The importance of scale has been demonstrated. There were fewer competitors in the market, reducing the damage from vicious competition. On the other hand, advertising prices have risen, leaving the company in a better situation at the negotiation table.

Hina also helped the U.S. company NeoPhotonics to invest in and acquire Shenzhen Photon Technology Co. Ltd. by aiding in the execution of the acquisition and integration. With its turnover doubled, NeoPhotonics has become one of the world's largest optical network businesses, with over 2,000 employees. Hina recently helped NeoPhotonics finance another $75 million.

What do you think of the current M&A situation in China? What are the obvious problems?

The overall M&A environment in China is good, but more skills are needed in the M&A structure. "Win-win" should be strived for at all times. Otherwise failure is inevitable. Appropriate arrangements on how to set up stock incentive measures, how to fully integrate activities with the entrepreneur and how to define the role of management are vital. A successful acquisition will guarantee maximum benefits for both the acquirer and the acquired. Framedia did not choose an IPO, opting rather to be acquired by Focus Media, from which Framedia benefited greatly. This is a typical win-win situation. China's environment is very suitable for M&A, and many large businesses grow in this way. But in China, there is a shortage of experienced leaders in M&A, making personnel training vital for success.

Currently, there are some obvious problems: Firstly, the M&A cost is very high because of the due diligence and approval process, as well as other factors. As a result, it is very difficult to handle a trans-sector and cross-border M&A case in China. Secondly, there are many restrictions on foreign institutions. For example, Hina cannot work with public companies in China because we have a "foreign passport." Also, some domestic companies deliberately delay payment of consulting fees.

You said that you hope Hina will help to redefine the investment market in the future. How do you view the investment market of the future?

Hina is currently involved in M&A and financing. In the future we will manage funds and get involved in IPOs. At this stage, we want to focus on Hina's main strength, which is to provide financial services for M&A and financing. Investment banking is new in China, and in order to go global, many aspects including credibility and operational skills need to be improved. Development in the future will be even faster.

(Xinhua Finance)

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