Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<ul>
<li>
Another Weak Number: Waterdrop (WDH.US) reported a third set of losses since its IPO, coming in at a negative CNY 477 mn  - improving CNY 227 mn (32.5%) QOQ; </li>
<li>
High Cumulative Losses: Cumulative losses since its IPO are over CNY 1.5 bn, and represent about 57% of IPO funds raised. Challenges come from weaker revenues and excessive costs; and    </li>
<li>
Notice” To Online Insurers: The CBIRC's roll out of the internet insurance revision plan aims to scrutinize mainland China’s insurance technology platforms. </li>
</ul>



Another Weak Number: Waterdrop (WDH.US) reported a third set of losses since its IPO, coming in at a negative CNY 477 mn  - improving CNY 227 mn (32.5%) QOQ; 

High Cumulative Losses: Cumulative losses since its IPO are over CNY 1.5 bn, and represent about 57% of IPO funds raised. Challenges come from weaker revenues and excessive costs; and    

Notice” To Online Insurers: The CBIRC's roll out of the internet insurance revision plan aims to scrutinize mainland China’s insurance technology platforms. 


<ul>
<li>
Long Arm of the Law: Mainland China’s Ministry of Industry and Information Technology (“MIIT”) has ordered a temporary suspension of updates to apps from November 24, 2021;</li>
<li>
Follow-Up To Other Violations: The temporary suspension come as Tencent Holdings (700.HK) [“Tencent”] was found violating user data security laws on nine apps under the Information Protection Law; and</li>
<li>
Financial Holdco May Be a Forced Issue Too: The long arm of the CBIRC will grab Tencent. The more its relies on Fintech, the more alarming financial regulatory concerns.  </li>
</ul>



Long Arm of the Law: Mainland China’s Ministry of Industry and Information Technology (“MIIT”) has ordered a temporary suspension of updates to apps from November 24, 2021;

Follow-Up To Other Violations: The temporary suspension come as Tencent Holdings (700.HK) [“Tencent”] was found violating user data security laws on nine apps under the Information Protection Law; and

Financial Holdco May Be a Forced Issue Too: The long arm of the CBIRC will grab Tencent. The more its relies on Fintech, the more alarming financial regulatory concerns.  


<ul>
<li>
Stadium Levy:Likely Guangzhou City Construction Investment Group has seized the halted China Evergrande Group’s (3333.HK) [Evergrande] stadium project in order to dispose of it;</li>
<li>
Stake Sale:In order to stave off default, Evergrande’s Chairman reduced his family’s stake, raising the equivalent USD 344 mn; and</li>
<li>
Guarantee and Grace Period:Investors are threatening to re-invoke Evergrande’s Jumbo Fortune bond guarantee, and we await the expiry of another 30-day grace period expiry on December 6, 2021.</li>
</ul>



Stadium Levy:Likely Guangzhou City Construction Investment Group has seized the halted China Evergrande Group’s (3333.HK) [Evergrande] stadium project in order to dispose of it;

Stake Sale:In order to stave off default, Evergrande’s Chairman reduced his family’s stake, raising the equivalent USD 344 mn; and

Guarantee and Grace Period:Investors are threatening to re-invoke Evergrande’s Jumbo Fortune bond guarantee, and we await the expiry of another 30-day grace period expiry on December 6, 2021.


China Evergrande Group – Levies and Liquidations

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<li>
A50 Challenges:Hong Kong Exchange &amp; Clearing (388.HK) [HKEx] launched the MSCI China A50 Connect (HK A50). This new product competes with 20% of Singapore Exchange’s (SGX.SP) [SGX] PBT; </li>
<li>
Completely Distracted: On top of weaker equity volumes/fees and the HK A50 launch, SGX has made numerous moves which are more of a distraction than they're worth; and </li>
<li>
Time For Massive Strategic Move: SGX must consider significant strategic alternatives if it is to avoid being hollowed out over the longer-term.</li>
</ul>



A50 Challenges:Hong Kong Exchange &amp; Clearing (388.HK) [HKEx] launched the MSCI China A50 Connect (HK A50). This new product competes with 20% of Singapore Exchange’s (SGX.SP) [SGX] PBT; 

Completely Distracted: On top of weaker equity volumes/fees and the HK A50 launch, SGX has made numerous moves which are more of a distraction than they're worth; and 

Time For Massive Strategic Move: SGX must consider significant strategic alternatives if it is to avoid being hollowed out over the longer-term.


<ul>
<li>
C’mon Guys, Where Have You Been?: S&amp;P issued a scathing report suggesting that China Evergrande Group (3333.HK) [Evergrande] “will likely default because the company has lost its main business”;</li>
<li>
Other Pearls:S&amp;P also believes that “Evergrande’s massive debt will catch up with it”; and    </li>
<li>
Ratings Agencies Are More Than Culpable: Wouldn’t you know it, the sleepy, fee hungry ratings agencies are finally starting work on Evergrande after the market embarrasses them once again.</li>
</ul>



C’mon Guys, Where Have You Been?: S&amp;P issued a scathing report suggesting that China Evergrande Group (3333.HK) [Evergrande] “will likely default because the company has lost its main business”;

Other Pearls:S&amp;P also believes that “Evergrande’s massive debt will catch up with it”; and    

Ratings Agencies Are More Than Culpable: Wouldn’t you know it, the sleepy, fee hungry ratings agencies are finally starting work on Evergrande after the market embarrasses them once again.


China

iShares FTSE A50 China Index ETF is an exchanged-traded fund established in Hong Kong. The investment objective of the iShares FTSE A50 China Index ETF is to provide investment results that, before fees and expenses, closely correspond to the performance of A50 Index.

iShares FTSE/Xinhua A50 China (2823 HK)

Waterdrop – Still Bleeding

WATERDROP: Waterdrop reported losses of CNY 477 mn - improving CNY 227 mn or 32.5% linked quarter and bringing cumulative losses since its IPO to...

Thomas J. Monaco

Tencent Holdings – Regulatory Squeeze

TENCENT: Long Arm of the Law: Mainland China’s MIIT has ordered a temporary suspension of updates to apps from November 24, 2021. This is not...

Thomas J. Monaco

China Evergrande Group – Levies and Liquidations

EVERGRANDE: Authorities have seized Evergrande's stadium project. The Chairman reduced his family’s stake, but we await the outcome of a bond...

Thomas J. Monaco

Singapore Exchange - Ringing Hollow

SGX: A50 Challenges: HKEx launched the MSCI China A50 Connect, which directly competes with 20% of SGX' PBT. A recent competitor event revealed...

Thomas J. Monaco

China Evergrande Group – Thanks S&P

EVERGRANDE: S&P issued a scathing report suggesting that Evergrande “will likely default because the company has lost its main business. Not...

Thomas J. Monaco