Corporate Governance, Listing, M & A

Goodbaby Company is one of durable juvenile product companies in China,

which has achieved both national and global competitive advantages of growth
opportunities and the largest market shares. Since the durable juvenile product
industry is highly competitive and fragmented and is different from region to
region, country to country; therefore, good corporate governance for Goodbaby
is necessary. Based on Goodbabys Annual Report and disclosure information,
Goodbaby is a public company listing in Hong Kong SAR, China. They have a
clear structure and separated component of corporate governance to implement
business operation in China and oversea markets. Their Board is comitted to
attain high corporate governance standards that are essential in providing a
framework for the Group to guarantee shareholders interests and set out its
business strategies and policies as well as to strengthen corporate value and
accountability. Goodbaby has an experienced, innovation and professional
management team, its combined culture of entrepreneurship and professional
execution capability, and the diverse background, innovative thinking and
extensive experience. Further more, Goodbaby hired employees, especially
employees of senior level, from all over world. Such these good corporate
governance of parent company in China set the foundation to explore oversea
markets.
After gaining enough financial capital and national competitive advantages,
Goodbaby is planning for listing and global expansion. However, they are not
required to obtain Chinese governmental approval or regulatory authorities in
respect of the Listing and the Global Offering. Then they shifted to Hong Kong
for listing. For listing outside of China, the first issue Goodbaby needed to
consider is different rules or legislations in different social patterns and market
shapes; however, due to good separated duties of corporate governance,
Goodbaby has specific management team to solve these problems.
Nevertheless, Goodbaby is an Asian-based company and there existed talent
and experience gap in between China (including Hong Kong) and US. Unless
their managers really have got the experience or have seen how other people
operating their company, persuading and training their staffs to change the
ways of thinking are extremely difficult to accomplish. The one major issue is
the internal audit and its function to a listed company plays a critical role in
providing objective assurance and consulting services, designed to add value to
and improve the organizations operations. For a listing company or overseas
branches, internal control and supervision of society are vital. Different
countries have different institutions and standards to response and specific
management teams should be setup while Goodbaby in China and in US. For
example, processing standardization, interacting reporting mechanism,
exception reporting and Goodbaby should work out a set of infrastructures that
suit the needs in US branches.
M & A is complicated and required a due diligent management team with
definite vision, determination, developed and comprehensive planning that
learning from customers retention, organization structure and operation policies
to achieve the collaborative effect and cultural reconciliation. Goodbaby have
implemented the BOOM strategy and implement their proactive pull marketing
strategy in China market while three-pronged approach (blue-chip business,

direct to retailer business and acquisitions) to achieved solid success in US

branches. Overall, Goodbaby operates under a One-dragon ( ) vertically
integrated business model in all branches. Moreover, through the acquisitions,
their manufacturing capacity has enhanced and geographical coverage has
expaned and now despite the existing manufacturing facilities in China,
Goodbaby have state-of-art manufacturing facilities in US. As to expand their
international business, Goodbaby should improve their organizational structure
and adopt the new structure with recruiting right people in the right post and
dealing with multi-location structure and efficient financial closing issues.