China Macroeconomics & Academia

Christopher Balding

Macroeconomics

With Chinese manufacturing showing signs of improvements post-Chinese New Year, it could be said that the country’s economy is regaining its strength.  China owes much of this stabilization to rapid growth in debt levels, investment, and declining outflows from tightened capital controls. Conversely, this implies it appears to be falling back on old drivers to keep growth high. Manufacturing is regaining some momentum due to increased exports and price increases in heavy industry like steel…

With Chinese manufacturing showing signs of improvements post-Chinese New Year, it could be said that the country’s economy is regaining its strength.  China owes much of this stabilization to rapid growth in debt levels, investment, and declining outflows from tightened capital controls. Conversely, this implies it appears to be falling back on old drivers to keep growth high. Manufacturing is regaining some momentum due to increased exports and price increases in heavy industry like steel…

Despite all the focus on Chinese financial markets and the accompanying imbalances, there are questions about how exactly to trade China right now.  Many have used the China blowing up thesis trying to replicate the Big Short.  This seems like a risky trade with a potentially very lengthy wait. There are other obvious trades in the interim that seem to have significantly positive risk adjusted return potential.  The trade today builds on one of the most widely recognized imbalances but creates…

Despite all the focus on Chinese financial markets and the accompanying imbalances, there are questions about how exactly to trade China right now.  Many have used the China blowing up thesis trying to replicate the Big Short.  This seems like a risky trade with a potentially very lengthy wait. There are other obvious trades in the interim that seem to have significantly positive risk adjusted return potential.  The trade today builds on one of the most widely recognized imbalances but creates…

Lots of ink or ones and zeros in today’s world about the explosion of credit propping up the Chinese economy.  So much so that I really will not rehash this plot of land.  I think what is interesting, and really most worrying, is how little impact the credit explosion has had on real economic activity.The current credit explosion we are witnessing in China is bigger in absolute term than some of the post-GFC pops in credit and by some relative measures even bigger in relative terms.  Only the…

Lots of ink or ones and zeros in today’s world about the explosion of credit propping up the Chinese economy.  So much so that I really will not rehash this plot of land.  I think what is interesting, and really most worrying, is how little impact the credit explosion has had on real economic activity.The current credit explosion we are witnessing in China is bigger in absolute term than some of the post-GFC pops in credit and by some relative measures even bigger in relative terms.  Only the…

What Is Really Worrying About the Chinese Credit Bubble

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Huaqin Technology / Equity Capital Markets

<ul>
<li>Huaqin adopts "3+N+3" global large platform strategy. The core of business model lies in large-scale manufacturing and vertical integration. Due to “Buy &amp; Sell model”, profitability is a concern.</li>
<li>Despite negative operating cash flow, Huaqin still announced RMB1.216 billion dividend. The controlling shareholder has pledged shares for financing, which attracted market attention to the true adequacy of its funds.</li>
<li>Although Huaqin has big revenue scale, its profit quality, cash flow, corporate governance transparency are weaker than peers, making it difficult to enjoy the same level of valuation premium.   </li>
</ul>


Huaqin adopts "3+N+3" global large platform strategy. The core of business model lies in large-scale manufacturing and vertical integration. Due to “Buy &amp; Sell model”, profitability is a concern.
Despite negative operating cash flow, Huaqin still announced RMB1.216 billion dividend. The controlling shareholder has pledged shares for financing, which attracted market attention to the true adequacy of its funds.
Although Huaqin has big revenue scale, its profit quality, cash flow, corporate governance transparency are weaker than peers, making it difficult to enjoy the same level of valuation premium.   


Pre-IPO Huaqin (A/H Listing) - Low Profit Margin Is a Pain Point Due to Flaws in Business Model

Industrial output data implies a continued further increase in the Chinese PMI number due May 1.  Steel output has made small gains in April over March in advance of the upcoming building season. PTA output has increased significantly in April over March while glass has inched up incrementally.  Coal output and inventories have trended downwards given the increasingly mild weather in spring between winter and summer peak load times.  We are anticipating an uptick in the official PMI given the…

Industrial output data implies a continued further increase in the Chinese PMI number due May 1.  Steel output has made small gains in April over March in advance of the upcoming building season. PTA output has increased significantly in April over March while glass has inched up incrementally.  Coal output and inventories have trended downwards given the increasingly mild weather in spring between winter and summer peak load times.  We are anticipating an uptick in the official PMI given the…

China

Luxshare Precision Industry Co., Ltd. researches, manufactures and sells connectors. The Company's products are widely used in computers, communication devices, consumer electronics products and automobiles.

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Luxshare Precision Industry (002475 CH)

Early Look at May Chinese Data

With Chinese manufacturing showing signs of improvements post-Chinese New Year, it could be said that the country’s economy is regaining its...

Christopher Balding

Trading China: The Little Short

Despite all the focus on Chinese financial markets and the accompanying imbalances, there are questions about how exactly to trade China right...

Christopher Balding

What Is Really Worrying About the Chinese Credit Bubble

Lots of ink or ones and zeros in today’s world about the explosion of credit propping up the Chinese economy. So much so that I really will not...

Christopher Balding

Pre-IPO Huaqin (A/H Listing) - Low Profit Margin Is a Pain Point Due to Flaws in Business Model

Huaqin's faces profitability concerns due to its Buy & Sell model. Despite large revenue, questions arise about the company's financial stability...

Xinyao (Criss) Wang

Chinese Industrial Data on PMI Release

Industrial output data implies a continued further increase in the Chinese PMI number due May 1. Steel output has made small gains in April over...

Christopher Balding

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Early Look at May Chinese Data

With Chinese manufacturing showing signs of improvements post-Chinese New Year, it could be said that the country’s economy is regaining its...

Christopher Balding

Trading China: The Little Short

Despite all the focus on Chinese financial markets and the accompanying imbalances, there are questions about how exactly to trade China right...

Christopher Balding

What Is Really Worrying About the Chinese Credit Bubble

Lots of ink or ones and zeros in today’s world about the explosion of credit propping up the Chinese economy. So much so that I really will not...

Christopher Balding

Pre-IPO Huaqin (A/H Listing) - Low Profit Margin Is a Pain Point Due to Flaws in Business Model

​Huaqin's faces profitability concerns due to its Buy & Sell model. Despite large revenue, questions arise about the company's financial stability...

Xinyao (Criss) Wang

Chinese Industrial Data on PMI Release

Industrial output data implies a continued further increase in the Chinese PMI number due May 1. Steel output has made small gains in April over...

Christopher Balding

Huaqin's faces profitability concerns due to its Buy & Sell model. Despite large revenue, questions arise about the company's financial stability...