M&A Analysis and Research Report on E-Payment Industry of China in 2008
Abstract
2. The driving forces behind M&A of e-payment industry in China

As the take-over of Tom towards eBay was hammered out in China , M&A in e-payment sector is drawing a great attention from public, which deserves us chewing on.

Shining example of M&A in e-payment sector

Time

Both parties involved in M&A

Content of M&A

From the implementation of Guideline for E-payment I (Hereafter called Guideline) laid out by the Bank if China on Oct. 26, 2005, the majority of e-payment companies were eager to see the follow-up measures taken by the Bank of China. The much-awaited-licensing procedure was finally come hinting at a new around of reshuffle.

There are more than 50 companies engaging in e-payment that are poised to handle the pinch situation brought about by licensing. The insiders pointed out that the Bank of China will take the duty on its hand for licensing procedure by the end of 2006. The first batch is set to dozens, and the path ahead proves murky in that 20% of e-payment companies can survive from that environment.

Before that, the Bank of China was firmly committed to consolidation of e-payment sector. The Method of Organizational Management for Payment and Checking as a preliminary draft was announced by the Bank of China in June 2005, and incorporated non-banking institutions into the collective checking system while set the threshold for companies to step in the market. The minimum registered capital for payment and checking at national level was set to be RMB 50 million and local one is RMB 10 million. This seems frustrating to most companies in the current market.

The Guideline put out by the Bank of China articulated that single transaction should be limited to RMB 1000 and RMB 5000 per day, which drew critics from many payment companies running e-ticket business. However, the committed measures of the Bank of China were abundant clear to all the firms.

At present, it is well known to all that under the draconian measures from the Bank of China, the companies that fail to get the first batch of licensing will face consolidation and take-over. It is not hard to imagine that take-over will become common after the licensing within the e-payment market.

Behind the M&A in e-payment sector as followed:

First, the pressure from licensing capping. The Method of Organizational Management for Payment and Checking subjected to deliberation by the Bank of China rules that the foreign participation into the e-payment firms should be limited. Some foreign companies have stayed looking for Chinese partnership due to their former stock-holding against the rule of the Bank of China. All the points show that the winner will be the strong players in e-payment sector. On one hand, the qualification for foreign participation stepping into e-payment market is obtained from the domestic capital input. On the other, the supplementary role will be achieved between foreign platform and domestic mobile payment.

Second, the ferocious competition within e-payment market. The golden opportunity is given in 2005 for this sector where the company is small in number and enjoys a steady profit. However, the situation becomes too volatile after 2005 that more than 40 third parties mushroomed on the market with same services provided, which creates a hit against handling charges. The Alipay and Tenpay were born with platform of Taobao and Tencent which makes the other e-payment firm left behind.

The profit margin of Potevio and IPS stood at 1% to 2% before 2005. At present, profit margin in the third party was plummeting in half. Such competition will lead to reshuffle to optimize market where the medium-small size firms get boxed out of the market while the large ones strive to monopoly. Centricity in this sector will intensify with inescapable M&A down the road.

2. Tendency analysis in M&A of e-payment sector in China

With M&A in this sector surging ahead in the past two years, consolidation and M&A became well-known to the public. Affected by foreign participation and market competition following licensing procedure, the acquisition among e-payment companies will move into the next stage.

The M&A in e-payment sector in the future can be characterized upon us as followed:

First, foreign venture capital seeking for partners in China . Just as what Management Method has pointed out in its threshold for the firms that the minimum registered capital towards national payment and checking companies is RMB 0.1 billion while regional one is RMB 50 million as local ones at RMB 10 million. This is insurmountable obstacle to many companies which registered capital stood at several million. It's an ideal way to get licence by absorbing foreign capital, and by the same token the foreign ventures can put new firms partnered with Chinese counterparts or through direct acquisition for domestic companies as to meet the rule of stock-holding.

Second, the cooperation between medium-small size firms and relevant companies. It's a good option to tie with giants within the sector or sector-related companies among others, Tom, Sdo, Tencent and Alibaba under the circumstance where no foreign participation is available. They can be categorized into two groups- medium-small size firms that are lack of capital but enjoying reliable platform for e-payment, and big ones that hold vast number of bills either gravitating to stake out the territory blindly or expanding their current market share. M&A become trend for optimizing the market resources.

Chapter 1  Research Overview
Section 1   Background of the research
Section 2   Contents of the research
Section 3   Method over the research
Section 4   Team for the research
Section 5   Conclusion for research


Chapter 2  The status quo of e-payment sector on World Stage
Section 1   The overall structure of e-payment sector worldwide
Section 2   The status quo of e-payment industry worldwide
2.1   The analysis over e-payment industry worldwide between 2007 and 2008
2.2  The analysis of competitive culture among e-payment industry worldwide between 2007 and 2008
2.3   Applicability at present

Section 3   The analysis of market scale in e-payment industry between 2007 and 2010


Chapter 3   The analysis of Current E-Payment Industry in China
Section 1   The industrial structure in e-payment industry of China
Section 2   The status quo of e-payment industry in China
2.1 The analysis over e-payment industry in China between 2007 and 2008
2.2 The analysis of competition within e-payment industry in China between 2007 and 2008
2.3.The status quo of e-payment industry in China
Section 3   Tendency analysis of e-payment industry of China between 2007    and 2010


Chapter  5   The market analysis over E-payment industry of China in detail
Section 1  The scale and status quo of on-line payment
1.	The character & development of on-line payment industry
2.	The scale of on-line payment industry between 2007 and 2008
Section 2   The analysis of scale & status quo of telephone payment
1.	The character & development of telephone payment industry 
2.	The scale of telephone payment industry between 2007 and 2008
Section 3   The analysis of scale & status quo of mobile payment
1. The character & development of mobile payment industry
2. The scale of mobile payment industry between 2007 and 2008

Chapter 6   Analysis of investing policy environment in e-payment industry of P.R.C.
Section 1  Impact towards e-payment industry from macro-economic policy
Section 2   Impact towards e-payment industry from industrial policy

Chapter 7   Factor-oriented analyses over impact on development of e-payment industry
Section 1  Risk analysis on development of e-payment industry of China
1. Supervisory policy
2. Internet security
3. Transaction habit
Section  2   Potential problem in e-payment industry of China

Chapter 8 The status quo and M&A trend analysis for e-payment industry in major provinces of China
Section 1  Beijing
1.  The total transaction of on-line payment between 2007 and 2010
2.  Analysis of characters over industrial development and structure in regional 
on-line payment industry
3. Regional competition and major players of on-line payment industry in localities
4. M&A tendency and feasibility analysis in regional ship building industry
Section 2  Shanghai
1.  The total transaction of on-line payment between 2007 and 2010  
2.  Analysis of characters over industrial development and structure in regional 
on-line payment industry
3. Regional competition and major players of on-line payment industry in localities
4. M&A tendency and feasibility analysis in regional ship building industry
Section 3  Guangdong
1.  The total transaction of on-line payment between 2007 and 2010
2.  Analysis of characters over industrial development and structure in regional
 on-line payment industry
3. Regional competition and major players of on-line payment industry in localities
4. M&A tendency and feasibility analysis in regional ship building industry
Section 4  Jiangsu
1.  The total transaction of on-line payment between 2007 and 2010
2.  Analysis of characters over industrial development and structure in regional
 on-line payment industry
3. Regional competition and major players of on-line payment industry in localities
4. M&A tendency and feasibility analysis in regional ship building industry
Section 5  Zhejiang 
1.  The total transaction of on-line payment between 2007 and 2010
2.  Analysis of characters over industrial development and structure in regional
 on-line payment industry
3. Regional competition and major players of on-line payment industry in localities
4. M&A tendency and feasibility analysis in regional ship building industry
Section 6  Sichuan
1.  The total transaction of on-line payment between 2007 and 2010
2.  Analysis of characters over industrial development and structure in regional 
on-line payment industry
3. Regional competition and major players of on-line payment industry in localities
4. M&A tendency and feasibility analysis in regional ship building industry
Section 7  Chongqing
1.  The total transaction of on-line payment between 2007 and 2010
2.  Analysis of characters over industrial development and structure in regional 
on-line payment industry
3. Regional competition and major players of on-line payment industry in localities
4. M&A tendency and feasibility analysis in regional ship building industry
Section 8  Tianjin
1.  The total transaction of on-line payment between 2007 and 2010
2.  Analysis of characters over industrial development and structure in regional 
on-line payment industry
3. Regional competition and major players of on-line payment industry in localities
4. M&A tendency and feasibility analysis in regional ship building industry

Chapter 9  The status quo of M&A in e-payment industry of China
Section 1  Background analysis in M&A of China¨s on-line payment industry
Section 2  Analysis of status quo in M&A in China¨s on-line payment industry
Section 3  Case analysis in M&A in China¨s on-line payment industry
Section 4  Tendency analysis in M&A in China¨s on-line payment industry

Chapter 10  Potential blocks in China¨s ship building industry
Section 1   From policy perspective
Section 2   From capital side
Section 3   Engineering hurdles

Chapter 11  Case analysis in M&A among foreign counterparts
Section 1   eBay buying Skype
1.  Background for M&A and core values
2.  Solution analysis for M&A procedures
3.  Developmental strategy for post M&A stage
Section 2   PayPal buying VeriSign
1.  Background for M&A and core values
2.  Solution analysis for M&A procedures
3.  Developmental strategy for post M&A stage

  Chapter 14   Trend analysis of M&A by foreign e-payment industry in China 
Section 1  Industry prospect in e-payment industry home and abroad
Character in investment
Investment targets
Market performance
Products mix in investment
Investment tendency
Section 2   eBay
1.  The status quo of eBay¨s investment in China 
2.  Core competitiveness of eBay
3.  M&A tendency and feasibility analysis of eBay
Section 3  BilltoBill
1.  The status quo of BilltoBill¨s investment in China	
2.  Core competitiveness of BilltoBil
3.  M&A tendency and feasibility analysis of BilltoBill
Section 4  Visa
1.  The status quo of Visa¨s investment in China
2.  Core competitiveness of Visa
3.  M&A tendency and feasibility analysis of Visa
Section 5  Yahoo
1.  The status quo of Yahoo¨s investment in China
2.  Core competitiveness of Yahoo
3.  M&A tendency and feasibility analysis of Yahoo
Section 6  PayPal
	1.  The status quo of PayPal¨s investment in China
2.  Core competitiveness of PayPal
3.  M&A tendency and feasibility analysis of PayPal
Section 5  Payease
1.  The status quo of Payease¨s investment in China
2.  Core competitiveness of Payease
3.  M&A tendency and feasibility analysis of Payease

Chapter 15  Case study in M&A in domestic e-payment industry
Section 1  Tom buying eBay¨s business in China
1.  Background for M&A and core values
2.  Solution analysis for M&A procedures
3.  Developmental strategy for post M&A stage
Section 1  Yahoo buying Alibaba
1.  Background for M&A and core values
2.  Solution analysis for M&A procedures
3.  Developmental strategy for post M&A stage
Section 1  PayEase buying Payeasy
1.  Background for M&A and core values
2.  Solution analysis for M&A procedures
3.  Developmental strategy for post M&A stage
Section 4  YeePay buying Xibu Payment
1.  Background for M&A and core values
2.  Solution analysis for M&A procedures
3.  Developmental strategy for post M&A stage
Section 5  Easylink consolidating with ChinaPay
1.  Background for M&A and core values
2.  Solution analysis for M&A procedures
3.  Developmental strategy for post M&A stage
Section 6  eBay buying Yiqu
1.  Background for M&A and core values
2.  Solution analysis for M&A procedures
3.  Developmental strategy for post M&A stage

Chapter 16   Analysis of M&A and core competitiveness in e-payment industry of China
Section 1  Alipay (Alibaba)
1. The analysis of performance
2. The analysis of portfolios
3. Analysis of its core competitiveness
4. Analysis of long-term strategy
5. Analysis of M&A trend and actionability
Section 2  Paypal
1. The analysis of performance
2. The analysis of portfolios
3. Analysis of its core competitiveness
4. Analysis of long-term strategy
5. Analysis of M&A trend and actionability
Section 3  Chinamobile & China UnionPay
1. The analysis of performance
2. The analysis of portfolios
3. Analysis of its core competitiveness
4. Analysis of long-term strategy
5. Analysis of M&A trend and actionability
Section 4  IPS
1. The analysis of performance
2. The analysis of portfolios
3. Analysis of its core competitiveness
4. Analysis of long-term strategy
5. Analysis of M&A trend and actionability
Section 5  Payeasy
1. The analysis of performance
2. The analysis of portfolios
3. Analysis of its core competitiveness
4. Analysis of long-term strategy
5. Analysis of M&A trend and actionability
Section 6  Tenpay
1. The analysis of performance
2. The analysis of portfolios
3. Analysis of its core competitiveness
4. Analysis of long-term strategy
5. Analysis of M&A trend and actionability
Section 7   Beijing Cloudnet Internet Co.,Ltd
1. The analysis of performance
2. The analysis of portfolios
3. Analysis of its core competitiveness
4. Analysis of long-term strategy
5. Analysis of M&A trend and actionability
Section 8  Chinabank Payment
1. The analysis of performance
2. The analysis of portfolios
3. Analysis of its core competitiveness
4. Analysis of long-term strategy
5. Analysis of M&A trend and actionability
Section 9  Hotline
1. The analysis of performance
2. The analysis of portfolios
3. Analysis of its core competitiveness
4. Analysis of long-term strategy
5. Analysis of M&A trend and actionability
Section 10  PayEase
1. The analysis of performance
2. The analysis of portfolios
3. Analysis of its core competitiveness
4. Analysis of long-term strategy
5. Analysis of M&A trend and actionability

Chapter 17  Analysis of industrial chain and M&A trend in e-payment industry of China
Section 1  Analysis of character over industrial chain in e-payment sector
Section 1  Analysis of industrial chain and possibility in M&A of e-payment sector

Chapter 19  Analysis of industrial chain and possibility in M&A of e-payment industry
Section 1  Analysis of possibility in M&A over large-scale corporations
1. Alibaba
1.1 Analysis on strategic development
1.2 Analysis of bottleneck over corporation development
1.3 Analysis of M&A possibility
2. Tencent
2.1 Analysis on strategic development
2.2 Analysis of bottleneck over corporation development
2.3 Analysis of M&A possibility
3. Tom
3.1 Analysis on strategic development
3.2 Analysis of bottleneck over corporation development
3.3 Analysis of M&A possibility
4. Sdo
4.1 Analysis on strategic development
4.2 Analysis of bottleneck over corporation development
4.3 Analysis of M&A possibility
Section 2  Analysis of M&A possibility in medium-small size corporation
1. YeePay
1.1 Analysis of M&A feasibility
1.2 Value analysis about M&A
2. Hotline
2.1 Analysis of M&A feasibility
2.2 Value analysis about M&A
3. Chinabank Payment
3.1 Analysis of M&A feasibility
3.2 Value analysis about M&A
4. IPS
4.1 Analysis of M&A feasibility
4.2 Value analysis about M&A
5.1 Analysis of M&A feasibility
5.2 Value analysis about M&A
6. Beijing Cloudnet Internet Co.,Ltd
6.1 Analysis of M&A feasibility
6.2 Value analysis about M&A

Chapter 20  Risk analysis over M&A in e-payment industry
Section 1   Risk analysis over industrial policy 
Section 2   Risk analysis over supervisory mechanism
Section 3   Financial risks analysis  
Section 4   Risk analysis over technological security
Chapter 21  The recommendation for M&A in e-payment industry of China

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