IPO purchase proposal:

Hanhua Financial Holdings is China's leading provider of comprehensive credit guarantee and financing solutions for small and medium-sized enterprises in China. China's microfinance industry grew at a compound rate of 188.1 per cent between 2008 and 2012, but the total loan balance of the microfinance industry was 592.1 billion yuan, a paltry 0.9 per cent relative to total renminbi loans, according to the people's Bank of China. The growth rate of the microfinance industry is expected to remain at a high level of more than 20 per cent in the future and is expected to reach 2.1388 trillion yuan in 2017, a fourfold increase from the amount at the end of 2012. The financing guarantee industry has played an active role in meeting the financing needs of small and medium-sized enterprises, with the balance of financing guaranteed loans for small and medium-sized enterprises accounting for more than 70% of the balance of financing guaranteed loans. the proportion rose from 73.1% in 2008 to 78.4% in 2012.

Paid-in capital and region are important factors to measure the strength of financing guarantee companies. As of May 31, 2013, Hanhua Financial Holdings ranked fourth in terms of registered capital. In terms of the distribution of branches of the financing guarantee business, Hanhua Financial Holdings ranked first, covering 20 provinces. In the current macroeconomic and policy environment, resources and advantages are likely to be concentrated in a small number of large and medium-sized guarantee enterprises. The paid-in capital of micro-loan companies has a direct impact on their lending capacity, so it constitutes an important index to evaluate micro-loan enterprises. In terms of registered capital, Hanhua Financial Holdings ranks third among Chinese microfinance companies. Due to geographical restrictions from policy and supervision, the coverage area is also an important factor in the evaluation, and Ji Hanhua Financial Holdings ranks second according to the area covered by its business outlets. Hanhua Financial has successfully established branches in many places, thus enjoying significant competitive advantages in business scale, customer base diversification, brand awareness and product distribution.

However, we take into account the fierce competition in the company's industry, the regulatory environment is greatly affected by policy factors, and the forward price-to-earnings ratio of this share price is 30-37.89 times per share, which is at a high level of industry valuation, and the company's future development prospects are uncertain, so we suggest that we apply carefully.