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)

*Document 15: Recently the China Bank and Insurance Regulatory Commission (CBIRC) issued guidance to both banks and insurers on implicit debt of local government financing vehicles (LGFV) via Document 15 – tightening the screws even further;  and*No Let Up In Sight: Coupled with the structural reforms of an increase in risk-based capital minimums for certain state banks, the partial bank Wealth Management Product (WMP) resolution, and the recent reserve requirement ratio (RRR) reduction, these tightening measures should act to contain some of the out of control financial risk within the mainland Chinese financial system.

*Document 15: Recently the China Bank and Insurance Regulatory Commission (CBIRC) issued guidance to both banks and insurers on implicit debt of local government financing vehicles (LGFV) via Document 15 – tightening the screws even further;  and*No Let Up In Sight: Coupled with the structural reforms of an increase in risk-based capital minimums for certain state banks, the partial bank Wealth Management Product (WMP) resolution, and the recent reserve requirement ratio (RRR) reduction, these tightening measures should act to contain some of the out of control financial risk within the mainland Chinese financial system.

*D-SIB Standards Released: The People’s Bank of China (PBOC) and China Bank and Insurance Regulatory Commission (CBIRC) on April 2, 2021 released finalized new capital standards for the country’s domestic systemically important banks (D-SIBs), and indicated that the need for banking  crisis liquidation plans; 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 April 2, 2021 released finalized new capital standards for the country’s domestic systemically important banks (D-SIBs), and indicated that the need for banking  crisis liquidation plans; 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. 

China Banks – Big Capital Raises Coming

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 analyse the changes of A-H premium on 185 stocks over the last week. The average A-H premium was 85.6% as of Jun 26th.</li>
<li>The average A-H premium changed by 5.5ppt week-on-week, led by real estate, information technology, utilities and offset by communication services, energy.</li>
<li>We highlight weekly changes in A-H premium for Midea, Cmoc, Htsc, China Longyuan, Times Electric, Innocare.</li>
</ul>


We analyse the changes of A-H premium on 185 stocks over the last week. The average A-H premium was 85.6% as of Jun 26th.
The average A-H premium changed by 5.5ppt week-on-week, led by real estate, information technology, utilities and offset by communication services, energy.
We highlight weekly changes in A-H premium for Midea, Cmoc, Htsc, China Longyuan, Times Electric, Innocare.


A-H Premium Weekly (Jun 26th): Midea, Cmoc, Htsc, China Longyuan, Times Electric, Innocare

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 is little evidence of any major economic shutdown in China during early this year. There is also little evidence of the period when China re-opened its economy only to find most all other economies were closed. It was arguably an especially difficult period for China and its banks. Where many banks have now reported their results, it becomes clearer that the numbers hardly reflect crisis - temporary or otherwise. This though is not what really matters; rather it is the implication for profit delta during 2H20.

There is little evidence of any major economic shutdown in China during early this year. There is also little evidence of the period when China re-opened its economy only to find most all other economies were closed. It was arguably an especially difficult period for China and its banks. Where many banks have now reported their results, it becomes clearer that the numbers hardly reflect crisis - temporary or otherwise. This though is not what really matters; rather it is the implication for profit delta during 2H20.

<ul>
<li>We analyse the changes of A-H premium on 185 stocks over the last week. The average A-H premium was 80.2% as of Jun 19th.</li>
<li>The average A-H premium changed by 3.7ppt week-on-week, led by utilities, information technology, consumer discretionary and offset by energy, industrials.</li>
<li>We highlight weekly changes in A-H premium for China Longyuan, China Coal, Remegen, Yangtze Optical Fibre And-H.</li>
</ul>


We analyse the changes of A-H premium on 185 stocks over the last week. The average A-H premium was 80.2% as of Jun 19th.
The average A-H premium changed by 3.7ppt week-on-week, led by utilities, information technology, consumer discretionary and offset by energy, industrials.
We highlight weekly changes in A-H premium for China Longyuan, China Coal, Remegen, Yangtze Optical Fibre And-H.


A-H Premium Weekly (Jun 19th): China Longyuan, China Coal, Remegen, Yangtze Optical Fibre And-H

China

China Zheshang Bank Co., Ltd. is a national joint-stock commercial bank offering a comprehensive range of commercial banking products and services in Mainland China. It operates through Corporate Banking, Retail Banking, and Treasury Business segments, providing services such as loans, deposits, wealth management, and trade financing. The bank officially commenced operations on August 18, 2004, and is headquartered in Hangzhou, China, tracing its roots to Zhejiang Commercial Bank established in 1993.

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China Zheshang Bank (2016 HK)

China Banks – Screws Tighten On LGFVs

CHINA BANKS: Recently the CBIRC issued guidance on implicit LGFV debt via Document 15 – further tightening the screws on mainland China's financial...

Thomas J. Monaco

China Banks – Big Capital Raises Coming

CHINA BANKS: The PBOC and CBIRC released finalized new capital standards for the country’s D-SIBs. Equity raises require P/BV over 1.0x and many of...

Thomas J. Monaco

A-H Premium Weekly (Jun 26th): Midea, Cmoc, Htsc, China Longyuan, Times Electric, Innocare

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Midea, Cmoc, Htsc, China Longyuan, Times Electric, Innocare.

Ke Yan, CFA, FRM

China Banks – Muted Profit Delta

The profile for provision expenses and profits at China's banks during 1H20 is wholly different to many others globally.

Daniel Tabbush

A-H Premium Weekly (Jun 19th): China Longyuan, China Coal, Remegen, Yangtze Optical Fibre And-H

We analyzed A-H premium changes in the past week and highlight A-H premium changes for China Longyuan, China Coal, Remegen, Yangtze Optical Fibre...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)