A Rising Player in Aviation Finance HUANG Bo, Chief Commercial - PowerPoint PPT Presentation

A Rising Player in Aviation Finance HUANG Bo, Chief Commercial Officer, CMB Financial Leasing

Rising Player in Aviation Finance Huang Bo Chief Commercial Officer CMB Leasing Co., Ltd.

Contents  Huge Demand of China Aviation Industry  The Growing of Chinese Lessor  Who is China Merchants Bank Leasing Strictly Confidential 3

China GDP Growth compared to World 12.7% 14.2% 20.0% 10.6% 15.0% 9.5% 9.6% 7.8% 7.7% 7.3% 9.2% 10.0% 4.1% 3.9% 4.1% 2.8% 2.3% 2.4% 2.5% 5.0% 1.5% -2.1% 0.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 -5.0% World China SOURCE ： the world bank. 4

Aviation Industry Growth in China 37.5% 40% RPK Growth Rate(China) 35% RPK Growth Rate(World) 30% 25% 19.7% 20% 16.1% 15.9% 15.6% 14.1% 15% 10.8% 10.7% 9.5% 8.9% 10% 11.4% 4.3% 5% 8.8% 7.5% 8.1% 6.3% 6.4% 5.6% 4.2% 4.5% 0 % 1.2% -5% - 1.2% -10% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 SOURCE ： CAAC and Wind 5

Aviation Industry Growth in China Total Passengers in 2014 Total Passengers (million) 9.0 7.6 8.0 100 Milliom 600 440 7.0 390 354 6.0 400 319 290 5.0 3.9 4.0 200 3.0 0 2.0 1.4 1.1 1.0 2011 2012 2013 2014 2015 0.0 US UK JAPAN CHINA Total Profit (billion USD) 3.0 Average Flight Times Per Year 10.0 8.4 2.4 2.5 5.6 2.1 4.5 4.4 2.0 3.8 5.0 1.5 0.9 1.0 - 0.5 0.3 2011 2012 2013 2014 2015 0.0 US UK JAPAN CHINA SOURCE ： CAAC and Wind 6

Aviation Industry Growth in China International travelers （ 100 million person ） Domestic travelers （ 100 million person ） 2 1 40 1.17 36.11 CAGR=16.83% CAGR=13.25% 32.62 0.98 29.57 1 30 26.41 0.83 0.70 17.12 19.02 21.03 0.57 20 0.46 0.48 10 0 0 2008 2009 2010 2011 2012 2013 2014 2008 2009 2010 2011 2012 2013 2014 • In the past 7 years, annual growth rate of domestic travelers in China is about 13.3%, while the rate of international travelers climbs to 16.8%. • As the second largest market in the world, the average flight times in china is only 0.3. It is expected the number will reach to 0.47 by 2020, which will bring at least 700million demand. SOURCE ： CAAC and Wind 7

ONE BELT ONE ROAD Infrastructure Oil and Gas Construction SOURCE ： Reuters 8

Opportunities from One Belt One Road Infrastructure Oil and Gas Construction Opportunities Culture and Transportatio Tourism n 9

Global Deployment of Chinese Asset 100% 90% 80% 70% 60% Domestic Asset 50% International Asset 40% 30% 20% 10% 0% 2009 2010 2011 2012 2013 2014 2015 Y2016 Y2017 Y2018 SOURCE ： Internet 10

Contents  Huge Demand of China Aviation Industry  The Growing of Chinese Lessor  Who is China Merchants Bank Leasing Strictly Confidential 11

Classification of Chinese Lessors  Financial Leasing Company: Non-banking financial institution regulated by CBRC.  Leasing Company: Non-banking financial institution regulated by Ministry of Commerce. 12

Milestones VAT Reform More than 600 aircraft traded in Tianjin FTZ 2013 2015 2011 2012 2014 Total asset of the leasing industry amounts to 2B USD. 2007 Financial leasing companies are permitted to conduct 2010 finance lease business with Chinese Banks are SPV in FTZ. allowed to establish leasing companies. (YJF [2007] 462) 13

The Grow Path of Chinese Leasing Industry 2008-2014 Total Asset of Leasing Industry in China 600 Billion USD 477 500 CAGR=68 % 400 200 308 300 238 146 200 116 143 107 100 77 46 46 25 23 11 0 2008 2009 2010 2011 2012 2013 2014 Total Asset of Leasing Company Total Asset of Financial Leasing Company SOURCE ： CBRC and Ministry of Commerce 14

Performance of Chinese lessors  Ranking: 3 in top 20 of the world, 5 in top 30 of the world.  Order Book: Over 500 in order  Activities: Acquisition IPO 15

Top 50 Aircraft Leasing Companies 2014 Company Rank Total fleet value Total fleet Aircraft Leasing&Mgmt 26 38 1,972 62 2014 2013 million USD$ AreCap 1 6 33,099 1,305 Nordic Aviation Capital 27 27 1,968 174 GECAS 2 1 32,507 1,624 BBAM 3 3 11,060 292 Intrepid Avn Group 28 33 1,953 21 SMBC Aviation 4 4 China Aircraft Lsg 29 32 1,772 47 11,037 386 Capital Novus Aviation 30 37 1,673 20 BOC Aviation 5 5 9,445 246 Amentum Capital 31 26 1,599 44 AWAS 6 7 9,222 313 ALAFCO 32 28 1556 50 CIT Aerospace 7 8 9,004 312 Changliang Lsg. Co 33 31 1,490 64 Air Lease 8 9 8,806 235 Guggenheim Avn Partners 34 23 1,331 43 ICBC Leasing 9 13 6,858 168 Aviation Capital 10 10 6,561 272 AVIC International Lsg 35 34 1,281 71 Group Avolon Aerospace Jackson Square AvnIreland 36 40 11 11 6,204 140 1,235 25 Lsg CDB Leasing CMB Financial Lsg 37 - 12 13 5,252 129 1,161 25 Company Doric 12 12 4,383 38 Comsys Aviation Lsg 38 58 1,071 20 Standard Chartered 14 16 4,263 105 Avn Fln Showa Leasing 39 46 871 32 Aircastle Advisor 15 15 4,083 136 Jetscape 40 36 819 43 Jackson Square Apollo Aviation Grp 41 47 16 18 3,671 93 795 55 Aviation FLY Leasing 17 24 3,003 127 Dragon Aviation Lsg 42 43 779 23 MC Aviation 18 17 2,842 90 Partners Banc of America Lsg 43 - 777 26 DAE Capital 19 20 2,778 56 Ireland Macquarie Transportation Partners 44 75 20 19 2,635 132 732 24 AirFinance VEB-Leasing JSC 21 29 2,482 70 SkyWorks Leasing 45 35 703 80 ORIX Aviation 22 21 2,482 123 Century Tokyo Lsg 46 - 673 30 Hong Kong Avn Titan Aviation Lsg 47 39 666 9 23 22 2,271 73 Capital VTB-Leasing 48 53 652 46 BoCom Leasing 24 30 2,101 56 Cargo Aircraft Management 49 41 620 54 Boeing Leasing 25 25 1,982 227 Aldus Aviation 50 51 613 29 SOURCE ： Flightglobal Ascend Fleets and Ascend Values database Total 216,788 2,865 16

Extra Benefits for Chinese Lessors  Strong parent companies Rank Bank Country Market Cap(Sep.30.2015) 1 Wells Fargo & Co US 263.60 Billion USD Industrial & Commercial Bank of 2 China 233.25 Billion USD China(ICBC) 3 JP Morgan Chase & Co US 225.47 Billion USD 4 China Construction Bank China 171.56 Billion USD 5 Bank of America US 163.10 Billion USD 6 Bank of China China 162.11 Billion USD 7 Agricultural Bank of China China 154.95 Billion USD 8 Citigroup Inc US 149.32 Billion USD 9 HSBC Holdings UK 147.85 Billion USD 10 Mitsubishi UFJ Financial Group(MUFG) Japn 86.29 Billion USD … 20 China Merchants Bank China 68.71 Billion USD SOURCE ： http://www.relbanks.com/worlds-top-banks/market-cap 17

Extra Benefits for Chinese Lessors  Chinese Tax Structure  Increasing Demand from Homeland Country 18

Contents  Huge Demand of China Aviation Industry  The Growing of Chinese Lessor  Who is China Merchants Bank Leasing Strictly Confidential 19

China Merchants Bank - Overview • China Merchants Bank ( “ CMB ” ) was established in 1987 in Shenzhen and listed in Shanghai Stock Exchange and in the Stock Exchange of Hong Kong. With over 28 years’ development, CMB has become the sixth largest bank in China; • CMB ranks 235 th in the 2015 Fortune 500 marks, with USD 1 trillion asset , over 950 sub-branches and about 70,000 employees as of June 2015; • Two Hong Kong subsidiaries – Wing Lung Bank Limited & CMB International Capital Corporation Limited; • Branches and representative offices in Hong Kong, Taiwan, New York, Singapore, London, Luxembourg and Sydney. Well Recognized China's Leading Financial Institution with a First Class Retail Franchise 2011-2014 Best Private Bank in China 2013 Best SME Cash Management Bank in China 2014 Best Joint-stock Retail Bank in China (the 10 th time) 2014 Best Customer Relations Management 2012 Best Domestic Custody Specialist – China (For the 4th 2014 Best Mobile Banking Product in China Consecutive Year) 2014 Best Investment Product Portfolio 2014 Commendation Award for SME Business in China 2014 Best Ultra-high end Customer Service 2013 Best Private Bank in China (For the 4th Consecutive 2014 Best Innovation Bank for Trade Finance Products 2014 Best Private Bank in China Year) 2013 The World’s Best Call Center 2013 Best Cash Management Bank in 2012 Best Export Factoring Provider, the first Chinese 2013 Ranked one of the top 4 globally China (For the 8th Consecutive Year) member enlisted 20

China Merchants Bank Leasing Overview  CMBL was established in 2008, as one of the first five financial leasing companies approved by the State Council.  Capital: 2 billion USD , wholly owned by China Merchants Bank, as the only leasing arm of CMB.  Total assets: More than 16 billion USD , focusing on Aviation/Shipping/Large equipment/Vendor Leasing.  Various financing sources, with credit facilities of more than 32 billion USD from over 60 banks . 21

Our Services We have team with industry long time experiences of lessors, airlines, banks and MRO, to provide services:  Opearating Leasing  Sale and lease back  Financial Leasing  Portfolio purchasing and selling  Asset management 22