Head of China Research - Forsyth Barr Asia, Forsyth Barr Asia

David Millhouse

Head of China Research - Forsyth Barr Asia

Forsyth Barr Asia

Thematic (Sector/Industry)

China A-shares closed down almost 8% on Monday, on heavy volumes, the largest fall since February 2007. Whilst there were several negative announcements (corruption crackdowns, insider selling at SOEs, regulator speeding up IPO approvals), the KEY reason for the move was the margin trading suspension at three of the largest brokers in China. The brokers, banks and insurance sectors were all limit down. Below we look to explain:<ol><li>What changes to margin trading have been made, and the implications </li><li>How large margin trading in China is </li><li>Does this mean the government wants the stock market down </li><li>Our view on A-share market going forward </li></ol>

China A-shares closed down almost 8% on Monday, on heavy volumes, the largest fall since February 2007. Whilst there were several negative announcements (corruption crackdowns, insider selling at SOEs, regulator speeding up IPO approvals), the KEY reason for the move was the margin trading suspension at three of the largest brokers in China. The brokers, banks and insurance sectors were all limit down. Below we look to explain:What changes to margin trading have been made, and the implications How large margin trading in China is Does this mean the government wants the stock market down Our view on A-share market going forward 

This week's flash-crash in China: thoughts and implications

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Capital Markets

Shengjing Bank Co Ltd H / Equity Capital Markets

Shengjing Bank files for IPO to raise equity to strengthen its balance sheet.For momentum/liquidity investors, we would take the deal, given the recent strong performance of banking peers. However, investor should be aware that company's relative valuation are not supportive of a strong run-up against its peers.For long-term/value investors, we would like to avoid the deal, given that the valuation of 0.82x-0.86x 15E PBV is merely on-par with nationwide banks and region wide commercial banks’ average valuation of 0.83x, despite that the a higher growth potential and more superior operating indicator could justify somewhat premium, which might be limited.

Shengjing Bank files for IPO to raise equity to strengthen its balance sheet.For momentum/liquidity investors, we would take the deal, given the recent strong performance of banking peers. However, investor should be aware that company's relative valuation are not supportive of a strong run-up against its peers.For long-term/value investors, we would like to avoid the deal, given that the valuation of 0.82x-0.86x 15E PBV is merely on-par with nationwide banks and region wide commercial banks’ average valuation of 0.83x, despite that the a higher growth potential and more superior operating indicator could justify somewhat premium, which might be limited.

Shengjing Bank IPO: Competitive Chinese regional bank, strong peer momentum, valuation rich

China

Shengjing Bank Co. Ltd. provides banking services. The Company offers various financial services, funds business, international business, and investment services for individuals and small and medium enterprises.

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Shengjing Bank Co Ltd H (2066 HK)

This week's flash-crash in China: thoughts and implications

China A-shares closed down almost 8% on Monday, on heavy volumes, the largest fall since February 2007. Whilst there were several negative...

David Millhouse

Shengjing Bank IPO: Competitive Chinese regional bank, strong peer momentum, valuation rich

Shengjing Bank files for IPO to raise equity to strengthen its balance sheet.For momentum/liquidity investors, we would take the deal, given the...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)