YZJ Fin Hldg    Last:0.225   -

YZJFH - potentially rewarding

Yes, shares cancellation will boost Nav per share permanently up. The current boosting up of Nav per shares is still not " permanent" as the coy can release the treasury shares for corporate actions such as M& A ... etc, which again will dilute the Nav down to the amount of shares being used.

The SG Company Aat has stipulated that Treasury shares must not exceed 10% of the Coy float at all time. Hence, in order to renew the SBB once the current 395m SBB is max out, YFH will need to cancel shares, in part or in full, in order to restore the SBB. So Yes, I am also expecting YFH to cancel shares in due course. 

No, the current Nav as of today will be based on the latest known 3691m shares o/s, not 3955m, or 3937m that YFH used to derived the Nav 1.0745 in the 1H2022 report.. For the 3Q reporting, the Nav 1.0923 quoted must be referenced to 3744m o/s as at 30Sep2022, else all the numbers quoted in the 3Q report will be garbage.

The SBB 206m shares as at 30Sep2022 had boosted up but RMB devaluation and the NPL provision had almost wiped off the gain. It was the positive 3Q NPAT that lifted the Nav up to 1.0923.

The Nav per shares has improved from 1.0745 to 1.0923 due to a lower 3691m o/s, BUT the absolute dollar value of the Net Asset as reflected in the Balance Sheet has actually reduced from $4230m as at 1H2022 to $4089m as at 30Sep2022.
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sgng123      ( Date: 08-Dec-2022 18:19) Posted: Patience difficult to make fast buck u lose more than u win. let see if Ren YL make his move since he make it clear in Nov edge report he not happy abt the stock price. Big move by him would move the stock as shortlist exit, best if YZJFH cancel treasury stocks which guarantee improvement to NTA etc., effectively diluting small investors and boosting Ren . Currently NTA still calculated on 3955 so in fact YZJFH aum grows in 3q lol 1.07 to 1.09.

 

Patience difficult to make fast buck u lose more than u win.
let see if Ren YL make his move since he make it clear in Nov edge report he not happy abt the stock price.
Big move by him would move the stock as shortlist exit, best if YZJFH cancel treasury stocks which guarantee improvement to NTA etc., effectively diluting small investors and boosting Ren .
Currently NTA still calculated on 3955 so in fact YZJFH aum grows in 3q lol 1.07 to 1.09.

 

If retail share holders oneday make profit from YZJFH, we must thank firstly the Mgt generosity, secondly our tenancy and thirdly China mkt condition improvement. Now what we can do is nothing, just wait passively. Hope we are in the care of good hands. Luck plays an important part....

 

No, treasury shares are not entitled to voting rights and dividends regardless if they are cancelled, according to the SG Company Act.

sgng123      ( Date: 08-Dec-2022 17:49) Posted: They still using 3955m to calculate as treasury stocks only lose right to vote and no dividend received. only when they cancel the treasury stocks through SGX announcement and burn 99mil in progress, then 3690mil used. It consider cheap as SSB buyback at heavy discount . It might be in progress to cancel it as there a SGX news in Oct highlight Ren stake go up as a result of SSB. Cancel 250+mil stocks would it drive up stock price compared to 100m stake reduction by t Rowe which caused a 20% slide? volvo125      ( Date: 08-Dec-2022 16:15) Posted:   I would like to reiterate here that, if the latest Nav 1.0923 stated by YFH is referenced to 3744m o/s as at 30Sep2022 ( ie, not the old 3937m as at 30Jun2022, or 3951m that CIMB was still strangely using, or the latest 3691m that was last registered as on 31Oct2022 ), which I think it should unless the CFO LiuHua or CEO Toe were dumb enough to overlook the mistake, then this Nav could be crudely reverse engineered with the 3Q RMB devaluation against SGD + new NPL provisions to give a 3Q NPAT $61m. @emailpeter had made a crude 4Q NPAT projection of $55m with a haircut assumption using 3Q $61m as reference, noting on the loss of income on the affected NPL 777m portion. FY22 NPAT was projected at $252m, higher than YFH/CIMB prevailing guided NPAT $220m.    I think the projection is reasonable, provided 1) the nav  1.09223@3744m  o/s is indeed valid, 2) no more new and huge provision from the NPL. @emailpeter estimated the dividend payout using a 90% SBB assumption, which was also what I did earlier before the SBB was abruptly stopped on 31oct2022. I tend to have a different view now. Treasury shares are excluded from EPS and DPS so EPS and DPS will increase accordingly. However, I am not sure when is the cut off point now because FY22 result is contingent on 31Dec2022 where EPS will be declared based on the shares o/s as at 31Dec2022. YFH may continue to SBB until 1 month before FY22 release in mid~late Feb or early Mar, and then SBB again until AGM as long as the max is still not reached. Book close for dividend payout is in mid~late Apr. The shares o/s as at 31Dec2022 and Book close in Apr2023 are very different. I tend to think now that the cut off to determine the shares o/s for dividend payouts is likely set at 31Dec2022. Since YFH has not rebooted SBB for unkown reason(s) after releasing the 3Q, I would now conservatively assume no more SBB until probably the commencement of Jan 2023. I would use 3691m o/s or 66% SBB as the cut off for dividend payout. EPS = $252m / 3691 = 0.0683 DPS = 0.6827 * 0.40 = $0.0273, rounded off to $0.027. At current price ~0.34, yield = 7.9% Now, if we assume a very bad scenario such that  there are more nasty huge NPL provisions to add such that YFH just breakeven in 4Q, then FY22 NPAT would be 136m + 61m = $197m EPS = $197 / 3691 = 0.0534 DPS = 0.0534 * 0.4 = 0.0213, rounded off to $0.021 At current price ~0.34, yield = 6.2% And further, if we are even more conserative, we can take a 50% cut on the re-engineered 3Q NPAT 61m. EPS = [ 136 + ( 61 * 0.5 ) ] / 3691 = 0.0451 DPS = 0.0451 * 0.4 = 0.018 At current price ~0.34, yield = 5.3% So you could be looking at a DPS of between 0.18 to 0.27.  Again, I would like to reiterate here one more time that if the stated Nav 1.0923 by YFH is validly referenced to 3744m o/s, then I think DPS 0.27 is a reasonable expectation.

 

Dividend min 40% not at 40%, depending on Ren YL mood he might decide to give higher dividend to compensate investors for the decline in price.

volvo125      ( Date: 08-Dec-2022 16:15) Posted:   I would like to reiterate here that, if the latest Nav 1.0923 stated by YFH is referenced to 3744m o/s as at 30Sep2022 ( ie, not the old 3937m as at 30Jun2022, or 3951m that CIMB was still strangely using, or the latest 3691m that was last registered as on 31Oct2022 ), which I think it should unless the CFO LiuHua or CEO Toe were dumb enough to overlook the mistake, then this Nav could be crudely reverse engineered with the 3Q RMB devaluation against SGD + new NPL provisions to give a 3Q NPAT $61m. @emailpeter had made a crude 4Q NPAT projection of $55m with a haircut assumption using 3Q $61m as reference, noting on the loss of income on the affected NPL 777m portion. FY22 NPAT was projected at $252m, higher than YFH/CIMB prevailing guided NPAT $220m.    I think the projection is reasonable, provided 1) the nav  1.09223@3744m  o/s is indeed valid, 2) no more new and huge provision from the NPL. @emailpeter estimated the dividend payout using a 90% SBB assumption, which was also what I did earlier before the SBB was abruptly stopped on 31oct2022. I tend to have a different view now. Treasury shares are excluded from EPS and DPS so EPS and DPS will increase accordingly. However, I am not sure when is the cut off point now because FY22 result is contingent on 31Dec2022 where EPS will be declared based on the shares o/s as at 31Dec2022. YFH may continue to SBB until 1 month before FY22 release in mid~late Feb or early Mar, and then SBB again until AGM as long as the max is still not reached. Book close for dividend payout is in mid~late Apr. The shares o/s as at 31Dec2022 and Book close in Apr2023 are very different. I tend to think now that the cut off to determine the shares o/s for dividend payouts is likely set at 31Dec2022. Since YFH has not rebooted SBB for unkown reason(s) after releasing the 3Q, I would now conservatively assume no more SBB until probably the commencement of Jan 2023. I would use 3691m o/s or 66% SBB as the cut off for dividend payout. EPS = $252m / 3691 = 0.0683 DPS = 0.6827 * 0.40 = $0.0273, rounded off to $0.027. At current price ~0.34, yield = 7.9% Now, if we assume a very bad scenario such that  there are more nasty huge NPL provisions to add such that YFH just breakeven in 4Q, then FY22 NPAT would be 136m + 61m = $197m EPS = $197 / 3691 = 0.0534 DPS = 0.0534 * 0.4 = 0.0213, rounded off to $0.021 At current price ~0.34, yield = 6.2% And further, if we are even more conserative, we can take a 50% cut on the re-engineered 3Q NPAT 61m. EPS = [ 136 + ( 61 * 0.5 ) ] / 3691 = 0.0451 DPS = 0.0451 * 0.4 = 0.018 At current price ~0.34, yield = 5.3% So you could be looking at a DPS of between 0.18 to 0.27.  Again, I would like to reiterate here one more time that if the stated Nav 1.0923 by YFH is validly referenced to 3744m o/s, then I think DPS 0.27 is a reasonable expectation. UMIST13      ( Date: 08-Dec-2022 12:11) Posted: Hello Volvo , thanks for the good analysis. So what is the expected dividend ? Thanks

 

They still using 3955m to calculate as treasury stocks only lose right to vote and no dividend received.
only when they cancel the treasury stocks through SGX announcement and burn 99mil in progress, then 3690mil used.
It consider cheap as SSB buyback at heavy discount .
It might be in progress to cancel it as there a SGX news in Oct highlight Ren stake go up as a result of SSB.
Cancel 250+mil stocks would it drive up stock price compared to 100m stake reduction by t Rowe which caused a 20% slide?

volvo125      ( Date: 08-Dec-2022 16:15) Posted:   I would like to reiterate here that, if the latest Nav 1.0923 stated by YFH is referenced to 3744m o/s as at 30Sep2022 ( ie, not the old 3937m as at 30Jun2022, or 3951m that CIMB was still strangely using, or the latest 3691m that was last registered as on 31Oct2022 ), which I think it should unless the CFO LiuHua or CEO Toe were dumb enough to overlook the mistake, then this Nav could be crudely reverse engineered with the 3Q RMB devaluation against SGD + new NPL provisions to give a 3Q NPAT $61m. @emailpeter had made a crude 4Q NPAT projection of $55m with a haircut assumption using 3Q $61m as reference, noting on the loss of income on the affected NPL 777m portion. FY22 NPAT was projected at $252m, higher than YFH/CIMB prevailing guided NPAT $220m.    I think the projection is reasonable, provided 1) the nav  1.09223@3744m  o/s is indeed valid, 2) no more new and huge provision from the NPL. @emailpeter estimated the dividend payout using a 90% SBB assumption, which was also what I did earlier before the SBB was abruptly stopped on 31oct2022. I tend to have a different view now. Treasury shares are excluded from EPS and DPS so EPS and DPS will increase accordingly. However, I am not sure when is the cut off point now because FY22 result is contingent on 31Dec2022 where EPS will be declared based on the shares o/s as at 31Dec2022. YFH may continue to SBB until 1 month before FY22 release in mid~late Feb or early Mar, and then SBB again until AGM as long as the max is still not reached. Book close for dividend payout is in mid~late Apr. The shares o/s as at 31Dec2022 and Book close in Apr2023 are very different. I tend to think now that the cut off to determine the shares o/s for dividend payouts is likely set at 31Dec2022. Since YFH has not rebooted SBB for unkown reason(s) after releasing the 3Q, I would now conservatively assume no more SBB until probably the commencement of Jan 2023. I would use 3691m o/s or 66% SBB as the cut off for dividend payout. EPS = $252m / 3691 = 0.0683 DPS = 0.6827 * 0.40 = $0.0273, rounded off to $0.027. At current price ~0.34, yield = 7.9% Now, if we assume a very bad scenario such that  there are more nasty huge NPL provisions to add such that YFH just breakeven in 4Q, then FY22 NPAT would be 136m + 61m = $197m EPS = $197 / 3691 = 0.0534 DPS = 0.0534 * 0.4 = 0.0213, rounded off to $0.021 At current price ~0.34, yield = 6.2% And further, if we are even more conserative, we can take a 50% cut on the re-engineered 3Q NPAT 61m. EPS = [ 136 + ( 61 * 0.5 ) ] / 3691 = 0.0451 DPS = 0.0451 * 0.4 = 0.018 At current price ~0.34, yield = 5.3% So you could be looking at a DPS of between 0.18 to 0.27.  Again, I would like to reiterate here one more time that if the stated Nav 1.0923 by YFH is validly referenced to 3744m o/s, then I think DPS 0.27 is a reasonable expectation. UMIST13      ( Date: 08-Dec-2022 12:11) Posted: Hello Volvo , thanks for the good analysis. So what is the expected dividend ? Thanks

 

That why Ren YL might make offer to absorb both hedge funds stake, effectively removing shorting activities on stock.
When they don had stake in company, they basically exit hedging since cost of financing would shoot up next year due to higher rate. Investors would demand 2-3x stock borrowed rate as fixed deposit jumped by same amt in 2022.
See if YZJFH would cancel 250+mil treasury stock to improve financial ratio.
Burning 99mil to push up stock price let see if they got the resolve.
Need full year result next year to check if T.rowes exit since they don report any more.

volvo125      ( Date: 08-Dec-2022 03:51) Posted: Correction : I noticed an update from Vanguard on 31oct in simplywall.st at 97m. The previous update was in 31aug at 95m, so Vanguard actually bought 2m more in Oct. Vanguard is still in. TR sold down from 295m to 194m from early Jun to mid Jul, effectively removed themselves as SSH and no longer need to report to sgx on their further transactions. I read this massive parring down wirhin a short time an intention to exit. The 295m down to 194m selling wave had hammered the price ~20% down from 0.50+ to 0.40, and the selldown continued (likely with the balance 194m on a major basis or in full) and ended in mid Aug at 0.35. sgng123      ( Date: 08-Dec-2022 02:24) Posted: Don think the hedge fund exit yet, if u check daily transaction there always only 1-2 big sellers, real sell or short I guess the latter. Those that want to sell already did so in June when SSB announced. Current down trend was being engineering by hedge funds to force transparency on the debt investment. Once they satisfied , they would cover their long short.  Chinese companies always have owners owning more than 50% if they not in STI component index. The funny thing is everyday where got so many sellers and alway concentrated on a few big trade. The q on both side also fake, any  push either the rest of bid give way . take for example there 8000 bid 8000sell, 1000 buy came in rest of 7k cave in and move to next higher bid. Only need 1000 to move the needle not the fake q u see. It risky if 1 big buyer came and gobble everything on 10000 block, can lose lot of money if shorting. YZJFH classic example of hedging activities, BB forcing down stock price to force management to move in their direction. By the way hedge fund can short for very long period of time on borrowed stock till requested to return it. Very craze on YZJFH as it got more cash than what stock price reflect with zero liabilities. Anyway SSB not on today so maybe another news incoming this week.

 

UMIST13      ( Date: 08-Dec-2022 12:11) Posted: Hello Volvo , thanks for the good analysis. So what is the expected dividend ? Thanks

 

I am really curious now as to when SBBs will resume given the latest string of announcements. Hope they are holding back as the Company perhaps may have found some higher ROI opportunities and deployed capital accordingly. Alternatively, hoping that they are not conducting additional SBBs as further material announcements or new developments are in the works. They may possibly have stopped just to outright conserve cash amid the market conditions and exposure to China. Could be anyone' s guess.   

 

Hello Volvo ,

thanks for the good analysis. So what is the expected dividend ?

Thanks

 

Correction : I noticed an update from Vanguard on 31oct in simplywall.st at 97m. The previous update was in 31aug at 95m, so Vanguard actually bought 2m more in Oct. Vanguard is still in. TR sold down from 295m to 194m from early Jun to mid Jul, effectively removed themselves as SSH and no longer need to report to sgx on their further transactions. I read this massive parring down wirhin a short time an intention to exit. The 295m down to 194m selling wave had hammered the price ~20% down from 0.50+ to 0.40, and the selldown continued (likely with the balance 194m on a major basis or in full) and ended in mid Aug at 0.35.

sgng123      ( Date: 08-Dec-2022 02:24) Posted: Don think the hedge fund exit yet, if u check daily transaction there always only 1-2 big sellers, real sell or short I guess the latter. Those that want to sell already did so in June when SSB announced. Current down trend was being engineering by hedge funds to force transparency on the debt investment. Once they satisfied , they would cover their long short.  Chinese companies always have owners owning more than 50% if they not in STI component index. The funny thing is everyday where got so many sellers and alway concentrated on a few big trade. The q on both side also fake, any  push either the rest of bid give way . take for example there 8000 bid 8000sell, 1000 buy came in rest of 7k cave in and move to next higher bid. Only need 1000 to move the needle not the fake q u see. It risky if 1 big buyer came and gobble everything on 10000 block, can lose lot of money if shorting. YZJFH classic example of hedging activities, BB forcing down stock price to force management to move in their direction. By the way hedge fund can short for very long period of time on borrowed stock till requested to return it. Very craze on YZJFH as it got more cash than what stock price reflect with zero liabilities. Anyway SSB not on today so maybe another news incoming this week.

 

Don think the hedge fund exit yet, if u check daily transaction there always only 1-2 big sellers, real sell or short I guess the latter. Those that want to sell already did so in June when SSB announced.
Current down trend was being engineering by hedge funds to force transparency on the debt investment.
Once they satisfied , they would cover their long short. 
Chinese companies always have owners owning more than 50% if they not in STI component index.
The funny thing is everyday where got so many sellers and alway concentrated on a few big trade.
The q on both side also fake, any  push either the rest of bid give way .
take for example there 8000 bid 8000sell, 1000 buy came in rest of 7k cave in and move to next higher bid.
Only need 1000 to move the needle not the fake q u see.
It risky if 1 big buyer came and gobble everything on 10000 block, can lose lot of money if shorting.
YZJFH classic example of hedging activities, BB forcing down stock price to force management to move in their direction.
By the way hedge fund can short for very long period of time on borrowed stock till requested to return it.
Very craze on YZJFH as it got more cash than what stock price reflect with zero liabilities.
Anyway SSB not on today so maybe another news incoming this week.

 

Yes, agreed with your thoughts..Thanks vm indeed...for sharing....

volvo125      ( Date: 08-Dec-2022 00:22) Posted: If you check the YFH chart closely, you will see 2 very major selldown phase that are both persistent and violent. The first wave was a bigger wave that started in mid Jun and then ended in mid Aug with a euphoric 1st all time low at 0.35. This was the TR 295m dumping wave that shorties were also riding along. The second wave was a smaller wave but much more violent because the earlier TR295m dumping had left a lot of excess supply pressure. This was the Vanguard93m dumping wave and shorties were taking the full advantage of Vanguard dumping momentum plus the still lingering excess supply pressure left over by TR295m. This wave started in end Sep and ended in late Oct with another euphoric 2nd all time low at 0.31.  I believe TR and Vanguard had already fully exited YFH during the past months capital flight wave due to the accelerating appreciation of USD. As for RenYL, I believe his shares purchase would also likely be symbolic and as a gesture to instill confidence and nothing more, just like Toe, Sutat, Chua and ICH. RenYL certainly knows SGX very well in terms of the many listco low valuations (YZJ was certainly one them bullied by shortists prior to the spin off), low liquidity, .... etc. But he still chose to list YFH in SG. And he was careful to stay well below the 30% holding in both YZJ and YFH. I believe his choice to list both YZJ and YFH in SG are strategic in nature as both coy would likely get far much better valuations and liquidity in SH, SZ or HK exchange. He is also unlikely to take YFH private, not just the massive amount of funds he needs to top up his 23% to 30% and then mounting a further massive LBO to takeover, being a newly privatised Chinese asset coy will immediately cut off all his offshore expansion plan. His assets will be locked up in China, which is probably not what he wants. You have a point in speculating that borrowers were holding off paying interests due to the covid uncertainty. So the progressive loosenig of covid restrictions and controls might improve the NPL situation ..... sgng123      ( Date: 07-Dec-2022 22:17) Posted: Not much time for people to buy low, old Ren most likely would act and significant increase his stake. buying over T.Rowe price ass and vanguard group stake combine 4.9% + 2% would remove hedging activities by these 2 hedge fund. Volume would drop while share buyback would had bigger impact on stock price. Just check other china based stock , the trade volume very low and only need 2-3m transaction to move 5%. Anyway the increased NPL not much concern as china borrower hold off paying interest due to zero COVID uncertainty. China earlier put out new measures to minimise lockdown and testing . Reason why YZJFH scoop so low all thks to T Rowe and vanguard hedging activities.

 

If you check the YFH chart closely, you will see 2 very major selldown phase that are both persistent and violent. The first wave was a bigger wave that started in mid Jun and then ended in mid Aug with a euphoric 1st all time low at 0.35. This was the TR 295m dumping wave that shorties were also riding along. The second wave was a smaller wave but much more violent because the earlier TR295m dumping had left a lot of excess supply pressure. This was the Vanguard93m dumping wave and shorties were taking the full advantage of Vanguard dumping momentum plus the still lingering excess supply pressure left over by TR295m. This wave started in end Sep and ended in late Oct with another euphoric 2nd all time low at 0.31. 

I believe TR and Vanguard had already fully exited YFH during the past months capital flight wave due to the accelerating appreciation of USD.

As for RenYL, I believe his shares purchase would also likely be symbolic and as a gesture to instill confidence and nothing more, just like Toe, Sutat, Chua and ICH.

RenYL certainly knows SGX very well in terms of the many listco low valuations (YZJ was certainly one them bullied by shortists prior to the spin off), low liquidity, .... etc. But he still chose to list YFH in SG. And he was careful to stay well below the 30% holding in both YZJ and YFH. I believe his choice to list both YZJ and YFH in SG are strategic in nature as both coy would likely get far much better valuations and liquidity in SH, SZ or HK exchange. He is also unlikely to take YFH private, not just the massive amount of funds he needs to top up his 23% to 30% and then mounting a further massive LBO to takeover, being a newly privatised Chinese asset coy will immediately cut off all his offshore expansion plan. His assets will be locked up in China, which is probably not what he wants.

You have a point in speculating that borrowers were holding off paying interests due to the covid uncertainty. So the progressive loosenig of covid restrictions and controls might improve the NPL situation .....

sgng123      ( Date: 07-Dec-2022 22:17) Posted: Not much time for people to buy low, old Ren most likely would act and significant increase his stake. buying over T.Rowe price ass and vanguard group stake combine 4.9% + 2% would remove hedging activities by these 2 hedge fund. Volume would drop while share buyback would had bigger impact on stock price. Just check other china based stock , the trade volume very low and only need 2-3m transaction to move 5%. Anyway the increased NPL not much concern as china borrower hold off paying interest due to zero COVID uncertainty. China earlier put out new measures to minimise lockdown and testing . Reason why YZJFH scoop so low all thks to T Rowe and vanguard hedging activities.

 

Put in fixed deposit better, next year 12mth guarantee 4%. YZJFH if got holding power, wait for potential upside after china lift COVID restrictions.
stock market not so good compared to fixed deposit as low return high risk.
Chinese based stocks to bet  for post COVID surge, after that world economy in slow growth mode.

 

Stock investment is a bit like World Cup betting and YZJFH now appears to be the underdog - so if you bet on damn the returns may be very juicy but don' t put all your bets in only one team

 

Not much time for people to buy low, old Ren most likely would act and significant increase his stake.
buying over T.Rowe price ass and vanguard group stake combine 4.9% + 2% would remove hedging activities by these 2 hedge fund.
Volume would drop while share buyback would had bigger impact on stock price.
Just check other china based stock , the trade volume very low and only need 2-3m transaction to move 5%.
Anyway the increased NPL not much concern as china borrower hold off paying interest due to zero COVID uncertainty.
China earlier put out new measures to minimise lockdown and testing .
Reason why YZJFH scoop so low all thks to T Rowe and vanguard hedging activities.

 

The decline of share price from 69c to 31c which coincided with China lockdown of various cities from April 22 to Nov 22. China volatile shares mkt and properties mkt declined accordingly, rmb currency deep depreciation during this period.

YZJFH Mgt didn't anticipate the full impact of lockdown, NPL amount was accelerating up over last three months , ref. 3Q update.

With China covid-19 rules are being streamlined, the communities open up gradually based on Dec 7 govt official notice, a high chance that YZJFH NPL amount will decrease substantially that is quite certain.

 

I took a haircut for Q4 NPAT based on your Q3 61m, as DI interest income (which is their main earner) would be suspended from those NPL loans, being a whopping 777m or 31% of their entire portfolio. NPL loans are barred from interest declaration until they are non-NPL. And their NPL stage 1,2,3. Why need a stage 2 if default is classified at T+1. They might as well go from S1 to S3.

All said, we ought be very concerned for the 777 going forward. Their remittance to outside CN will be delayed. Super long tails I reckon. And some of these titles might not be that clearcut, master titles w 3rd party homes/apartments on them. Altho they say protected by 3rd party financial institutions at full value, I won't take their word fully. Recalls back the sub prime collapses, the CDO's or CLO's were supposedly fully secured. Turned out totally falsely hidden behind artificialities.

I feel we have a long cold winter on this counter. Easily 2-3 years. So I've plenty of time to average in, if I ever want to.

volvo125      ( Date: 07-Dec-2022 13:02) Posted: I was quite surprised to work out the NPAT at $61m inspite of the income streams problem on the affected NPL portion, the additional $14.8m NPL provision, and weak Shanghai and Shenshen markets that woud incur more negative fair value adjustment to the PE investments. I was expecting much lower but I do not think YFH is stupid enough to quote the latest Nav 1.0923 with the old 3937m o/s.  However, if YFH was quoting (again erroneously) the Nav 1.0923 with reference to the latest 3691m o/s as at 31Oct2022, then the net asset would equate to 1.0923 * 3691 = $4032m. Then netting off the ~$107m RMB devaluation and $14.8m NPL provision will give a near breakeven NPAT $3.8m. I hope the CFO LiuHua didnt make this referencing mistake. Not sure how you arrive at 4Q NPAT $55m but I would see more progressive +ve sides in 4Q due to the significant recovery in the SH and SZ markets, the easing of credit by the CCCP and the easing of covid restrictions. Unless more NPL provisions have to be pledged in 4Q, your 4Q projection is reasonable if 3Q NPAT $61m is indeed valid as a reference. On NPL, YFH website stated : Collateral coverage ratio for DI (at amortised costs) : 1.3x  as at 31 dec 2021. Based on CIMB indicated 2.3x taken at BV, YFH could have raised the collateral to 2.3x for the new DI added in 2022, but the 31% NPL DI could have been the older batches taken in during 2H2021 with 1.3x.  YFH NPL average ~16% between 2019~2021 before spin off, but only 12% and 2% of the allowance for impairment loss were used in 2019 and 2021 respectively, so the recovery seems still very good. According to YFH 1H2022 report, a loan is classified as NPL once principal payments are passed due VS industry standard of > 90d. As at 30Jun2022, Total UPL (underperforming) + NPL was = $162m + $52m = $215m, so there was a sudden increase of $562m NPL in 3Q and the $162m UPL had also turned NPL. Only time will tell how these $777m NPL will be sorted out, either via new payment terms, via partial or full recovery via collateralised assets seizure, or write off partially or completely .... etc we outsiders can' t really comment ...   emailpeter      ( Date: 07-Dec-2022 03:23) Posted: I will do some estimates based on your projections. Feel free correct my assumptions.   Q1+Q2      136 Q3 (e)          61 Q4 (e)          55 NPAT        252m   O/S Shares          3950 Less SBB (90%)   355 Net O/S              3595m   Est EPS 252/3595 = $0.07 Est PER (0.34)       = 4.8x Est Div% (40%)      = 0.028 / 0.34 = 8.2% Effective Div%        = 0.028 / 0.45 = 6.2% * * each investor can base on own ave cost. In my case its $0.45.   " d)    $777m NPL seems scary but only $14.8m seems really bad that needs provisions and these DIs are backed by 1.3x collaterals. I' m not expert so unable to comment on the recovery process further."   I' m also not an expert on this area, CIMB' s mention of 2.3x is taken at book values by FH, it would be a struggle to make accurate liquidation valuations of each land parcel owing to this volatile (downward) market. Furthermore, that ratio is on a grand total basis, in all likelihood the NPL loans would naturally cover the weaker land parcels, they might well be in major loan deficit. The plus would be most of the loan would have been paid back, leading to small amounts at NPL. We are just blindly guessing here.   I can' t see how they can make full recovery of all maturing loans, and not any rollovers. Credit to marginal companies are the hardest at this recessionary juncture.   It can be safely assumed, any large impending writeoff of NPL' s will be a huge major hit to yearend NPAT.

 

Appreciate it Volvo.