Silver Point

Thomas J. Monaco

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

Thematic (Sector/Industry)

*D-SIB Standards Released: The People’s Bank of China (PBOC) and China Bank and Insurance Regulatory Commission (CBIRC) on December 3, 2020 released finalized standards for the country’s domestic systemically important banks (D-SIBs), and indicated that tighter regulations will be announced shortly; and* Aggressive Capital Raises Expected: In our view, the forthcoming regulations are likely to focus on: additional paid-in capital; leverage ratios; risk concentrations; corporate governance; disclosure levels; and mechanism to prevent systemic risk; and internal controls. The idea is to finally strengthen mainland Chinese bank balance sheets and improve their loss absorption capacity. Problem for equity raises is that P/BV must be over 1.0x for the raise and many of the potential D-SIBs are trading below book value.

*D-SIB Standards Released: The People’s Bank of China (PBOC) and China Bank and Insurance Regulatory Commission (CBIRC) on December 3, 2020 released finalized standards for the country’s domestic systemically important banks (D-SIBs), and indicated that tighter regulations will be announced shortly; and* Aggressive Capital Raises Expected: In our view, the forthcoming regulations are likely to focus on: additional paid-in capital; leverage ratios; risk concentrations; corporate governance; disclosure levels; and mechanism to prevent systemic risk; and internal controls. The idea is to finally strengthen mainland Chinese bank balance sheets and improve their loss absorption capacity. Problem for equity raises is that P/BV must be over 1.0x for the raise and many of the potential D-SIBs are trading below book value. 

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analysed the earning revision of component stocks of HSCEI in the past month.</li>
<li>We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.</li>
<li>We highlighted EPS revision on HAIER SMARTHOME, BOC, AKESO, Kuaishou, XPENG, ZIJIN MINING, MEITUAN, Pop Mart Intl.</li>
</ul>


We analysed the earning revision of component stocks of HSCEI in the past month.
We tabulated stocks with the top impact on index's EPS, stocks' EPS revision, and revenue revision.
We highlighted EPS revision on HAIER SMARTHOME, BOC, AKESO, Kuaishou, XPENG, ZIJIN MINING, MEITUAN, Pop Mart Intl.


HSCEI Index Earning Revision (Jun): HAIER SMARTHOME, BOC, AKESO, Kuaishou, XPENG, ZIJIN MINING

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

There are few banks that compare to those in China on controlling costs. This will likely be the way forward for others in Asia and globally. Where some have seen costs/assets down considerably and to low levels in any context, others have more room to cut. Of the largest banks by assets, <a href="https://www.smartkarma.com/entities/postal-savings-bank-of-china" target="_blank" data-smartkarma-citation="entities:22848:1" rel="noopener">Postal Savings Bank of China (1658 HK)</a>,<a href="https://www.smartkarma.com/entities/china-merchants-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:714:1" rel="noopener">China Merchants Bank A (600036 CH)</a>and <a href="https://www.smartkarma.com/entities/ping-an-bank-co-ltd-a" target="_blank" data-smartkarma-citation="entities:681:1" rel="noopener">Ping An Bank Co Ltd A (000001 CH)</a> have seen the least improvement in costs/assets over the past nine years – and where this ratio remains high compared with peers.

There are few banks that compare to those in China on controlling costs. This will likely be the way forward for others in Asia and globally. Where some have seen costs/assets down considerably and to low levels in any context, others have more room to cut. Of the largest banks by assets, Postal Savings Bank of China (1658 HK),China Merchants Bank A (600036 CH)and Ping An Bank Co Ltd A (000001 CH) have seen the least improvement in costs/assets over the past nine years – and where this ratio remains high compared with peers. 

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of June 26th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for Kingboard, Alibaba, Kingboard Laminates, Smic, Tencent, China Mobile, CNOOC, Pop Mart Intl, Hua Hong Semi, Knowledge Atlas.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of June 26th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for Kingboard, Alibaba, Kingboard Laminates, Smic, Tencent, China Mobile, CNOOC, Pop Mart Intl, Hua Hong Semi, Knowledge Atlas.


HK Connect Flows Weekly (Jun 26th): Kingboard, Alibaba, Kingboard Laminates, Smic, Tencent, CNOOC

There is a major difference in risk profile of China and US banks. We have discussed at length in our recent report, the significantly higher level of reserves at US banks during 1H20. For China's banks newly accumulated loan loss reserves (LLR) in the 1H20 is almost zero. US banks have seen a doubling of LLR and the ratio of LLR/loans has increased dramatically. This is wholly different to China banks. And this is not the only concern: China's banks have been lending more aggressively than most all others in Asia, while their hybrid capital is increasing as a proportion of total capital.

There is a major difference in risk profile of China and US banks. We have discussed at length in our recent report, the significantly higher level of reserves at US banks during 1H20. For China's banks newly accumulated loan loss reserves (LLR) in the 1H20 is almost zero. US banks have seen a doubling of LLR and the ratio of LLR/loans has increased dramatically. This is wholly different to China banks. And this is not the only concern: China's banks have been lending more aggressively than most all others in Asia, while their hybrid capital is increasing as a proportion of total capital. 

China Banks – Subtle Risk Deterioration

China

Postal Savings Bank of China is a commercial retail bank offering deposits, loans, credit and debit cards, payment services, and wealth management products. It primarily serves "Sannong" (agriculture, rural areas, and farmers), small and medium-sized enterprises, and urban and rural residents through an extensive network across China. The bank was formally established in 2007 and is headquartered in Beijing, China.

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Postal Savings Bank of China (1658 HK)

China Banks – About Time

CHINA BANKS: PBOC and CBIRC Released Finalized D-SIB Standards and Indicated Tighter Regulations. Aggressive Capital Raises Are Expected.

Thomas J. Monaco

HSCEI Index Earning Revision (Jun): HAIER SMARTHOME, BOC, AKESO, Kuaishou, XPENG, ZIJIN MINING

We analyzed HSCEI's consensus for Jun 2026 and highlighted changes of EPS in HAIER SMARTHOME, BOC, AKESO, Kuaishou, XPENG, ZIJIN MINING, MEITUAN,...

Ke Yan, CFA, FRM

China Banks – Controlling Costs

China banks are ahead on controlling costs. This will likely be the way for others in Asia and globally. PSBC, CMB and Ping An Bank have seen the...

Daniel Tabbush

HK Connect Flows Weekly (Jun 26th): Kingboard, Alibaba, Kingboard Laminates, Smic, Tencent, CNOOC

We analyzed southbound Hong Kong connect flows in the past week and highlighted flows for Kingboard (148 HK), Alibaba (9988 HK), Kingboard...

Ke Yan, CFA, FRM

China Banks – Subtle Risk Deterioration

There is a major difference in risk profile of China and US banks. Here we are specifically referring to the degree of accumulated loan loss...

Daniel Tabbush

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)