Contact: Peter Fuhrman, Chairman China First Capital Ltd. Email: ceo@chinafirstcapital.

com

China First Capital, Ltd

Press Release
A Financing Revolution at China's State-Owned Enterprises Private Sector Capital, Including Global Private Equity to Play Larger Role Helping These Companies to Go Global
China First Capital, an international investment bank and advisory firm focused on China, today announces it has received a pioneering mandate from a large Chinese State-Owned Enterprise ("SOE") holding company to manage a process to revitalize and privatize part of the group by bringing in private capital.
Hong Kong, Shenzhen, China, September 12, 2013:

"The investment environment for SOE deals in China is undergoing a significant and exciting change," commented China First Capital chairman and founder Peter Fuhrman. "We are proud to play a leading role in this change, by working with some of China's SOEs to complete restructuring of unquoted subsidiaries and then raise private sector capital to finance their future expansion. We see these SOE investment deals as the next significant opportunity for institutional investors eager to allocate more capital to China." By some estimates, China's SOEs account for over 60% of total Chinese GDP. Yet, up to now, they have only rarely done private placements or spinoffs to access institutional investment, including from private equity firms. But, according to China First Capital's internal research, an increasing number of China's SOEs will face a funding gap in coming years. SOEs, in most cases, have ambitious expansion plans fully supported by the Chinese government. Yet, the SOEs are restricted in their ability to raise large amounts of new bank loans. They are under pressure from Chinese government to maintain or lower their debt-to-equity ratios. "As a result of these new, powerful and dynamic forces at work in the state sector in China," Fuhrman explains, "SOEs will increasingly look at the option of raising equity capital from institutional investors to acquire the funding they need to meet growth targets". The funding gap is largest among SOEs, or their subsidiaries, that have yet to IPO, either in China or abroad. Private equity finance has up to now played a very minor role in financing the growth of Chinese SOEs. This is despite the overall large size of China's PE industry, which has grown explosively over the last ten years to become the second-largest PE business (based on capital raised and deals done) in the world, after the USA. Private equity firms have up to now focused their attention on China's private sector entrepreneurial companies.

For Release 8 a.m. Eastern, September 12, 2013 more

"For private equity and other institutional investors, SOE deals in China will potentially provide an important mechanism to diversify their portfolios and lower their overall risk," China First Capital's Fuhrman points out. "With IPOs currently blocked in China, and exit opportunities for private companies more limited, SOEs provide a rich potential source of new investment targets. SOEs are generally much larger than private sector companies and are also generally much more in compliance with China's tax and regulatory structure. So, some of the biggest risks to PE investing in China are mitigated." China First Capital's current SOE mandates include a private equity financing round of USD$80mn -$100mn for one of China's largest specialist packaging companies. It is a subsidiary of one of China's largest SOE holding companies. The packaging company has never raised outside capital, and this year will have revenues of approximately USD$100mn and profits of over $10mn. The company seeks to access institutional capital to help it build new factories to meet burgeoning orders and also to help it build its market position in Europe and the USA. "SOEs often operate in an insular environment," says Fuhrman, "so one of the benefits of raising private equity capital is that it can be a huge help in getting the SOE to become both more efficient and more fully globalized. China's economic growth remains the envy of much of the world. To sustain that growth in coming years, China's SOEs must continue to grow strongly and also more fully globalize. Many SOEs can't get their on their own. That's where this opportunity for private sector capital will be largest."

For more information, contact:

Peter Fuhrman, Chairman, China First Capital, Ltd. Website: www.chinafirstcapital.com China Private Equity Blog: www.chinafirstcapital.com/blog Email: ceo@chinafirstcapital.com

About China First Capital:

China First Capital is a leading China-focused specialist international investment bank and advisory firm for private capital markets and M&A transactions. Founded in 2008, China First Capital maintains a disciplined focus on -- and strives for a leadership position in -- four distinct business areas: I. II. III. IV. Private placement and equity financing for China's high growth private entrepreneur-led companies; Private equity Secondaries, buy-side & sell-side representation for acquisitions and early liquidity events; Strategic M&A transactions, domestic and cross-border; Restructuring and growth capital financing and advisory for China's State Owned Enterprises.

Our transaction volume over preceding twelve months exceeds USD $250 million. China First Capital's geographical reach and client mandates are across all regions of China, with exceptional proprietary deal flow. We have significant domain expertise in most major industries in China's private and public sector, structuring transactions for a diversified group of companies and financial sponsors to help them grow and globalize. We execute transactions across the capital spectrum to minimize dilution and optimize our clients' capital structure and financial returns. We are a knowledge-driven company, committed to the long-term economic prosperity of Chinese business and society, backed by proprietary research (in both Chinese and English), that is unmatched by other boutique investment banks or advisory firms active in China.