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Chinesemarkets

HUYA | HUYA | Long at $2.61HUYA NYSE:HUYA operates game live streaming platforms in China. This stock got my attention based on the reported fundamentals and price position, but moderate "Chinese delisting" risks exist given the US's new political administration. Book Value = $3.23 (Undervalued) Forward P/E = 4.1x (Growth) Debt-to-equity = 0x (Healthy) Quick Ratio = 1.56x (Healthy) Altman's Z Score = <1.8 (Bankruptcy risk is relatively high) From a technical analysis perspective, the stock price momentum has shifted upward based on the historical simple moving average. The price often consolidates within and slightly outside of this simple moving average band before progressing higher (after a long period of selling). While near term-declines are a risk, a longer-term hold (if the fundamentals do not change and delisting doesn't occur) may pay off given the value, growth, and overall health of the company. Thus, at $2.61, NYSE:HUYA is in a personal buy zone. Targets into 2028: $3.45 (+32.2%) $5.80 (+122.2%)
NYSE:HUYALong
by WorthlessViews
JD.cm | JD | Long at $33.16Like Amazon NASDAQ:AMZN and Alibaba NYSE:BABA , I suspect AI and robotics will enhance JD.com's NASDAQ:JD automation in warehousing, delivery, and retail. There is some risk here, like other Chinese stocks, that they could be delisted from the US market if trade/war tensions rise. But I just don't think that is likely (no matter the threats) due to the importance of worldwide trade and investment. I could be way wrong, though... NASDAQ:JD has a current P/E of 8.1x and a forward P/E of 1.2x, which indicates strong earnings growth ahead. The company is healthy, with a debt-to-equity of 0.4x, Altmans Z Score of 2.6, and a Quick Ratio of .9 (could be better). From a technical analysis perspective, the historical simple moving average (SMA) band is still in an overall downtrend but starting to level out (accumulation of share area). It is possible, however, that the price may drop into the $20s to close out the existing price gaps on the daily chart as tariff threats arise. But that area is another personal entry zone if fundamentals hold. Thus, while it could be a bumpy ride and the risk is there for delisting, NASDAQ:JD is in a personal buy zone at $33.16 (with known risk of drop to the $20s in the near-term). Targets into 2028: $44.00 (+32.7%) $52.00 (+56.8%)
NASDAQ:JDLong
by WorthlessViews
$BABA Falling wedge breakout on dailyNYSE:BABA falling wedge breakout confirmed with MACD signalling bullish trend. There's volume gap just above 90 to 94 where price can move very fast. All sentiment indicator has been very bearish lately which makes me come to conclusion that this was the bottom. Market was positioning for TRUMP to possibly put on 60% tarrifs on china which doesn't seem to be happening now as Trump has suggested negotiations with President XI my PT is $99 for BABA in next 3 months
NYSE:BABALong
by ghostinvoid
Xiamen Changelight Soars 108% in Just 16 Days!Xiamen Changelight Analysis: Xiamen Changelight has seen a phenomenal rally, achieving a stunning 108% gain over the past 16 days. The recent bullish momentum has allowed the stock to achieve all target levels, with each level surpassed in quick succession. Trade Setup: Entry Point: $8.11 Stop Loss: $7.86 Target Levels: TP 1: $8.41 TP 2: $8.90 TP 3: $9.38 TP 4: $9.69 Technical Indicators: The stock has trended strongly above the Risological dotted trend line, showing a clear uptrend and sustained buying pressure. The price action’s alignment with this trend suggests confidence among buyers and the potential for continuation if volume remains supportive. Market Sentiment: The sharp rise in share price reflects strong interest in Xiamen Changelight, potentially driven by fundamental catalysts or broader market trends in its industry. With robust volume supporting the upward movement, the momentum appears sustainable, although some consolidation might occur after such a large gain. Outlook: With all targets reached, traders should monitor for any pullback or consolidation phase as new support levels are established. The strong trend could attract further interest, especially if broader sentiment remains positive. Keep an eye on volume and price stability to assess if another leg up is likely in the coming sessions.
SZSE:300102Long
by ProfitsNinja
The Looming Chinese Bond Market BubbleThe Chinese bond market is showing signs of a bubble, with rapid declines in bond yields and aggressive government interventions. Despite these warnings, some investors remain bullish due to a lack of alternatives. A potential burst could lead to significant financial instability, economic slowdown, and global market contagion. Key Indicators of a Bubble: Excessive Price Appreciation: Sharp decline in bond yields suggests prices are detached from fundamentals. Speculative Behavior: Investors are driven by limited alternatives rather than solid valuations. Government Intervention: Actions to cool the market indicate concern over potential instability. Potential Impacts of a Burst: Chinese Market: Financial instability, economic slowdown, and currency depreciation. Global Market: Contagion risk, increased volatility, and a global economic slowdown. Chain Reaction of a Burst: 1. Bond Prices Decline: Losses for bondholders. 2. Financial Institutions Suffer: Liquidity problems for banks. 3. Credit Crunch: Reduced lending. 4. Economic Slowdown: Dampened economic activity. 5. Currency Depreciation:*Inflationary pressures. 6. Global Contagion: Destabilization of global markets. Conclusion: The Chinese bond market's bubble risk demands close monitoring. Government interventions have provided temporary stability, but underlying economic issues need resolution to prevent a severe crisis. Investors should brace for potential volatility.
SSE:000001Short
by MorMedia
USD/CNH - LONG; China is dead!... and it is about to roll over. E.g. Sell it ALL!! This is the year (2023) to start the Long March (a familiar theme in Chinese history), to gain full stride, right into oblivion. Namely, the Chinese demographic implosion which has been gathering speed for quite a while now, will hit that country with undeniable force, essentially halving the population in less than the next decade and a half. This pretty much sums it up. (Why do you think they had the severe "Covid lock-downs", lasting for 3 years by now?! ...) Whether China will go down swinging is yet to be seen however, the outcome is a foregone conclusion, in any case. (Short of some oracle which could create 800 million Chinese, overnight, all between the ages of 21-35. China's current "R Factor" - reproductive rate - is half that of Covid and its varieties. - Just to illustrate the point.) The technical picture of this pair speaks for itself, as well, the pair landing/turning on massive support here. (Beijing couldn't allow the further appreciation of the Yuan without crushing an already imploding economy!) As for the monetary picture; China's >600% credit expansion in barely a decade is abjectly absurd, even by the recent, excessively loose global monetary standards. p.s. China had never had more than 70 consecutive expansion - or even stable - years in its 4000 year, illustrious history. The time has come, once again, with a well defined end in sight.
Long
by Nemo_Confidat
12
'Can China’s Long-Term Growth Rate Exceed 2–3 Percent?' SummaryThis is a summary of Michael Pettis' 'Can China’s Long-Term Growth Rate Exceed 2–3 Percent?' carnegieendowment.org As the text was quite long, this summarizes some critical points. China's high investment share of GDP and growing debt burden are interrelated, stemming from an investment-driven growth model that began in the 1980s when the country needed significant investment in infrastructure, urban property development, and manufacturing facilities. High domestic investment required high domestic savings, leading to a rapid savings increase by constraining household consumption and income growth. Policymakers now recognize the need to rebalance China's economy towards domestic consumption. High investment levels initially benefited the Chinese economy, as productive investment grew at the fastest pace in history. However, a successful development model should make itself obsolete, and China has closed the gap between its actual investment level and the level its businesses and workers can productively absorb. As productivity benefits of additional investment decline, more investment begins to generate less economic value than the value of employed resources. This can be observed in China's increasing debt numbers. Countries that followed this growth model experienced a period of rapid, sustainable growth with stable debt levels, followed by a period of rapid, unsustainable growth driven by a surging debt burden. China entered this phase around fifteen years ago. Therefore, the investment share of China's GDP must decline sharply in the next few years, as the conditions that made high investment levels sustainable no longer exist. Historical precedents suggest that reducing the investment share of GDP to a sustainable level is better for the economy's long-term health, growth, and stability. In this context, rebalancing the Chinese economy will require significant adjustments in its economic structure. Beijing must focus on boosting domestic consumption, though this would likely result in a decline in China's annual GDP growth to around 2-3 percent for many years. The current investment share of GDP is extraordinarily high, making it difficult to reduce it without significantly affecting overall economic activity. Policymakers in Beijing have increasingly called for an expansion in the role of consumption, but there are significant political constraints in implementing such policies. Rebalancing would require consumption to grow faster than GDP and GDP to grow faster than investment. This implies transferring income from governments and businesses to households, a process that has not yet seen concrete proposals. The decline in growth will be unevenly distributed, with local governments bearing the brunt of the adjustment while ordinary Chinese people experience less impact. This also means that sectors of the global economy that depend on Chinese investment growth will be more affected, while those reliant on Chinese consumption will be less impacted. China's investment share of GDP currently stands at around 42-44 percent, which is unsustainable in the long run. For the purposes of this analysis, it is assumed that China should reduce its investment share to 30 percent over ten years, a level typical of rapidly developing economies. As investment declines, the consumption share of GDP must rise. Michael presents five scenarios under which China can rebalance its economy: A. Rebalance with a surge in consumption: China's consumption would need to grow by 6-7% annually, while investment grows by 0-1% annually, resulting in a GDP growth rate of 4% over ten years. However, this requires politically difficult income transfers from local governments and wealthy individuals to households. B. Rebalance while maintaining current consumption growth rates: Consumption growth would remain at 3-4%, with investment contracting by 1-2% annually. This would lead to an average annual GDP growth rate of 1.5% over ten years. C. Rebalance with a sharp decline in consumption growth: If consumption growth drops to 1-2% annually, the investment must decline by nearly 3% annually, leading to flat GDP growth. D. Rebalance with a sharp contraction in GDP: This scenario involves a short-term, severe GDP contraction but is considered politically disruptive and unlikely. E. Rebalance over a much extended period: If China takes 15-20 years to rebalance, with consumption growth at 3-4% annually, GDP growth will drop to 2% and 2.5%, respectively. Key points include the limited ways China can rebalance, the difficulty in maintaining a high investment share indefinitely, and the necessity of a surge in consumption growth for a more balanced economy. Rebalancing will involve slower GDP growth without faster consumption growth, driven by significant and politically challenging income transfers. In conclusion, China's rebalancing process will require significant adjustments in its economic structure. The country must reduce its reliance on investment and increase the role of consumption in driving growth. However, the political constraints and the impact on various sectors of the economy make this a challenging task for policymakers. The five scenarios presented illustrate the complexities of the rebalancing process and emphasize the need for a well-thought-out and carefully executed strategy. China's future economic health depends on its ability to navigate these challenges and transition to a more sustainable growth model. Beijing must strike a delicate balance between addressing political constraints and implementing policies that promote consumption growth while minimizing the negative impacts on various sectors and local governments. Moreover, the global economy is intricately connected to China's growth trajectory. As China undertakes the rebalancing process, the repercussions will be felt in sectors reliant on Chinese investment and consumption. Businesses and governments worldwide must closely monitor the situation and adapt to these changes. This analysis highlights the importance of understanding the complexities of China's rebalancing process and its implications for the Chinese and global economies. As China grapples with these challenges, the world must brace itself for the changes arising from this monumental shift in the world's second-largest economy. Only time will tell if China's rebalancing efforts will successfully pave the way for a more stable and sustainable economic future.
CAPITALCOM:CN50
by BitcoinMacro
KWEBI believe, for sometime KWEB should take a pause for a brief time: 1) The current price is right at the resistance zone on the weekly chart ($31.xy to $32.nm) - We can see many times in the past the price has turned back from these levels. 2) 50 ema on weekly chart is right at the resistance, working as double resistance for the price move. 3) Dragon fly doji at the resistance means zone of strong supply. 4) The rally has been a swift and strong, now it is a few weeks old for next round of healthy run it should take a pause. Bull: 1) RSI is healthy. 2) A support is at $28-$29ish 3) Standard Deviation is higher than its previous peak and heading higher 4) Once the pause is over, next pause should be at around $38.50ish Conclusion: Overall view on KWEB is positive. In a short term the KWEB should take a pause, possibly fall a bit, before starting to run again. If the drama around possibility of US ban on Chinese stocks ends and the Zero COVID policy is lifted, then 2023 will be the year of Chinese Stocks. PS: I am new to analysis. So, do not forget to do your own research, make your own decision, you are responsible for your trades. I welcome inputs to improve my analysis. So, please share your knowledge and guide me.
AMEX:KWEB
by foolalgorithm
3
Hang Seng: Just do it 💪The chinese Index isn't kidding around when it comes to fulfilling those New Year's resolutions and is using all its power to climb all the way North. We're expecting the Hang Seng to rise further into the turquoise target zone to complete the red wave (3). After completion, the course should fall back into a correction in order to finish the red wave (3). In case the Hang Seng can't carry on with its recent upwards pulses, we're expecting it to drop below the support line at 18 917 points. This would indicate the activation of our alternative scenario with a chance of 27%.
HKEX:HSI1!
by MarketIntel
The SZSE Component Index 6/5/22The SZSE Component Index is an index of 500 stocks that are traded at the Shenzhen Stock Exchange (SZSE). It is the main stock market index of SZSE. Price reached Fib ( 0.618 ) Price reached Weekly FVG Good opportunity of long position. +41.5% if price reached first red line Good Luck Trader💯💯 . . . . . . 🧅Disclaimer :There are risks associated with investing in securities. Investing in stocks, bonds, exchange traded funds, mutual funds, and money market funds involve risk of loss. Loss of principal is possible. Some high risk investments may use leverage, which will accentuate gains & losses. Foreign investing involves special risks, including a greater volatility and political, economic and currency risks and differences in accounting methods. This is Not Financial Advice 🧅JUST AN OPINION OF THE ONION.🧅
SZSE:399001
by MLGONION
ALI BABA : SELL OR BUY ??The last time that the price was around 100 $ was at the IPO (2014) and then between AUG 2016- JAN 2017 TOTALL ASSET : IPO(2014) : 41.27 B 2016: 73.55 B 2017: 114.01 B 2020: 257.86 B 2021 :276.25 B (UNTIL Q3) GROSS PROFIT : IPO(2014) : 8.12 B 2016: 14.05 B 2017: 20.66 B 2020: 42.09 B 2021: Q1 + Q2 +Q3 =37.25 + Q4(9.03)(IF WE CONSIDER SAME AZ Q4 OF 2020) = 46.28 B P/E FORWARD = 7.40 !!! P/S =2.12 !!! P/CASH FLOW = 0.10 P/B = 1.79 RETURN ON ASSET = 3.86% QUICK RATIO = 1.65 DEBT / ASSET RATIO = .08 All these items show the prices are not permanent.
NYSE:BABALong
by aliahmadieng1362
WTF is Happening with Evergrande ???‼️💥Excerpt from Petition:" Source from Petition LLC "Shenzhen-based The Evergrande Group ($EGRNF) is China’s second largest property developer by sales and the 122nd largest developer in the world by revenue according to the 2021 Fortune Global 500 List.* While its core business is buying land and developing it into residential real estate, it is really an investment holding company that, in addition to property development, dabbles (or dabbled, as the case may be) in hotel operations, finance, internet businesses (for real estate and automobile sales), professional sports, theme parks, mineral water and health industry businesses. This sucker has had its tentacles in a lot of pots over the years, leveraging billionaire founder Xu Jiayin’s charisma and close contacts to the government to chase whatever the “it” thing of the moment was in Chinese spheres (i.e., electric cars).** It also happens to be levered to the tits. It also happens to be generally indebted to the tits. It also happens to be delinquent AF on a lot of those debts and deeply in trouble. And it is very much at the mercy of the Chinese government which, as of about a year ago, has been on a very public crusade to tamp down on over-leveraged private companies (implemented via “three red lines”*** meant to forestall a systemic crisis). Evergrande may very well be the poster child of the very type of company the Chinese government had in mind. Pundits are dubbing Evergrande’s emergent financial crisis China’s “Lehman” and the markets are flustered (the Dow closed down over 600 points after taking a 900+ point tumble yesterday afternoon after The Hang Seng got napalmed in afternoon trading with real estate giants like Henderson Land Development Co. ($HLDCY) getting hammered). Part II. The Extent of the Problem. Evergrande is a behemoth; it owes a smorgasbord of creditors including (i) banks, (ii) contractors doing the work, (iii) foreign bondholders, (iv) local investors (who often times also double as employees), and (v) homebuyers who paid in advance for (reportedly 1.6mm) new properties that Evergrande is apparently struggling to complete. At this point the question really ought to be ‘who doesn’t this company owe money to?’ The company has raised billions in debt from foreign investors (some of which trades as low as 20-30 cents on the dollar now) in addition to funds raised from over 80k retail investors to fund its construction projects across greater China. $7.4b in bond payments are due in 2022 alone and that’s after the company deals with $669mm in coupon payments through the end of ‘21 (including $615mm of that on the company’s dollar bonds). With amounts that staggering, the last thing creditors need to hear is some sort of inkling that the company may not be able to make near-term interest payments and otherwise appear creditworthy or, alternatively, that the Chinese government won’t bail the company out because it wants to teach over-levered corporates a lesson in financial responsibility. Indeed, interest payments due this week on certain of the company’s bank loans are not going to be made. This obviously calls into question whether the company will satisfy coupon payments of $83.5mm on September 23 and $45.17mm on September 29 on certain of its dollar-denominated notes. Given all of this, unsurprisingly, the company’s Hong Kong-traded shares have nosedived 90% in the past year and continued the rapid descent on Sunday going into Monday. Which only stands to reason. Last week Fitch — always late to the party — declared that default “appears probable” and Moody’s indicated that both cash and time are on short supply for Evergrande. S&P Global Ratings piled on (per Bankruptcy Data): The liquidity and funding access of China Evergrande Group are shrinking severely, as demonstrated by an announced material drop in sales, a fall in the cash balance and the continued use of physical properties to settle payments, according to S&P Global Ratings. The Company is negotiating repayment terms and two of its subsidiaries have failed to meet guarantee obligations on wealth management products to retail investors. The ratings agency believes the Company may not be able to service debt in time, which will lead to a default scenario including the possibility of debt restructuring. Therefore, on September 15, 2021, S&P Global downgraded Evergrande and its subsidiaries Hengda Real Estate Group Co. Ltd. and Tianji Holding Ltd. to CC from CCC and its long-term issue rating on the U.S. dollar notes issued by Evergrande and guaranteed by Tianji to C from CCC-. Such worsening parameters, coupled with the appointment of financial advisors to evaluate the Company's liquidity and explore solutions to ease the situation, imply that Evergrande's default scenario, which could include debt restructuring, is a virtual certainty, the ratings agency states. AllianceBernstein is saying Evergrande is in crisis, the effects of which might spillover into wider parts of the Chinese economy, creating a systemic problem. The markets on Monday appeared to buy into this thinking, relying on Evergrande to spark a long overdue market correction. All of this has a lot of people understandably afraid and extremely pissed off. III. Who Might Get F*cked? A. Depositors. Among them Evergrande’s customers. It’s hard to say exactly but it looks like Evergrande is pretty darn close to a straight-up Ponzi scheme. They collect pre-sale deposits for apartments and then use those deposits to accelerate construction on other homes that they then put up for sale and rinse, wash and repeat. This works, we suppose, when there’s demand. Lately demand has come crashing down in China thanks in large part to the government’s effort to wean the economy off of the corrupt real estate teat, significantly weakening a primary revenue stream. And potentially weakening the Chinese middle class. As indicated by those insane GDP figures above, real estate in China is like religion. Lots of those depositors hanging in the wind are people who put down deposits thinking their new apartments constituted a sound investment. As this writer notes: “All over China, salesclerks and factory workers are sitting on empty Evergrande apartments and dreaming of selling them at a big mark-up to fund their children’s study abroad or their own retirement.” 😬😬😬😬 B. Employees Apparently it’s pretty common in China for owners and employees of highly levered Chinese companies to buy “wealth management products” from said companies to help finance them when they’re in dire need. Indeed, Evergrande reportedly tapped into approximately 70 to 80 percent of its workforce back in April for large sums of money, threatening to withhold bonuses of employees who declined to provide Evergrande short-term loans. What happened next is unconscionable. Per the NYT: Some workers tapped their friends and family for money to lend to the company. Others borrowed from the bank. Then, this month, Evergrande suddenly stopped paying back the loans, which had been packaged as high-interest investments. Now, hundreds of employees have joined panicked home buyers in demanding their money back from Evergrande, gathering outside the company’s offices across China to protest last week. Whoops. Of course, each of these creditors should, in a fair world, be treated similarly but, of course, you have the extra bonus here of a bunch (six, actually) of scumbag senior Evergrande executives who, seeing the writing on the wall, secured redemptions of their investments. They got busted, however, and the company indicated that the funds would be returned and that those executives would be on the receiving end of some good ol’ fashioned Chinese retribution. Thoughts and prayers to those fools. C. Bondholders. A different kind of punishment may extend far and wide. If Evergrande fails, reverberations will be extensive. Per the NYT: Panic from investors and home buyers could spill over into the property market and hit prices, affecting household wealth and confidence. It could also shake global financial markets and make it harder for other Chinese companies to continue to finance their businesses with foreign investment. Writing in The Financial Times last week, the billionaire investor George Soros warned that an Evergrande default could cause China’s economy to crash. Soros wrote: Xi Jinping, China’s leader, has collided with economic reality. His crackdown on private enterprise has been a significant drag on the economy. The most vulnerable sector is real estate, particularly housing. China has enjoyed an extended property boom over the past two decades, but that is now coming to an end. Evergrande, the largest real estate company, is over-indebted and in danger of default. This could cause a crash. The signals are there. Chinese high yield is getting crushed. Construction operators are getting annihilated across the board. And the stress is spreading to banks and financials. Even some Chinese investment grade issuance is beginning to look shaky. Which is precisely why Ed Yardeni thinks that, ultimately, the Chinese government will be resigned to step in. There are signs that Beijing regulators are playing some ball: they’ve agreed to permit Evergrande to renegotiate payment deadlines with banks and other creditors in an attempt to sort through this hot mess. Some banks are accommodating. Per Bloomberg: China Minsheng Banking Corp., China Zheshang Bank Co. and Shanghai Pudong Development Bank Co. had agreed to give Evergrande extensions on some project loans. Citic Trust, one of the developer’s biggest non-bank lenders, has given preliminary approval to a three-month extension on loans that were due in August, a person familiar with the matter said. And there are additional signs that the government is growing concerned: late last week it infused $14b of short-term cash into its banking system. But what if, beyond this small level of initial latitude, the Chinese government doesn’t intervene? Bondholders are reportedly scrambling to hedge their positions but failing to do so; they’re apparently beginning to realize that this whole situation may turn into the Hunger Games. Also per Bloomberg: Investors in China Evergrande Group’s bonds are struggling to find a hedge to cushion their losses as the troubled real estate giant nears what could be one of China’s biggest debt restructurings. Banks’ trading desks are reluctant to offer hedging tools after some of them suffered losses earlier in the year, and due to the sparse trading of Evergrande’s CDS, according to people familiar with the matter who were not authorized to speak publicly about the matter. Owners of Evergrande’s $19 billion in dollar bonds are currently watching their investment shrivel as they wait to find out if Beijing will step in to halt its downward spiral. For money managers used to relying on the $10 trillion swaps market to hedge downside risks, it’s an extraordinary situation. Also per Bloomberg: China Evergrande Group may undergo one of the country’s biggest-ever debt restructurings, if the developer’s distressed-level bond prices are any indication. It’s “almost unavoidable,” said Nomura International Hong Kong Ltd. credit analyst Iris Chen. Her base case is a government-supervised deal that ensures Evergrande delivers homes and pays suppliers, where dollar debt investors would get 25% of their money back. Luther Chai, a senior research analyst at CreditSights Singapore LLC, also predicts Evergrande may default and enter restructuring. That risk is being priced in, with many of Evergrande’s dollar bonds trading near 30 cents. Others are casting a similarly pessimistic outlook: Evergrande restructures its debt and bondholders recover a portion of their funds. This would be an “orderly wind down,” says Omotunde Lawal, head of Barings LLC’s emerging-market corporate debt group. There may be some contagion across China’s property issuers at first, according to Nomura’s Chen, though sentiment would improve as a key overhang would be removed. She expects only a 5% recovery rate for investors in Evergrande unit Scenery Journey Ltd. Annnnd others are evaluating the doomsday scenario: Liquidation is a scenario where bondholders may get close to nothing. This is unlikely, says CreditSights’s Chai, because it would “wreak havoc across China’s property and banking sectors, as well as related companies such as Evergrande’s suppliers.” Morgan Stanley analysts say “all parties are incentivized to avoid a liquidation scenario” in the restructuring of any Chinese property developer. Chairman Hui Ka Yan, who controls more than 70% of Evergrande’s equity -- would lose a significant portion of his wealth. Another negative scenario would involve Evergrande bringing some of its off-balance sheet debt -- which may include pledged assets -- back into the books, according to Nomura’s Chen. These assets could have priority over the dollar bonds in a recovery and if the off-balance sheet debt is higher than expected, bondholders could get less than 15% of their money back. And still others are trying to be sanguine: A complete or partial takeover by a state-owned enterprise is another possibility, though Nomura’s Chen assigns a low probability to this scenario. Evergrande could also sell its listed assets at better prices if market conditions improve, says Chen, which she predicts would give bondholders a recovery rate of 30% or more. Evergrande could buy some time to improve its liquidity over the next year, according to Chai at CreditSights. In this scenario, Evergrande would repay some of its nearest-term dollar bonds upon maturity. The developer has two sizeable dollar bonds due over the next 12 months, or a combined $3.5 billion to pay. Whatever. Any which way you slice it… That’s right. The company’s most active dollar-denominated bonds — the 8.75% notes due in June 2025 — have freefalled from 84 cents at the end of May to 31 cents late last week. Similarly, the shortest-maturity bonds — due in March ‘22 — are down to 35 cents on the dollar from 99.6 cents at the end of May. The company has hired restructuring advisors: Houlihan Lokey Inc. ($HLI) and Admiralty Harbour Capital. In turn, certain bondholders have reportedly hired Kirkland & Ellis LLP and Moelis & Co. ($MC). No doubt other firms will be getting calls. Per Bloomberg: With 13 outstanding dollar bonds, including one note touted as one of the most widely traded in the world, and a diverse group of bondholders globally, getting organized is going to be tricky. Especially as funds trade in and out of the paper. Per Bloomberg: Saba Capital Management, Redwood Capital Management, Contrarian Capital Management and Silver Point Capital are among funds that have built positions in offshore bonds of China Evergrande Group’s ahead of a likely default of the real estate giant. The four investors are among the credit funds that took a position in Evergrande’s $19 billion dollar-denominated notes in recent weeks, as prices fell to about 25% of face value amid uncertainties over the future of China’s second largest developer, according to people with knowledge of the matter who asked not to be identified because the transactions are private. You know the old saying: one company’s crisis is a lot of vulture funds’ opportunity. Anyway, there very well may be quite a bit of asymmetric upside when you’re buying in at 25 cents on the dollar but Johnny seems to remember a time when buyside shops were VERY skittish about political risk enveloping foreign credits. But what’s a little political risk when you’ve got money to deploy and not many other distressed opportunities to play in? YOLO b*tches! 🤷‍♀️ D. Commodities Take a look at prices for steel and copper on TradingView , among other things, and it’s ugly AF. There was the largest drop in steel output ever in August. Take a look at these charts: E. The Chinese Consumer & American Companies Catering Thereto Evergrande directly and indirectly contributes approximately 3.8mm jobs. It’s employees and suppliers are now potential victims of Evergrande’s predicament. As the government cracks down on various industries and Evergrande wavers, the consumer is getting a bit flustered. Retail sales recently dropped 11% off trend and all indicators reflect sluggish consumer confidence. This could end up affecting large US companies with China dependency. Maybe this is the reason why Apple Inc. ($AAPL) is 10% off its recently set ATH — a reason that doesn’t entirely have to do with an underwhelming product launch or misunderstood injunction. It’s unclear. The state will likely extract enough flesh to make sure Chinese bank loans are safe. Contractors likely have security by way of mechanic’s liens and the like. But then there are the bondholders, investors and employees. Things could get ugly for them. In the meantime, Evergrande will likely flood the market with existing property assets, and look to engage in a tremendous amount of liability management across double-digit debt issuances. It could explore selling more equity (LOL…ain’t gonna happen — especially after recent equity issuances have tanked). Or declare bankruptcy. Or…OR…get a bail out. It’s all exasperating. What’s odd is that this has all been out there for over a year. From Fortune: “It’s a confus world when equity markets are generally within a couple percent or so of their record highs whilst we’re seeing the biggest dollar-Asian-high-yield company, Evergrande, with $300 billion of liabilities, on the brink, with no-one really aware of how the work-out will be managed and whether be contagion,” writes Jim Reid, Head of Global Fundamental Credit Strategy at Deutsche Bank, this morning in a markets note. Perhaps everyone was distracted by a deadly pandemic. This is a situation that we — along with the rest of the market — will be watching very closely. F. Postscript Is there a crypto component to all of this? This thread ⬇️ suggests there very well may be. This is something we’ll also be keeping an eye out for. Points to Ponder😬🤔 *In 2018, Evergrande’s stock price made the company the world’s most valuable real estate company. **Notably, as part of it a deleveraging sparked by a Chinese government crackdown on over leverage, the company has been divesting of non-core businesses of late. Mr. Jiayin recently stepped down as chairman of the property group; he was, before all of this transpired, roughly the 53rd richest person in the world. ***The three red lines include: (i) Liability-to-asset ratio (excluding advance receipts) of less than 70%, (ii) Net gearing ratio of less than 100%, and (iii) Cash-to-short-term debt ratio of more than 1x. If the developers fail to meet one, two, or all of the ‘three red lines’, regulators would then place limits on the extent to which they can grow debt. ****And there’s a lot of questions as to whether this is even the right number given JV partnerships that Evergrande is part of that may carry debt off balance sheet. 📚Resources📚 We have compiled a list of a$$-kicking resources on the topics of restructuring, tech, finance, investing, and disruption. 💥You can find it here💥. We’ve recently updated the list to include some new releases such as “Damsel in Distressed: My Life in the Golden Age of Hedge Funds” by Dominique Mielle (formerly of Canyon Partners) and “The Platform Delusion: Who Wins and Who Loses in the Age of Tech Titans” by Jonathan Knee. We haven’t read either yet but they both certainly look interesting.
OTC:EGRNFLong
by wallstreetsharks
2
Forget Amazon. Chinese ecommerce sellers are taking on the worldCEO of ecommerce SaaS company says global platforms are actively courting Chinese sellers. If there's anyone who can explain how Chinese ecommerce sellers have become so successful on Amazon, it's Zhang Jie. The 38-year-old Shanghai-based entrepreneur became an eBay vendor in 2004 and was one of the first Chinese people to explore overseas ecommerce markets. Today, he has a different position in the industry: The company he founded in 2010, Mabang, offers enterprise resource planning software to many Chinese cross-border ecommerce vendors. Zhang coaches them at every step of the overseas sales process, from selecting ecommerce platforms to deciding what products to sell to improving management structure. Clients range from some of China's most successful domestic consumer brands in recent years (Perfect Diary, Florasis and Xtep) to those brands that sell like hotcakes on Amazon whose names no one can remember. ("You wouldn't recognize it if I told you the name of the company or the owner," Zhang said.)
NASDAQ:AAPL
by Daniel_Hernandez_
USDCNH BULLISHA lot can be expected between the US dollar and the Chinese Yuan in the next coming days / weeks. I think history has the best story to tell and here, I share my overall trends in which the USDCNH has been trading. The U.S. dollar greatly depreciated against the Chinese Yuan and created a pin bar on its all time ascending support I think we could potentially see a strong dollar against the Yuan in the next coming days. Please leave a like to show your support 🤗. Thank you
Long
by Timgucci
2
BEGIN NEXT WEEK DOWN - TRIP.COM GROUP LTD - 30MNWe observed a strong selling signal just before the exit of the trade. The suppor t is still very strong but we noticed a second possible support if the market decides to break the first black line. Possibility of formation or larger candlesticks with huge volumes indicating a significant change. Possibility , therefore, of generating profits in the short direction. Next: Be ready from Monday opening session ... if you miss it try to not miss out on the last third of the day in which investors are very dynamic in this market. Have a good weekend and enjoy!
NASDAQ:TCOMShort
by Diallo_Charts_Ideas
Week results - between Brexit the NFPThe main event of the previous week was not a meeting of the Bank of England or even a decision of the Fed (both the Central Banks left monetary policy parameters unchanged). This is not data on US GDP (annual growth rates have been the weakest since 2016: 2.3% in 2019 compared to 2.9% in 2018), but the coronavirus epidemic in China. Yes, so far the epidemic has been localized in China. But this is not easier. The magnitude of the coronavirus epidemic has already exceeded the 2003 SARS. And the World Health Organization declared the outbreak of coronavirus a global emergency. So last week, the markets were busy on the one hand counting the victims of the epidemic (more than 300 deaths and more than 15,000 cases), and on the other hand, counting the economic damage. China extended the New Year weekend for another week. That is, another week 2/3 of the Chinese economy will be closed. The magnitude of the losses is not yet clear, as the epidemic continues, but it is already clear that we are talking about tens of billions of dollars. The chances of China's GDP growth rate dropping below 6% now seem almost 100%. So the fears and concerns of the global recession have intensified. The Chinese stock market today is trading in a deep minus (about -8%) despite all the efforts of the Government and the Central Bank. Despite such a regrettable situation, trading is an opportunity that can and should be taken advantage of. For the long-term, it is worth selling in super bought stock markets, but in the medium-term and locally, the purchase of safe-haven assets (gold and the Japanese yen) and the sale of risky assets such as the Russian ruble look great. Actually, we voiced this plan last week, but as the epidemic grows, the relevance of our positions only grows. Another significant event of the past week was Brexit. On January 31, Great Britain officially left the EU. We already wrote that buying pounds remains one of the best trading opportunities at FOREX in terms of potential in 2020. Whether it is implemented or not will show the progress of trade negotiations between the UK and the EU. But if successful, a pound above 1.40 could very well become a reality. The upcoming week will be saturated with various kinds of macroeconomic statistics. But the main attention will still be focused on Friday statistics on the US labor market and NFP figures. Our thoughts and forecasts on this subject will be described closer to Friday. In the meantime, we continue to monitor the development of the epidemic and investor sentiment.
FOREXCOM:XAUUSDLong
by Trade24Fx
2