What is due diligence?
- Due Diligence is an important pre-investment investigation process
- It is usually conducted after an investor reaches a preliminary agreement with a target company
What Does Due Diligence Involve?
- Reviewing and analysing the target company's information
- Including on-site investigations and data analysis
- To gain a comprehensive understanding of the company's operations and investment value
What Areas Are Typically Reviewed?
- Company Background：
- Company history
- Corporate records and key documents
- Management Team：
- Background of directors and management personnel
- Management capabilities and experience
- Business and Market Position：
- Business model
- Market prospects and competitive environment
- Risk Assessment：
- Market Risk
- Management Risk
- Technical Risk
- Financial Risk
Purpose of Due Diligence
- To determine whether the target company is worth investing in
- To identify potential risks before making an investment
- To help investors make informed investment decisions
- To achieve potential returns while minimizing risk
Summary
- Due Diligence is a key step before making an investment
- It helps investors understand the true condition of a target company
- And supports better decision-making by reducing investment risks