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Greater China Appraisal and RuLin Appraisal Announce Strategic Collaboration
November 2018

Greater China Appraisal Limited is delighted to announce its strategic collaboration with RuLin Appraisal Firm for enhancing valuation capabilities by leveraging each other's resources.

Greater China Appraisal is a leading financial services provider with headquarters in Hong Kong offering business and asset valuation, financial risk management as well as business consulting services. Greater China Appraisal is well recognised and qualified by professional bodies. It is a corporate member of The International Valuation Standards Council, a regulated firm under The Royal Institution of Chartered Surveyors and a Valuation Institute for Engagement by State-owned Enterprises under State-owned Assets Supervision and Administration Commission of the State Council.

RuLin Appraisal is one of the very first batch of mining right valuation firms established in China. It offers mining right valuation, asset valuation, land valuation, investment consulting in mining companies and mining rights software development and other services. Its business covers 25 provinces in China and overseas regions.

With this strategic collaboration, Greater China Appraisal will be able to provide more diversified valuation services to clients.

 
Re: Wrongful Acts of Our Former Employees

We would like to inform our esteemed clients that few former employees of our Business Valuation & Transaction Advisory team (hereinafter referred to as "Former Employees"), who used to communicate with our esteemed clients, have tendered their resignations during the period from April to May 2018.

Recently, it has come to our knowledge that some of our esteemed clients were approached by the Former Employees. Coincidentally, there are malicious rumors that we are now in lack of experienced business valuers to handle the recurring valuation projects.

In this circumstance, we verily believe that the Former Employees have been wrongly soliciting our clients using our confidential information in order to develop and prosper their own business and that, as advised by our legal advisor, the wrongful solicitation of our clients may constitute an act which is against the law of confidence in Hong Kong. We are currently seeking further legal advice from our legal advisor and may initiate legal proceedings, including but not limited to applying for an injunction, against the Former Employees so as to protect our legitimate interest.

We would like to clarify that we have sufficient human resources and capabilities to maintain our high quality of business valuation services for recurring and new projects. Further, the average number of years in valuation experience of existing Business Valuation & Transaction Advisory team is even more than that of before. Our high caliber professionals, the profiles of whom are set out as below, are well-equipped with relevant expertise and are ready to serve you better.

Victor Siu
CFA, AICPA
Director

  • 12 years of experience in the finance sector
  • first joined GCA in 2008 and currently is the Head of Business Valuation and Transaction Advisory team
  • completed numerous public and private fundraising transactions, including IPOs, M&As, convertible bonds and etc., with a focus on technology, resources and renewable energy sectors

Jack Leung
CFA, CVA, FRM, MPhil
Director

  • 15 years of experience in investment and valuation field
  • jointly leads Business Valuation and Transaction Advisory team
  • master of business and intangible asset valuation, with strong track records in Hong Kong, China, Singapore, Malaysia, Indonesia, Japan and the United States

Faye Chan
CPA (Aust.)
Manager

  • 10 years of experience in accounting and finance field
  • valuation expertise covers natural resources, medical, food & beverage, financial services and information technology industries
  • competent at valuation of intangible assets including trademarks, patents, distribution networks and concession rights

Joanne Law
CPA, ICVS
Manager

  • 8 years of experience in business advisory, valuation and audit
  • proficient in business and intangible asset valuation for companies in entertainment, real estate, hotel and tourism industries

Vincy Leung
CPA
Manager

  • 6 years of experience in accounting and finance field
  • experienced in business valuation in financial services, infrastructure, manufacturing and public utility industries
  • skillful in intangible asset valuation including trademarks and patents

Duncan Wong
CFA, MBA, MEng
Manager

  • accomplished at building quantitative model for various derivatives and structured products
  • experienced in economic and equity research and generating market statistics on HKEx activities

Bobby Zhu
Assistant Manager

  • experienced in valuation of business and intangible assets for different industries including agriculture, renewable energy, gaming and mobile apps, public utility and infrastructure

Amy Wang
Assistant Manager

  • well-trained for business valuation for purposes of financial reporting, mergers and acquisitions, financing, tax and litigation supporting

We trust that our esteemed clients will only appoint an honest and faithful valuer. We would like to take this opportunity to express our view that "Integrity" plays an important role in our industry, which must be strenuously upheld.

For instant enquiries regarding our services, please do not hesitate to contact the following staff:

 
Quick Understanding on the Impact under the New Standard
HKFRS 16 Lease

January 2018

HKFRS 16 Lease becomes effective for annual periods beginning on or after 1st January 2019. It requires lessee to recognize 'right-of-use' assets with the corresponding lease liabilities for most of the property leases. This requirement does not apply to leases with lease term within 12 months or for which the underlying asset is of low value. Apart from this, companies which rent offices or lease machineries may be affected by this new financial reporting standard.

Basically, this new requirement puts the 'off-balance sheet' accounting items on the balance sheet of lessee. In financial term, key measures and ratios are affected, such as EBITDA and debt-to-equity ratio, and as a result companies, especially SMEs, may expose to higher financial risk such as breaching financial covenants. An example for fixed payment is illustrated below:

Lease term 10-year lease with an option to extend for 5 years
Lease payment $30,000 per year for the 10-year lease and $35,000 per year during the optional period
Lessee's incremental borrowing rate 5% per annum

Cash outflow for lease Year 1 Year 2 Year 3 Year 4 Year 5
Cash payment for lease $30,000 $30,000 $30,000 $30,000 $30,000
Discount factor at 5% p.a. 1.0000 0.9524 0.9070 0.8638 0.8227
PV of payment for lease $30,000 $28,572 $27,210 $25,914 $24,681
           
  Year 6 Year 7 Year 8 Year 9 Year 10
Cash payment for lease $30,000 $30,000 $30,000 $30,000 $30,000
Discount factor at 5% p.a. 0.7835 0.7462 0.7107 0.6768 0.6446
PV of payment for lease $23,505 $22,386 $21,321 $20,304 $19,338
           
Sum of present value of lease payment $243,231        

In the above example, lessee has cash payment for Year 1 at $30,000 on the contract commencement date (for simple illustration, ignore other related costs) and further recognizes the lease liability at $213,231 and 'right-of-use' asset at $243,231 for the subsequent term. Also, depreciation and lease interest will be charged at $24,323 (straight line depreciation over 10 years lease term) and $10,662 (5% p.a. interest charge for lease liability) respectively at the end of first year.

In addition, in order to lessen the burden of the balance sheet, the tenant may intend to negotiate for a shorter lease term or a higher portion of variable lease payment based on turnover rent before entering into new lease contract. This results in a change of behavior of leasing activities towards the tenants in the commercial market. Entities should start the planning for timely assessment to address the potential challenges for the new standard and seek for professional advice on a variety of leasing structures in favour to the companies.

Issued by: Professional Development and Standards Team

 
The Exchange Strives to Develop Hong Kong as Aircraft Leasing and Financial Hub
December 2017

The Stock Exchange of Hong Kong Limited ("the Exchange") has issued the consultation paper in November 2017 by understanding the practical difficulties to comply with the disclosure requirement under Chapter 14 in respect of the aircraft leasing activities.

To enhance the positioning on aircraft leasing hub in Hong Kong amongst other competitors such as Ireland and Singapore, the Exchange has addressed the exemption for listed companies in complying with the notifiable transaction rules for aircraft leasing activities. The proposed exemption is intended to apply to acquisition, disposals and finance leases of aircraft by listed issuers. Alternative disclosure of the transactions by the way of announcements and in their interim/annual report is allowed.

Greater China Appraisal Limited which is one of the RICS Regulated Firms fully supports the Exchange's action to update the requirements from time to time to meet the market development.

The proposed exemption will encourage the increase of momentum in the aircraft commercial activities in Hong Kong. GCA Professional Services Group's expertise is ready to provide assistance and counsel to different areas.

Detailed information of our aircraft and aviation related services is available at below: http://gca-valuation.com/Publication/gca_service_brochure_Airplane_Valuation.pdf

Detailed information of the consultation paper is available at below: https://www.hkex.com.hk/News/Market-Consultations/2016-to-Present/November-2017-Exemption-for-Aircraft-Leasing-Activities?sc_lang=en

Issued by: Professional Development and Standards Team

 
The New CEIV Credential - A milestone for Valuation Professional
November 2017

The New Certified in Entity and Intangibles Valuation ("CEIV") credential was introduced by three valuation professional organizations i.e. The Royal Institution of Chartered Surveyors ("RICS"), American Society of Appraisers ("ASA") and The American Institute of Certified Public Accountants ("AICPA") in 2017.

It enhances the transparency, quality and consistency of valuation for fair value measurement and helps to unify the valuation profession in the market.

Greater China Appraisal Limited, as one of the RICS Regulated Firms, has always provided a consistent framework for how to perform a professional valuation work and how to document the work done in estimating fair value. We welcome and fully support the Credential which is benefited to the public and is in time with our company's objective to ensure the best quality of valuation.

 
SFC has launched guidance note on valuation in corporate transaction
May 2017

The Securities and Futures Commission ("SFC") has increasingly concerned the responsibility and liability to all directors of listed companies, financial advisors and valuers in ensuring the terms of corporate transactions, including the consideration and the use of valuation, are fair and reasonable.

Greater China Appraisal Limited ("GCA") as one of the major valuation consulting firms in the market, we are delighted to see the launch of guidance note and related documents by the SFC on 15 May 2017. It is no doubt that valuation used in corporate transactions shall protect the interests of the company and its shareholders as a whole.

Our competent professional valuation teams offer recognised quality service by exercising a high level of skill and reasonable care to conduct valuation engagements. GCA being a Corporate Member of International Valuation Standards Council ("IVSC") and as a Regulated Firm by Royal Institution of Chartered Surveyors ("RICS"), we fully support SFC's action to raise valuation practice standards for the benefit of Hong Kong capital market.

Detailed information is available on the SFC website below:
http://www.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/doc?refNo=17PR68

 
Launch of International Valuation Standards (IVS) 2017
January 2017

Greater China Appraisal Limited as one of the major valuation consulting firm in the market, we are delighted to see the launch of International Valuation Standards (IVS) 2017.

Being a Corporate Member of International Valuation Standards Council (IVSC), we fully support IVSC's mission to raise valuation practice standards for the benefit of the global financial market. Our corporate clients share with us the latest version ofs the IVS which brings a greater depth to the standards and provides a greater efficiency to the business environment.

Detailed information is available on the IVSC website below:
https://www.ivsc.org/news/article/ivsc-launches-new-global-standards-for-valuation-profession

 

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