China Cinda Asset Mgt 1359

[winston]

not vested

If you’re planning to invest in China, watch this stock

The company is called China Cinda Asset Management (1359 HK).

Cinda is one of the largest state-controlled asset management companies in China. The company mostly deals in acquiring distressed assets – those that are generally sold because the owner has gone bankrupt or is heavily in debt – and selling them on at a high return.

And right now, as China is saddled with a pile of debt ready to be restructured and reduced, there’s a lot of work for companies like Cinda.

Cinda has 31 branches nationwide for its distressed asset business and nine subsidiaries involved in financial investment and services businesses, such as securities, trust, leasing, mutual fund, life insurance, P&C insurance, property development, etc.

Unusually though, what’s got me most interested about this company are its investors. Some of the smartest and most clued-in international financial investors have decided that Cinda is a viable way to play China. And I think we should pay attention.

Why do these guys matter?

In 2012, a handful of leading Western financial institutions ranging from banks to sovereign wealth and hedge funds bought strategic stakes in Cinda. These include Norwegian central bank Norges Bank (the oil fund), hedge funds such as Farallon Capital Management LLC, Oak Tree Capital Group LLC and Och-Ziff Capital.

The fact that foreign Western financial institutions are participating shows that they believe it is possible to make money from China. So far, it’s done pretty well for them. Since it listed in December 2013, Cinda has gained 22.9%.

But these are institutions that are after big gains. They didn't invest in Cinda just to make 22%. So is there something they know that we don’t?

We’ll be able to find out soon.

Right now, Cinda is currently in a lock-up period. What does that mean exactly? Well a lock-up period is one where investors of a hedge fund aren’t allowed to acquire or sell shares.

I am watching closely to see what these investors will do in December when the lock-up period expires. If they stay invested, I believe they see Cinda as a multi-bagger, which would mean that the current gain for Cinda has to be followed by strong additional gains over the next few years. And more importantly, it shows that they see a light at the end of the tunnel for China.

How do we benefit?

Put simply, I believe that if these investors decide to stay invested, the merrier China scenario will become a reality. And it’s vice versa if they don’t.

We have seen events like this in the past. For instance, during the 1997/98 Asian Financial Crisis, American institutions like GE Capital bought up distressed assets in Thailand and made an absolute killing.

The same can be said about Abu Dhabi and Quatar’s sovereign wealth funds. They invested in Barclays in 2008 and yielded handsome returns when it sold five years later.

Great for them but more importantly, their purchases and continued interest were, in hindsight, great buy signals for normal investors.

I believe this could be a similar opportunity. Keep your eyes peeled!

Source: The New World

[investar]

This is indeed a good "indicator stock" to keep on watchlist.

Good read on PE in China:
http://www.reuters.com/article/2014/04/ ... 0D20140410

[winston]

Not vested

Oct 3, 2014

<Research Report>CICC: CHINA CINDA (01359.HK) MINSHENG BANK (01988.HK) to benefit from eased home loan in CN

CICC said in the latest research report that owing to the easing monetary conditions and banks' increasing preference for mortgages, the mortgage rates are expected to drop in the coming few quarters.

The research house believed that while the real property market will face ongoing correction, the policy could help slow the pace of easing, stabilize market confidence and prevent the risks of a hard landing.

CICC expected CHINA CINDA (01359.HK) to be the major beneficiary from the policy and showed preference to MINSHENG BANK (01988.HK).

Source: AAStocks Financial News

[winston]

not vested

Sep 1, 2014

<Research Report>CHINA CINDA (01359.HK) kept Buy, target reduced to $5.2 - Citi

Citigroup, in its latest research report, said it believes CHINA CINDA (01359.HK) will register satisfactory earning growth unless a hard landing is seen for the Chinese economy.

The Buy rating is maintained, as the high return on total assets and low debt ratio have not been priced in.

The target price is lowered from $5.5 to $5.2.

Source: AAStocks Financial News

[winston]

not vested

Aug 29, 2014

CHINA CINDA (01359.HK) plans to expand collaboration with home developers

CHINA CINDA (01359.HK) vice president Wu Song-yun stated the housing market is in the stage of adjustments, thus more developers will handle their non-performing assets and carry out restructuring.

He mentioned the group will expand the collaboration with property developers in the future, planning to acquire projects in Tier-1 and Tier-2 cities, so as to keep risks within a controllable spectrum. ~

Source: AAStocks Financial News

[winston]

not vested

Aug 29, 2014

CHINA CINDA (01359.HK) expects Chinese banks to quicken bad asset disposals in 2H

CHINA CINDA (01359.HK)'s president ZANG Jingfan said Chinese banks saw a growth in both balance and ratio of bad loans for the first half with an overall increase in the loans amount of around RMB100 billion.

The group expected Chinese banks to dispose or transfer of soured loans at a quicken pace in the second half that offer it with acquisition opportunities. Besides, the group believed the speed for acquiring traditional assets in the first half can be kept.

The company's additionally acquired traditional assets in the first half amounted to RMB7.2 billion, mainly from banks and non-bank financial institutions, representing a yearly increase of 2.4 times.
~
Source: AAStocks Financial News

[winston]

vested

Aug 29, 2014

<Research Report>CHINA CINDA (01359.HK) kept Outperform, target trimmed to $5.5 - C Suisse

Credit Suisse said in its latest research report that CHINA CINDA (01359.HK)'s 1H2014 revenue rose 30% year-on-year to RMB5.3 billion, below the market consensus of 8% and only accounting 44% of full-year consensus earnings.

Given the company's weakening asset quality and lower annualised return, CS thus revised downward its 2014/15 earnings estimates by 18%/13%, and cut the target price from $6.14 to $5.5.

CS added that it was positive for China Cinda's long-term investment case and believed the company will be benefited from the mainland economic restructuring, SOE reform and macro de-leveraging.

The Outperform rating was kept.
~
Source: AAStocks Financial News

[winston]

vested

Aug 28, 2014

<Research Report>CHINA CINDA (01359.HK) kept Buy, target reduced to $4.67 - BofAML

CHINA CINDA (01359.HK)?s 1H2014 results were better than expected, and core profit rose 22.1%, which was mainly driven by the interest income from the reorganization of the business segments, BofA Merrill Lynch said in a report.

However, profit margin dropped more than expected and it may need longer time for sales of assets and revenue to record growth.

The bank lowered the company's 2014-2016 earnings forecast by 0%-2% to reflect the decline of margin and the rise of credit cost.

Target price was cut from $4.72 to $4.67, with the Buy rating unchanged.

Source: AAStocks Financial News

[winston]

not vested

China Cinda Asset Management Co., Ltd.– Monopolistic advantage in the industry with the strong profit growth
Rating: Buy
Closing price: 4.10
Target price: 5.20

Distressed asset management, investment and asset management and financial service, and distressed asset management is the major business of China Cinda, by the end of June 2014, the proportion to incomes were 55.4%, 18.7% and 28.1%, and EBTs of each part were 72.9%, 21.7% and 9.2% respectively;

The Group’s DES Assets are mainly unlisted shares of DES companies. By the end of 1H2014, China Cinda held 182 DES Companies with total book value of RMB34.78 billion, down 0.2% slightly compared with the end of 2013, and 67 listed DES companies ofl book value RMB7.674 billion;

It is hard to estimate the valuation for China Cinda due to its unique and complicated operating model, especially for its distressed asset management and PE investments, which is difficult to find the benchmark. However, considering China Cinda’s strong governmental background, the monopolistic advantages in business and the large market demand, we have the confidence in China Cinda’s future performance;

Based on the current valuation of domestic listed banks and insurers in terms of P/B in valuation, we increase the 12-m target price of China Cinda to HK$5.2, around 26.8% higher than the latest closing price, equivalent to 10.6xP/E and 1.5xP/B in 2015 respectively, maintain at Buy rating.

Source: Phillips

[winston]

not vested

<Research Report>CHINA CINDA (01359.HK) initiated Overweight, target at $5.1 - Barclays
Nov 14, 2014

Barclays initiated the Overweight rating of CHINA CINDA (01359.HK) with a target price of $5.1.

As a diversified financial services platform, despite the soft landing of China's economy, it is expected that China Cinda could recorded a year-on-year growth of 20% in the upcoming three years.

The ROE is expected to undergo gradual improvement, reaching 14.9%/17.1%/18% in 2014 to 2016.

Source: AAStocks Financial News