Small Fish, Big Sea – Investing with Caution

During my internship, I have had various opportunities to learn about the Chinese finance and business industries. My first opportunity came during my first assignment, which was to write a company overview, industry overview, and competitive advantage for the ten largest Chinese companies that were publicly traded in America. While working on this assignment, I learned many different aspects of Chinese business. For instance, about half of the companies that I researched were owned and operated by the Chinese government. This came as a shock to me because I am so used to the free-trade, capitalist policies which govern American business. I also learned that many of the companies happened to be extremely high-growth technology companies. This is one large similarity between Chinese business and American business as the five most valuable public companies in America are technology companies. I also had the opportunity to learn about the Chinese financial industry during my research on Noble Family, a wine company we were thinking of investing in. While reading over their PDF, I noticed that they claimed they were going public on the Three Board Market. After doing some research, I found that the Three Board Market is a stock exchange for small to medium sized startup companies.

Although China Capital has very solid strengths, they also have some weaknesses that they have to overcome if they want to reach their full potential. China Capital’s main strength is the talent they have amongst their executives. The executive board is flooded with people who have over 10 years of experience in finance. Additionally, 80% of the people who work at China Capital have a masters degree or better, and 70% have either studied or worked overseas. One of their main weaknesses is that China Capital is a very young company, and has a small amount of assets under management. This forces them to invest with caution, and limits the total return they could get each year.

Probably the greatest opportunity that China has is its potential to grow. If they make savvy investments while the economy is down, they will have a good amount of money to invest as the economy rises, and could reap huge profits. One large threat that China Capital faces is that, as a small company, larger companies can swoop in and offer more capital to companies China Capital is interested in partnering with. China Capital has to make under-the-radar investments while it is still growing and building its reputation, until it can become a household name in the Chinese finance industry.

I think the future will be very bright for China Capital. As a company, they are growth oriented, and make their investments with an eye for how those investments will help the company grow faster than other uses of their money can. China Capital recently opened the branch in Beijing that I work at, and plans to open a branch in New York City within the next few years. As they begin to expand globally, the sky is truly the limit for them.

This picture is from when the entire office went out to lunch together for the first time.

Jacob food

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