The asset management segment recorded a revenue of HK$ million ( issued by China Cinda Group and the bank, respectively. means of a prospectus. Such prospectus will contain detailed information about the company China Cinda Asset Management Co., Ltd. CHINA CINDA ASSET MANAGEMENT CO., LTD IPO The material stated above is according to the prospectus issued by the issuer. Neither.
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Bad-debt management is a business not easy to understand. After spending two days trying to make sense of the 3. What really matters is the policy,” seemed to be the gist of their response. From the numbers, Cinda looks promising. Its profit increased from 2. Yet, bad-debt management and pricing in China, where professional liquidators do not exist, is never transparent.
It can be the result of bad-loan managers trading assets among themselves at janagement inflated values; or local governments “repaying” bad loans with more failing businesses. The sharp rise in Cinda’s account receivables to income ratio from So what is Beijing’s policy on Cinda?
InCinda Corp was established to take over The chance of recovery of these loans is close to zero. The ministry is, however, reluctant to peospectus this over to give Cinda, the listing entity, a clean entry. Bear in mind, the listing entity is separate from Cinda Corp and is controlled by prospects ministry.
Instead, it sold the loans to the listing entity at That still costs Cinda is to repay it in five annual instalments of 9.
Cinda’s sweetener fails to hide toxins of sugar-coated poison
That is far from a good start for the listing entity. Over the years, Cinda has acquired bad loans at two different rates – commercial or market and a government-set rate higher than the market rate. Let’s call the first, “good bad loan”, and the second, “bad bad loan”. Although Cinda has acquired 28 billion yuan worth of bad loans on commercial terms over the years, the “bad bad loan” assets still form the bulk of its balance sheet. Besides, it has to pay the instalments to the ministry.
In the name of reforms, the central bank is also cutting its lending to Cinda. That has caused Cinda’s loans from the central bank to drop from To mitigate this impact, the ministry waived Cinda’s obligation to repay the It will now be settled with tax payable by Cinda and CCB, instead.
But that’s not enough to guarantee Cinda aszet good profit to pay the ministry the 9. It needs to be a “monopoly” to stay afloat. After all, Cinda’s management has already tried its hands at manabement sorts of businesses, without much success, such as securities, futures, investment banks, fund and insurance.
It has even acquired two listed companies. So in Junethe government gifted Cinda a policy to make it the first and the only asset management company to acquire distressed assets from non-financial enterprises. That allows it to borrow money from the banks and pour them into dubious debt and assets of non-financial enterprises such as property developers and miners reeling from the government’s cooling measures – in short, lending to cash-strapped private enterprises.
The book value of this kind of asset has grown times to With its bank borrowing rocketing To investors, the big question is whether this policy sweetener is sweet enough to hide the bitterness of the toxic financial waste that Assset is peddling as asset. By the way, Cinda has just written off 4. Despite the policy sweetener, its return on equity managekent dropped from There are also management issues.
Last year, the regulator found defects in its review of assets, disposal of assets, internal control, audit, cash and financial management – almost all aspects of management function. Third, with three bad-loan management companies lining up for listing, how long Cinda will keep the “monopoly” access to non-financial enterprises’ assets is anybody’s guess. That raises the question if the sweetener – Cinda’s unique selling point – is at all sweet or merely sugar-coated poison.
Skip to main content. Cinda’s sweetener fails to hide toxins of sugar-coated poison. Saturday, 30 November,4: Tuesday, 28 April, Related topics Cinda Money Matters. You are signed up. We think you’d also like. Thank you You are on the list. This article appeared in the South China Morning Post print edition as: Cinda’s sweetener fails to mask sugar-coated poison.
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