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

China Cinda Asset Management / Equity Bottom-Up

*Weak 2H19 Result: China Cinda Asset Management (1359.HK) [CINDA] reported 2H19 profit of CNY 4.0 bn – declining CNY 5.0 bn or 55.6% linked period. What could go wrong, actually did for CINDA. Driving the challenged results operating revenues declined CNY CNY 6.5 bn (33.2%); and  * Risks Well Priced For: Trading at 1/3 of book value with a 9.4% yield (not likely to hold), much of the macro-headwinds associated with COVID-19 would appear to be priced in as we note the following positives: a) declining funding costs and a rise in bank NPL formation rates are favorable to CINDA’s NPL disposal business; b) the announced sale of its loss-making subsidiary; and c) the allocation of more resources to its traditional NPL disposal business.

*Weak 2H19 Result: China Cinda Asset Management (1359.HK) [CINDA] reported 2H19 profit of CNY 4.0 bn – declining CNY 5.0 bn or 55.6% linked period. What could go wrong, actually did for CINDA. Driving the challenged results operating revenues declined CNY CNY 6.5 bn (33.2%); and  * Risks Well Priced For: Trading at 1/3 of book value with a 9.4% yield (not likely to hold), much of the macro-headwinds associated with COVID-19 would appear to be priced in as we note the following positives: a) declining funding costs and a rise in bank NPL formation rates are favorable to CINDA’s NPL disposal business; b) the announced sale of its loss-making subsidiary; and c) the allocation of more resources to its traditional NPL disposal business. 

China Orient Asset Management Co (1167Z CH)

China Cinda Asset – Negativity Priced In