A Rising Player in Aviation Finance

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.

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Contents

Strictly Confidential

Huge Demand of China Aviation Industry

The Growing of Chinese Lessor

Who is China Merchants Bank Leasing

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4.1% 3.9% 1.5%

-2.1%

4.1% 2.8% 2.3% 2.4% 2.5%

12.7% 14.2%

9.6%

9.2%

10.6% 9.5%

7.8% 7.7% 7.3%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

2006 2007 2008 2009 2010 2011 2012 2013 2014

World China

China GDP Growth compared to World

SOURCE：the world bank.

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Aviation Industry Growth in China

37.5%

14.1%

15.9% 15.6%

4.3%

19.7% 16.1%

9.5% 8.9% 10.8% 10.7%

11.4%

7.5% 5.6%

8.8%

1.2% - 1.2%

8.1% 6.3% 4.2% 6.4% 4.5%

-10%

-5%

0 %

5%

10%

15%

20%

25%

30%

35%

40%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

RPK Growth Rate(China) RPK Growth Rate(World)

SOURCE：CAAC and Wind

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Total Passengers (million)


290 319 354 390 440

0

200

400

600

2011 2012 2013 2014 2015

5.6 4.5 3.8 4.4

8.4

-

5.0

10.0

2011 2012 2013 2014 2015

Total Profit (billion USD)

2.42.1

0.9

0.3

0.0

0.5

1.0

1.5

2.0

2.5

3.0Average Flight Times Per Year

US UK JAPAN CHINA


7.6

1.4 1.1

3.9

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

US UK JAPAN CHINA

Total Passengers in 2014

100 Milliom

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Domestic travelers（100 million person）

17.12 19.02 21.03

26.41 29.57

32.62 36.11

0

10

20

30

40

2008 2009 2010 2011 2012 2013 2014

CAGR=13.25%

1 International travelers（100 million person）

0.46 0.48 0.57

0.70 0.83

0.98

1.17

0

1

2008 2009 2010 2011 2012 2013 2014

CAGR=16.83%

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• 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.



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ONE BELT ONE ROAD

Infrastructure Construction

Oil and Gas

SOURCE：Reuters

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Opportunities from One Belt One Road

Opportunities Infrastructure Construction

Culture and Tourism

Oil and Gas

Transportation

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Global Deployment of Chinese Asset

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

100%

2009

20

10

2011

20

12

2013

20

14

2015

Y2

016

Y201

7 Y2

018

Domestic Asset International Asset

SOURCE：Internet

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Contents





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Financial Leasing Company:

Non-banking financial institution regulated by CBRC.

Leasing Company:

Non-banking financial institution regulated by Ministry of Commerce.

Classification of Chinese Lessors

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2007

2010

2011 2013

2012 2014

2015

Chinese Banks are allowed to establish leasing companies. (YJF [2007] 462)

Financial leasing companies are permitted to conduct finance lease business with SPV in FTZ.

VAT Reform More than 600 aircraft traded in Tianjin FTZ

Milestones

Total asset of the leasing industry amounts to 2B USD.

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25 46 107

143

238

308

477

11 23 46 77

116 146

200

0

100

200

300

400

500

600

2008 2009 2010 2011 2012 2013 2014

CAGR=68%

2008-2014 Total Asset of Leasing Industry in China

The Grow Path of Chinese Leasing Industry

Total Asset of Leasing Company Total Asset of Financial Leasing Company

SOURCE：CBRC and Ministry of Commerce

Billion USD

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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

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Top 50 Aircraft Leasing Companies 2014 Company Rank Total fleet value Total fleet

2014 2013 million USD$ AreCap 1 6 33,099 1,305 GECAS 2 1 32,507 1,624 BBAM 3 3 11,060 292

SMBC Aviation Capital

4 4 11,037 386

BOC Aviation 5 5 9,445 246 AWAS 6 7 9,222 313

CIT Aerospace 7 8 9,004 312 Air Lease 8 9 8,806 235

ICBC Leasing 9 13 6,858 168 Aviation Capital

Group 10 10 6,561 272

Avolon Aerospace Lsg 11 11 6,204 140

CDB Leasing Company 12 13 5,252 129

Doric 12 12 4,383 38 Standard Chartered

Avn Fln 14 16 4,263 105

Aircastle Advisor 15 15 4,083 136 Jackson Square

Aviation 16 18 3,671 93

FLY Leasing 17 24 3,003 127 MC Aviation

Partners 18 17 2,842 90

DAE Capital 19 20 2,778 56 Macquarie AirFinance 20 19 2,635 132

VEB-Leasing JSC 21 29 2,482 70 ORIX Aviation 22 21 2,482 123

Hong Kong Avn Capital 23 22 2,271 73

BoCom Leasing 24 30 2,101 56 Boeing Leasing 25 25 1,982 227

Aircraft Leasing&Mgmt 26 38 1,972 62

Nordic Aviation Capital 27 27 1,968 174

Intrepid Avn Group 28 33 1,953 21 China Aircraft Lsg 29 32 1,772 47

Novus Aviation 30 37 1,673 20 Amentum Capital 31 26 1,599 44

ALAFCO 32 28 1556 50 Changliang Lsg. Co 33 31 1,490 64

Guggenheim Avn Partners 34 23 1,331 43

AVIC International Lsg 35 34 1,281 71

Jackson Square AvnIreland 36 40 1,235 25

CMB Financial Lsg 37 - 1,161 25

Comsys Aviation Lsg 38 58 1,071 20

Showa Leasing 39 46 871 32 Jetscape 40 36 819 43

Apollo Aviation Grp 41 47 795 55

Dragon Aviation Lsg 42 43 779 23

Banc of America Lsg Ireland

43 - 777 26

Transportation Partners 44 75 732 24

SkyWorks Leasing 45 35 703 80 Century Tokyo Lsg 46 - 673 30 Titan Aviation Lsg 47 39 666 9

VTB-Leasing 48 53 652 46 Cargo Aircraft Management 49 41 620 54

Aldus Aviation 50 51 613 29 Total 216,788 2,865 SOURCE：Flightglobal Ascend Fleets and Ascend Values database

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Extra Benefits for Chinese Lessors

Strong parent companies

SOURCE：http://www.relbanks.com/worlds-top-banks/market-cap

Rank Bank Country Market Cap(Sep.30.2015)

1 Wells Fargo & Co US 263.60 Billion USD

2 Industrial & Commercial Bank of China(ICBC) China 233.25 Billion USD

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

…

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Chinese Tax Structure

Increasing Demand from Homeland Country

Extra Benefits for Chinese Lessors

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Contents





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• 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 235th 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

2014 Best Customer Relations Management

2014 Best Investment Product Portfolio

2014 Best Ultra-high end Customer Service

2013 Best SME Cash Management Bank in China

2012 Best Domestic Custody Specialist – China (For the 4th Consecutive Year)

2013 Best Private Bank in China (For the 4th Consecutive Year) 2014 Best Innovation Bank for Trade Finance Products

2014 Best Private Bank in China

2013 The World’s Best Call Center

2013 Ranked one of the top 4 globally 2013 Best Cash Management Bank in China (For the 8th Consecutive Year)

2012 Best Export Factoring Provider, the first Chinese member enlisted

2014 Best Joint-stock Retail Bank in China (the 10th time)

2014 Best Mobile Banking Product in China

2014 Commendation Award for SME Business in China

China Merchants Bank - Overview

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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.

China Merchants Bank Leasing Overview

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Our Services

Opearating Leasing

Sale and lease back

Financial Leasing

Portfolio purchasing and selling

Asset management

We have team with industry long time experiences of lessors, airlines, banks and MRO, to provide services:

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Average fleet age of 2 years

Aviation Business

• Started the aviation business in June 2009 • Start to set up entities in Bonded Area in

2010, have plat forms in Tianjin, Shanghai, Xiamen

• Set up entities in Ireland and Hong Kong in 2011

• Awarded “2010 Deal of the year” by Euromoney

• Awarded “2014 Airfinance Innovation Award” by China Airfinance Awards

• Awarded “2015 Airfinance Development Award” by China Airfinance Awards

Milestones

Our Portofolio

A320

B737-800

B777-300ER

A330-300

B787

others

Fleet/Backlog in total : 95

Total Fleet: 55 Total Backlog: 40

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Domestic and Global Business

2016/01

Tianjin Shanghai

Hong Kong

Ireland

Xiamen

South African Airways Platforms

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Our Relationship Banks

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This presentation is strictly confidential and prepared exclusively for the benefit and internal use of our client to whom it is directly addressed and delivered and not for distribution or publication. The information may not be reproduced without the consent of CMBL. The information contained herein has been prepared to assist recipients making their own evaluation of the Company and does not purport to be all-inclusive or to contain all of the information a prospective or existing investor may desire. In all cases, interested parties should conduct their own investigation and analysis of the Company and the data set forth in this information. CMBL makes no representation or warranty as to the accuracy or completeness of this information and shall not have any liability for any representations (expressed or implied) regarding information contained in, or for any omissions from, this information or any other written or oral communications transmitted to the recipient in the course of its evaluation of the Company. By accepting a copy of this presentation, the recipient agrees that the presentation and its contents are confidential, that the recipient will hold and treat in the strictest of confidence and will not use any of the information therein for any purpose except to evaluate its potential interest. Forward-looking statements and information — that is, statements related to future, not past, events. There statements may be identified by words such as “expects,” “may,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “forecast” or words of similar meaning. Such statements are based on our current expectations and certain assumptions, and are, therefore, subject to certain risks and uncertainties. A variety of factors, many of which are beyond CMBL control, affect our operations, performance, business strategy and results and could cause the actual results, performance or achievements of CMBL to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements.

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A Rising Player in Aviation Finance