China Cinda Asset Management Co. Ltd. And China Cinda (HK) Holdings Co. Ltd.

The stable outlook on China Cinda over the next 24 months reflects our view that the company will retain its very important role for, and very strong link with, the Chinese government. The outlook also reflects our view that the group's nonbank financial institution (NBFI) segment will keep its leverage below 6.5x over the next 24 months. We also believe the segment will maintain asset quality in line with its peers' and have manageable impairment charges on assets. In addition, we expect the credit profile of Nanyang Commercial Bank Ltd. (NCB), a subsidiary of China Cinda, to remain stable over the period. We are likely to downgrade China Cinda if the NBFI segment's leverage is sustainably above 6.5x, or the

...Asset quality challenges will likely remain in the next two years due to China's property slump. We think problem assets could surface in China Cinda Asset Management Co. Ltd. (China Cinda)'s restructured distressed asset (RDA) book and in other property-related exposures. China Cinda's exposure in the property sector remains elevated, in our view. The company's property concentration is on par with peers, with property exposure at 47.4% of its RDA as of end-2022. The company will likely maintain its solid market position in the niche distressed asset management (DAM) market. This is supported by its long-term expertise and track record in distressed asset disposal and restructuring, as well as its nationwide scale and funding advantage. The very high likelihood of extraordinary government support will remain intact. We expect China Cinda to maintain its very important role as a financial system stabilizer in China, including acquiring and managing nonperforming assets (NPAs) from financial...

Full Report