Yangzijiang Financial Holding

Am reading the company's largest business segment and has taken an interest due to its low P/E and low P/B

https://www.yzjfin.com/services/debt-investment/

For a company that is earning about 10.1% interest but a NPL of 16.3%. Is this a fair risk/reward ratio? Not that sure of this, hence asking fellow buddies who has banking or financing experience.

Thanks

Prima Facie no but based on my understanding it is fully provided for hence >1 coverage ratio and it is collateralised so risk is very low. That's what they presented that they have very little write off

It's first financial statement shows a decline in income potentially due to the shifting of funds from China to Singapore resulting in idle cash

Not sure how much we have can infer from this half year report, but assuming a 7 cents EPS and 40% dividend policy, YZJ finance looks set to give out 2.5-2.8cents in dividends. With 92% of China's debt maturing in 1 year time and that it consists of 57% of the company's investment portfolio and a large proportion in china real estate (32% of its debt ), I hope YZJ finance would be prudent not to renew it and move away from such a large exposure to the Chinese real estate segment, see page 27 of the powerpoint

Financial Result- https://links.sgx.com/FileOpen/YZJFH%20A...eID=728099

Powerpoint - https://links.sgx.com/FileOpen/YZJFH%20A...eID=728101

(29-06-2022, 11:36 AM)CY09 Wrote: Am reading the company's largest business segment and has taken an interest due to its low P/E and low P/B

https://www.yzjfin.com/services/debt-investment/

For a company that is earning about 10.1% interest but a NPL of 16.3%. Is this a fair risk/reward ratio? Not that sure of this, hence asking fellow buddies who has banking or financing experience.

Thanks

Just saw this post, so thought you might be interested to find that the NPL has dropped to 2% from 16% by virtue of having to leave the problematic loans with YZJ shipbuilding. That’s in line with what I mentioned in my blog. Asset quality is basically filtered, leaving the more problematic loans behind due to legal issues.

That makes this an even more viable buy by looking at PB ratio. However there is significant worries coming out of China for property developers and thhe like. However, isn’t such circumstances that makes bargains out of stocks. Being paid 7-8% a year in dividends to wait is fine by me. In the meanwhile, the share buybacks will just make my stake more and more valuable with higher and higher yield.

(15-08-2022, 09:39 AM)Squirrel Wrote:

(29-06-2022, 11:36 AM)CY09 Wrote: Am reading the company's largest business segment and has taken an interest due to its low P/E and low P/B

https://www.yzjfin.com/services/debt-investment/

For a company that is earning about 10.1% interest but a NPL of 16.3%. Is this a fair risk/reward ratio? Not that sure of this, hence asking fellow buddies who has banking or financing experience.

Thanks

Just saw this post, so thought you might be interested to find that the NPL has dropped to 2% from 16% by virtue of having to leave the problematic loans with YZJ shipbuilding. That’s in line with what I mentioned in my blog. Asset quality is basically filtered, leaving the more problematic loans behind due to legal issues.

That makes this an even more viable buy by looking at PB ratio. However there is significant worries coming out of China for property developers and thhe like. However, isn’t such circumstances that makes bargains out of stocks. Being paid 7-8% a year in dividends to wait is fine by me. In the meanwhile, the share buybacks will just make my stake more and more valuable with higher and higher yield.

another problem is that china property market is probably already peaked much like in 1990s in Japan. Despite many claiming CHina wont repeat japans mistakes, I am seeing history repeating somewhat. The math behind China's asset property bubble is there with the debt. And demographics wise China is in decline with negative pop growth and ageing pop which wont need as much housing in the next coupe decades --> VERY bad for both property sector and economic growth based on consumers.

Why be greedy for a few extra percentage points of yield when you can park in cash or some bluechips like shengshiong etc. U can always reallocate should beijing change policy and step back in to pump their property though I am not sure if they will or be able to once its start spiralling downwards.

(15-08-2022, 12:20 PM)BlueKelah Wrote:

(15-08-2022, 09:39 AM)Squirrel Wrote:

(29-06-2022, 11:36 AM)CY09 Wrote: Am reading the company's largest business segment and has taken an interest due to its low P/E and low P/B

https://www.yzjfin.com/services/debt-investment/

For a company that is earning about 10.1% interest but a NPL of 16.3%. Is this a fair risk/reward ratio? Not that sure of this, hence asking fellow buddies who has banking or financing experience.

Thanks

Just saw this post, so thought you might be interested to find that the NPL has dropped to 2% from 16% by virtue of having to leave the problematic loans with YZJ shipbuilding. That’s in line with what I mentioned in my blog. Asset quality is basically filtered, leaving the more problematic loans behind due to legal issues.

That makes this an even more viable buy by looking at PB ratio. However there is significant worries coming out of China for property developers and thhe like. However, isn’t such circumstances that makes bargains out of stocks. Being paid 7-8% a year in dividends to wait is fine by me. In the meanwhile, the share buybacks will just make my stake more and more valuable with higher and higher yield.

another problem is that china property market is probably already peaked much like in 1990s in Japan. Despite many claiming CHina wont repeat japans mistakes, I am seeing history repeating somewhat. The math behind China's asset property bubble is there with the debt. And demographics wise China is in decline with negative pop growth and ageing pop which wont need as much housing in the next coupe decades --> VERY bad for both property sector and economic growth based on consumers.

Why be greedy for a few extra percentage points of yield when you can park in cash or some bluechips like shengshiong etc. U can always reallocate should beijing change policy and step back in to pump their property though I am not sure if they will or be able to once its start spiralling downwards.

Hi BlueKelah,

Hope you don’t find it offensive but I do think you need to be a bit mindful of what you insinuate in the forum. Just a while ago, you were commenting on the balance sheet of MedTec as well and it’s reliability. Unless you have proof or made some research into these, my personal opinion is that there is no need to expose yourself to potential litigation. I am not sure what’s the boundary for getting sued or not getting sued but it just reminds me of a recent incident on this forum itself. Just my 2 cents worth.

And back to YZJ FH. No, I am not being greedy for a few percentage points. I am looking at the position at least doubling from here. It makes me absolutely gleeful to see comments like yours and so many others around. If one works the math behind the property exposure and the recovery from a default of a loan collateralized on property, one can make their own estimate of how much capital is at risk. I have my figures and I believe there is a big enough buffer. It might takes years or it might take months for my target price to be reached, but I am staying vested and happy to see shares getting bought back at an equivalent of 30 cents on a dollar at current pricing relative to book value.

Hi Squirrel,
Thanks for looking out for a fellow VB, especially one who doesn't seem to agree with you
All posts you mentioned have been moderated on an urgent basis to protect BlueKelah.

Moderator.

The company has been doing aggressive sharebuyback since the release of FY results, with at least 6 million in shares bought back during each trading day

With a mandate to buy back 395 million shares (10% of 3,950 million shares), it looks like the company will max its mandate in another 60 trading days time. However, the value of the comoany has plunged 10% and it might be due to a major shareholder disposing its stake. The company's aggressive share buyback does seem a good sign that they find it undervalued

(15-08-2022, 02:40 PM)weijian Wrote: Hi Squirrel,
Thanks for looking out for a fellow VB, especially one who doesn't seem to agree with you
All posts you mentioned have been moderated on an urgent basis to protect BlueKelah.

Moderator.

Hi Squirrel, no problem I am not offended by anything. 

Whilst I am exposed to SGX market, I am based overseas semi-permananently, so not too worried about any sort of lawsuit as I am only commenting. 

I do not remember saying MEdtecs balance sheet was suspect, I actually said it was strong in my latest post, I just said I heard they didnt do right by OPMI with the taiwanese listing many years ago.

In any case, there have been so many cases of misconduct on SGX with SChips especially, even blue chips like NOBLE can have suspect balance sheets. I believe as a stocks discussion forum we have the right to call out any irregularities if we see them. 

Wish you good luck with your investment in YZJ Financial, there is always the chance CHinese gov step in and repump the property sector again.

(17-08-2022, 11:38 PM)CY09 Wrote: The company has been doing aggressive sharebuyback since the release of FY results, with at least 6 million in shares bought back during each trading day

With a mandate to buy back 395 million shares (10% of 3,950 million shares), it looks like the company will max its mandate in another 60 trading days time. However, the value of the comoany has plunged 10% and it might be due to a major shareholder disposing its stake. The company's aggressive share buyback does seem a good sign that they find it undervalued

i don't quite understand why they are not even more aggressive on the buyback, why buy only 6mil shares when they can easily buy twice/thrice of that?