming years
    • Sales revenue and net profit are expected to grow by over 20% p.a. in 2011E-1012E
    Stock Example – Belle Source: Euromonitor Source: Bloomberg Note: All information above is strictly for information purpose only and are not recommendations to buy or sell a security, or an indication of the company’s holdings at any one time Source: Bloomberg, 2011/5/3 Country HK Sector CD Industry Retail Market Cap (USD mn) 16,481 Price (HKD) 15.18 2011 Consensus PE 25.4x PB 5.6x Div. YLD (%) 1.7 Sales Growth (%) 21.5 EPS Growth (%) 23.8 ROE (%) 23.1 ROA (%) 19.7 Gross Margin (%) 56.3 Net Margin (%) 14.4 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Fund Performance & Allocation 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • Fund overview
    Mirae Asset China Sector Leader Equity Fund Benchmark : MSCI China refers to MSCI China (Gross), which includes dividend/income reinvestment. Source: Mirae Asset Global Investments (HK) as of March 31, 2011. All performance numbers are net of fees, NAV to NAV, in USD with dividend reinvested. The fund performance information is based on CLASS I which is for professional or qualified investors only. The returns may not be the same as class A which is for retail investors. The fund inception date was on 22 July 2008 whilst Class I (USD) was launched on 2 Sept 2008. The exchange rate is provided by Seoul Money Brokerage Services. Fund Performance (%) 133.2 127.2 Name Mirae Asset China Sector Leader Equity Fund Objective The fund aims to achieve long-term growth by investing mainly in equities and equity related securities of sector leading companies domiciled in or exercising a large portion of their economic activity in China (limited to B-shares) and Hong Kong . Launch Date (Class I USD) 2 Sept 2008 Fund Manager & Location Cong Li, Hong Kong Fund Domicile Luxembourg Total AUM (as of March 31, 2011) USD 44.37 Million Benchmark MSCI China Index Fund Structure Open-ended mutual fund Fund base Currency USD Bloomberg Code MIRCSLU LX ISIN code LU0336296644 Custodian Citibank International plc (Luxembourg branch) 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • Performance overview
    Mirae Asset China Sector Leader Equity Fund Benchmark : MSCI China refers to MSCI China (Gross), which includes dividend/income reinvestment. Source: Mirae Asset Global Investments (HK) as of March 31, 2011. All performance numbers are net of fees, NAV to NAV, in USD with dividend reinvested. The fund performance information is based on CLASS I which is for professional or qualified investors only. The returns may not be the same as class A which is for retail investors. The fund inception date was on 22 July 2008 whilst Class I (USD) was launched on 2 Sept 2008. The exchange rate is provided by Seoul Money Brokerage Services. Fund annual return (USD) Returns (%) 3 mths 6 mths 1 year Since Launch Fund -5.63% 1.09% 12.18% 33.23% Benchmark -3.09% -0.56% 4.51% 27.16% Returns (%) Since Launch to Dec 2008 CY 2009 CY 2010 2011 YTD Fund -31.64% 62.56% 27.04% -5.63% Benchmark -26.27% 58.33% 12.40% -3.09% 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • Allocation information – sector weightings and market cap breakdown
    Mirae Asset China Sector Leader Equity Fund Source: Mirae Asset Global Investments (HK) internal data as of February 28, 2011. Due to rounding, the sum of portfolio may not equal 100% For more information about fees, expenses, turnover and risks, please refer to the relevant Prospectus. Sector weightings Market cap breakdown Sector Fund Benchmark Difference Consumer Discretionary 21.32% 5.41% 15.91% Materials 18.95% 6.13% 12.82% IT 14.58% 6.40% 8.18% Industrials 14.20% 8.01% 6.18% Energy 12.02% 18.36% -6.34% Financials 8.09% 37.01% -28.91% Health Care 5.18% 0.76% 4.42% Others 0.00% 17.92% -17.92% Cash / Liquidity 5.66% 0.00% 5.66% Market Cap. No. of Securities in Portfolio Portfolio Weighting Benchmark Weighting Difference <Total Equity> 26 94.34% 100.00% -5.66% Large Cap > USD 1 bn 16 61.03% 99.48% -38.44% Mid Cap 8 25.06% 0.52% 24.53% Small Cap 2 8.25% 0.00% 8.25% Cash / Liquidity   5.66% 0.00% 5.66% Total 26 100.00% 100.00%   1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • Allocation – top 5 holdings
    Mirae Asset China Sector Leader Equity Fund Source: Mirae Asset Global Investments (HK) internal data as of February 28, 2011. Due to rounding, the sum of portfolio may not equal 100% For more information about fees, expenses, turnover and risks, please refer to the relevant Prospectus. Top 5 holdings Holding Portfolio Weighting Benchmark Weighting Difference Sector Chongqing Rural Commercial Bank Co. Ltd. 6.01% 0.00% 6.01% Financials Yanzhou Coal Mining Co. Ltd. 5.16% 0.89% 4.28% Energy Trony Solar Holdings Co. Ltd. 4.81% 0.00% 4.81% IT China Suntien Green Energy Corp. Ltd. 4.78% 0.00% 4.78% Energy Pou Sheng International Holdings Ltd. 4.43% 0.00% 4.43% Consumer Discretionary 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • The Road Ahead: Market Outlook 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Crisis: A correction
    • What do markets tell us?
    • Fed easing, dollar falling, gold/oil rising, and EM outperforming for a decade
    • It is a correction, in the middle; but the trend is there
    US 10-yr treasury bond YTM & USD index SPX & MXEF & MSEUBRIC Index (2000/1/31=100) Source: Bloomberg, 2000/1 -2011/4 Source: Bloomberg, 2000/1 -2011/4 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Crisis: a correction (cont’d)
    • Reactions and consequences
    • Money:
    • Intervention from government: MP& FP
    • Deleveraging in private areas
    • Liquidity flooding: DM & EM
    • Wars:
    • Tensions arise due to wealth redistribution among countries, and among classes
    • Trade wars and currency wars
    • Geopolitical controversies
    • Bubbles:
    • Central Banks: magician?
    • Economy vs. illusion
    • Nothing is made from nothing
    • What are the implications to investors?
    • Volatility!
    • Bubbles!
    • Inflations!
    • Low ROC!
    • Premium to quality and growth?
    RICIAGTR/CRY/GOLD Index (2000/1/31=100) Source: Bloomberg, 2000/1 – 2011/4 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • Source: Bloomberg, Facset, Daiwa Securities
    Positive outlook
    • Policy less tightening
    • Growth sustainable
    • Valuation attractive
    MSCI China A MSCI China As a % of market cap Consumer Discretionary 10.1 4.6 Consumer Staple 6.6 4.8 Health Care 5.8 0.5 Industrials 20.0 6.3 IT 4.5 6.0 Sub-total 47.0 22.2 Free float mrkt cap (USD, bn) Consensus Estimated   P/E EPS growth % P/B ROE(%) YTD(%) 6M(%) 1Y(%) 2011-5-3 2011E 2012E 2012E 2013E 2011E 2011E MSCI China 754 11.8x 10.2x 15.3 13.6 2.0x 20.4 4.1 -3.0 10.6 MSCI China A 1,007 15.9x 12.8x 24.5 18.9 2.5x 18.4 0.7 -7.6 5.3 CSI 300 801 14.5x 11.9x 22.1 18.3 2.4x 18.7 2.6 -7.3 4.7 Hang Seng Index 885 12.5x 11.1x 12.3 12.5 1.7x 18.2 2.6 -0.2 12.0 MSCI Brazil 692 10.2x 9.1x 11.8 11.1 1.6x 22.1 0.0 -0.3 7.5 MSCI Russia 451 7.0x 6.5x 7.9 7.7 1.1x 20.3 15.5 26.7 28.0 MSCI India 366 15.2x 12.9x 18.3 4.4 2.5x 22.2 -8.0 -9.0 4.9 MSCI Korea 619 11.5x 10.2x 12.9 9.2 1.6x 17.8 9.0 18.8 30.6 MSCI Taiwan 446 14.0x 12.2x 15.0 11.8 1.9x 18.7 -0.3 7.4 11.3 MSCI AC Asia pacific ex JP 4,167 13.3x 11.6x 14.2 11.1 1.9x 19.7 6.3 7.5 20.5 MSCI Japan 2,455 14.5x 11.5x 25.6 8.0 1.0x 9.2 -4.0 7.1 -12.3 MSCI Europe 3,737 11.4x 10.1x 12.5 8.4 1.5x 19.2 2.9 6.2 8.6 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Appendix 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • What are the Risks? 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Growth slowing down?  Twelfth Five-Year Plan: Growth inside 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Inflation rising?  short-term and softening Source: Bloomberg, NBS Source: SWS research Source: Bloomberg, PBOC Source: Bloomberg, NBS CPI breakdown (%) FY2006 Chg FY2011
    • Food
    33.6 -2.2 31.4 2. Tobacco and liquor 4.5 -0.5 4.0 3. Clothing 9.0 -0.5 8.5 4. Household facilities 6.2 -0.4 5.8 5. Healthcare, personal products 9.4 -0.4 9.0 6. Transportation, communication 9.3 -0.1 9.3 7. Recreation, education, services 14.4 -0.2 14.2 8. Residence 13.6 4.2 17.8 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Property bubble? Source: CLSA Source: PBOC, Windin 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Property bubble?  Policy / Social housing Source: CEIC, Haitong Securities estimated Source: Mirae Asset estimated 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
  • Financial status?  Government & Bank Source: Windin Source: Windin Source: SSE, SZSE, Macquarie Source: PBOC, Windin 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
    • Productivity remains highly competitive
    • Older people have less education
    • Labour efficiency improved
    Source: CLSA, Haver analytics Labour cost pressure? Source: Institute of Population and Labor Economics, Chinese Academy of Social Sciences Source: Windin, NBS Source: CEIC Higher institution graduates (mn) 2009 Factory worker Salary ($US/Month) Labor Productivity (Per person) Indonesia 108 124 India 125 135 China 146 226 Thailand 167 118 Malaysia 384 124 Taiwan 852 122 Singapore 942 118 Hong Kong 1,032 127 Korea 1,494 127 Australia 2,517 107 Japan 2,600 107 UK 2,809 108 US 2,917 112 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX
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    Disclaimer 1. ABOUT MIRAE ASSET GLOBAL INVESTMENTS 2. CHINA INVESTMENT CAPABILITY 3. CHINA: BEYOND THE GROWTH STORY APPENDIX