[ET Net News Agency, 9 April 2020] Morgan Stanley lowered its target price for China
Cinda Asset Management (01359) to HK$1.7 from HK$2.19 to reflect higher uncertainties and
a less positive NPL (non-performing loan) disposal environment amid COVID-19. Morgan
maintained its "equal-weight" rating.
The research house said Cinda's 2H 2019 NPAT was Rmb4.4bn, up 28% from a low base. Per
management, the current disclosed business does not include non-compliant semi-credit
products; questionable products are being digested. Distressed assets remained stable with
traditional distressed assets (TDA) up 7% hoh and debt-equity swaps (DES) up 3% hoh while
restructuring distressed assets (RDA) dropped 7% hoh amid tighter risk control and
acceleration in the disposal.
Morgan cut its NPAT estimates 6% for 2020 and 12% for 2021, and lowered its long-term
base case ROE (return on equity) forecast 1ppt, to 10.5%, reflecting shrinkage of non-DAM
business. (KL)