1. Financial Data Provider of Chinese State-Owned Enterprises
Hong Kong, 2014
Mont Royal Capital, Inc.
Financial Data Provider of Chinese State-Owned Enterprises

2. Mission Statement Business Model
Mont Royal Capital (“the Company”) aims to reduce information asymmetry between the Chinese state owned enterprises (“the SOE”) and the private economy. The Company strives to produce financial data adjustments for our clients through analytic methods in hopes to eliminate market friction. The Company develops digital solutions to streamline data supply chain of authenticated financial filings for clients to assess investment opportunities within the SOE market domain.
Business Model
Cultivate and extend relationships with the state owned enterprises, public exchange, and regulators. Gather legal insider information from government and government-related agencies. Collect tax reports, utility usage, and other logistical data of interest. Employ modern analytical methods to improve financial data quality.
Streamline data input and output through centralized big data cloud technology
Implement statistical algorithms to capture characteristics and patterns of data fabrication
Provide authenticated filings, insider data, economic sentiments, and liquidity pool assessments
Develop real-time desktop terminal application for private and institutional investors

3. Credit Banking System – the Paternalistic Commander
National Development and Reform Commission (NDARC)
State agency to lead economic growth and reforms
Directly report to the National People’s Congress
Juristic overseer of the state owned enterprises (SOE)
Influence the Central Bank thus commercial banks
Receive SOE performance evaluations
Big 4 Banks
Endorse risk free capital credits to the SOEs
Originate for-profit loans to private economy
Execute monetary policies from the Central Bank
State Owned Enterprises
For-profit state owned economy participants
Political consequences for bad performances
Unlimited free liquidity access in theory
SOE Economy Opaque to the Private Economy
NDARC
Instruct
Loan
Report
Payment
Banks
Private
Economy
Endorse
Payment
State Owned Enterprise

4. Weak Legal Institutions – the Premature Market
Unreliable Financial Data
Accounting Manipulations
Discreditable Reports
High Costs of Auditing
Unreasonable Regulations
State Owned Enterprises
Lack of Incentive to produce quality financial data to the public
Soviet Commander-styled Board of Trustee from communist party senior political elites
Principle-agent conflict of interest
Low Financial Data Integrity from the SOEs
ROE of Loss Making Firms (2014)
Source: Wind Information

5. SOE Window Dressing Solutions
Related Party Transactions (RPT)
Internalized cash investment and capital gains
Converting receivables to cash equivalents via Bank’s Acceptance Bill
Outsourcing, capital rentals, and Merger & Acquisition
Methodology Highlights
Data from insider information and Related Party Transactions (RPT)
Data published by related SOE companies and other industrial sectors
Parcels delivered by logistic companies
Data based on activities within the publically listed corporations
Data collected by government or government-related agencies
Local railway transportation and logistical data
Healthcare expenses
Tax Reports
Electricity expenses
Water expenses

6. Budgeting Startup Assets 3-Year Cash Flows $213K Start-up Investment
$100K Bank Loans
$53K Investors Equity
3-Year Cash Flows
Positive net cash flow in Year 3

7. Implementation Road Map

8. General Partners Advisory Committe X. Edward Cai
JP Morgan, UC Berkeley Statistics
Shuo. L. Liu
McGill University Biomedical Sciences
Advisory Committe
G. Stahl Former Secretary General of E.U. Committee of the Regions ( )
B. Holmstrom Professor, Nobel Laureate in Economics, MIT
G. Mankiw Former Chair of Federal Committee of Economy
P. Pavilina President, Hamersley Partners, LLP
X. F. Tu CEO Jointown Pharmaceuticals Co. Ltd (SSE )
Y. H. Cai Director, CTO, Cofounder. Routon Electronics Co. Ltd (SSE )
Q. Z. Hu Director of Equity Research, Changjiang Securities
Z. Z. Liu VP Fixed Income, JP Morgan
X. Wu PhD, MSc Statistics, Research Fellow, Harvard University
Y. Huang Ministry Director, Ministry of Health, PRC 8

9. Appendix 1 Financial Analysis
Year
Sales
COGS
Net Profit
2017
$1,500
$5,000
($3,500)
2018
$15,000
$10,000
2019
$150,000
$50,000
$100,000

10. Appendix 2 Simulation Early Results
3214 Time Sensitive Financial Series From SSE and SZSE
35245 Signals Generated
62.49% Successful Forecasts
% Significance Level
Robust in Each Sub-period of 6 Months, Regardless of Bull or Bear Market Performance
Blue: Portfolio ($970K AUM)
Green: SPX
Purple: EFA
Orange: VT
Green line: Number of losing forecasts for the given month
Red line: Number of winning forecasts for the given month