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06-12-2022, 10:25 PM
YZJFH has to be firm in dealing with this deliquencies. They have collateral and it is time to monetise via auction/tender/force selling.
In its 2Q presentation, it claims its coverage ratio for land/building is 2.3 times the principal. Evergrande has had its assets sold off within a year of being in default, its lenders have recovered 55%-90% of the value through tenders. Hence YZJFH should do the same to recover the principal of its debts. The interest of its shareholders should come before the country and who cares if such acts continue to plummet China's debt crisis. This is how market works.
I am hopeful that YZJFH will provide an update of how it is handling the collaterals to the debt instrument in April 2023. This would mean 6 months has passed from the announcement yesterday.
If the answer during the AGM is that they are giving their debtors a grace period despite being due more than 6 months, it is a red flag that the mgmt feels the collateral is not enough to recover the principal. This is because the safeguard of collaterals should now kick in to recover cost. It would be good as well if the mgmt annoucnes their maturing debt has been successfully repaid.
Currently they are holding 56% of portfoilo in debt instrument. This is risky but is a good step in the reduction from 82.6% in 2Q2022. YZJFH clearly has to stop taking too much risk in the Chinese debt market and go totally risk off. This is why they are branching to Singapore and hopefully they would fulfill the 25% of investments in Singapore by end 2022. I hope for it to be a clean transfer of cash with no intra group loans.
In its 2Q presentation, it claims its coverage ratio for land/building is 2.3 times the principal. Evergrande has had its assets sold off within a year of being in default, its lenders have recovered 55%-90% of the value through tenders. Hence YZJFH should do the same to recover the principal of its debts. The interest of its shareholders should come before the country and who cares if such acts continue to plummet China's debt crisis. This is how market works.
I am hopeful that YZJFH will provide an update of how it is handling the collaterals to the debt instrument in April 2023. This would mean 6 months has passed from the announcement yesterday.
If the answer during the AGM is that they are giving their debtors a grace period despite being due more than 6 months, it is a red flag that the mgmt feels the collateral is not enough to recover the principal. This is because the safeguard of collaterals should now kick in to recover cost. It would be good as well if the mgmt annoucnes their maturing debt has been successfully repaid.
Currently they are holding 56% of portfoilo in debt instrument. This is risky but is a good step in the reduction from 82.6% in 2Q2022. YZJFH clearly has to stop taking too much risk in the Chinese debt market and go totally risk off. This is why they are branching to Singapore and hopefully they would fulfill the 25% of investments in Singapore by end 2022. I hope for it to be a clean transfer of cash with no intra group loans.