China Finally Reopens

The economy might not rebound as much as expected, but some industries such as restaurants and travel should see a big positive change.

Snack Empire

Still holding this one.

Snack Empire Board Recommends 10pc Special Dividend

Annoucnement (PDF): Proposed Declaration and Payment of Special Dividend Out of the Share Premium Account

Approval is still pending a vote at an extraordinary general meeting in May.

Snack Empire

Mentioned this one again last week. Popped today on news of a possible special dividend.

Haidilao Rolling Over With China

So much for that idea if this keeps up. The weather will save China from the lockdowns, but then it all depends on if there is a recovery.

Snack Empire has a better setup if it can break higher. I have been holding this one for quite some time.

The big question for China is whether the government stimulus efforts will pay off.

Bloomberg: China Cabinet Vows Monetary Stimulus, Saying Risks Worsening

Officials will use multiple monetary policy tools at an “appropriate time” to support the real economy, according to a readout from a meeting of the State Council chaired by Premier Li Keqiang on Wednesday. The “complexity and uncertainty of domestic and foreign environments have intensified, and some have exceeded expectations,” the meeting said.

The State Council, China’s Cabinet, didn’t mention specific easing steps, like reducing the reserve requirement ratio. It previously gave signals for a RRR cut in July and December days before the People’s Bank of China cut the ratio.

Chinese authorities have made repeated vows to stabilize the economy in recent weeks as Covid restrictions curtail spending and business activity. A gauge of sentiment in the services sector fell in March to the lowest level in about two years, while the country’s financial hub Shanghai is in total lockdown. That’s putting the government’s ambitious growth target of about 5.5% for this year in doubt.

The State Council said that while the economy is still moving in a reasonable range, new downward pressures have intensified, with more frequent virus outbreaks, a slowing global economic recovery and fluctuating commodity prices. The government should promptly introduce measures that are conducive to stabilizing market expectations and bring forward some policies laid out in the government work report, it said.

Top financial leaders pledged last month to ease regulatory crackdowns, support property developers and stimulate the economy through monetary policy. However, few concrete steps have been taken so far.

Credit easing doesn't work because of debt problems and restriction on housing speculation. Credit grows if there is a housing bubble, otherwise not. The government has to force investment if it wants more growth. They are talking about front-loading spending, but not doing any major stimulus yet.

iFeng: 燕郊首付降至20%？被套的北漂买家：五年前赶着上车，如今房价跌了一半

However, Yanjiao is not Beijing after all, and it is difficult for the needs of "beijing drifters" to support the huge stock market. Recently, there has been news that Yanjiao is trying to relax the housing purchase policy to stimulate the property market, reducing the down payment ratio for the first house to a minimum of 20%, and the down payment ratio for the second house to a minimum of 30%. Prior to this, the down payment ratio for the purchase of a house in Yanjiao was 30% for the first set and 50% for the second set.

Times Finance learned from the local real estate agency in Yanjiao that the store has indeed received a notice that the down payment ratio has been reduced, and many real estate agencies have begun to use "low down payment" as a gimmick to persuade customers to "get on the bus" as soon as possible. However, on April 7, news came again from the Yanjiao market that some banks stopped the reduction of the down payment, and the real estate agency also told Times Finance that the "down payment reduction" may have to wait.

One anecdote from the market:

Cai Zhiqiang works in Wangjing, Beijing. During the morning and evening rush hours, the commute time from Yanjiao to Wangjing is at least an hour and a half. When there is a serious traffic jam, the time is even more unpredictable. In the evening, in order to avoid the rush hour, Cai Zhiqiang always worked overtime on his own. He waited until the road conditions improved after 9 pm before leaving home, which was often late at night.

The fatigue of commuting is not the main reason why Cai Zhiqiang regrets buying a house in Yanjiao. What he did not expect was that the Yanjiao property market was in full swing in 2017. After just three or four years, the hot situation was completely reversed, and house prices fell all the way. Last year, Cai Zhiqiang's neighbor listed a second-hand house with the same size of 73 square meters, and the price had fallen to 1.5 million yuan.

"Watching the housing prices in Yanjiao keep dropping in recent years, I feel like I've been deceived. The listing price of 1.5 million yuan can be said to be a blood loss. As far as I am concerned, the unpaid loan plus interest is still there. 1.2 million yuan. Moreover, few people came to see the house after it was listed. It has been listed for almost a year, and it has not been sold yet.”

Assuming he made a 30 percent down payment, his loan-to-value ratio has fallen over the past 5 years. He has 300,000 yuan in equity, down from the roughly 900,000 yuan down payment he would have dropped in 2017 if the 30-percent down payment as in effect.

The marketing director of a real estate company in Beijing told Times Finance that the property market in the north has not been ideal in recent years. Even in Beijing, it is in a stable state, with few sharp rises and falls. The investment logic of the property market around Beijing is attached to the Beijing market. After the market stabilized, the premium space of the Beijing-based property market was curbed, which caused a large market shock.

"Whether it is a home buyer or a real estate company, as long as they rushed into the Beijing-based property market at a high level a few years ago, most of them can't escape the fate of being 'set'. Now real estate companies will still selectively deploy the Beijing-based property market, with sufficient funds. In contrast, many private housing companies are significantly reducing the frequency of taking projects around Beijing.”

Elsewhere, banks are offering six months of mortgage relief because of the lockdowns.

iFeng: 银行纾困房贷还款：最长延期半年

Liao Xing, who has been working in Shanghai all the year round, did not expect that the spring of 2022 would be spent in Shangrao, his hometown.

"The mortgage is about to be repaid, but I still don't know when I will go back to work. The bank can give me some time to slow down." Since buying a commercial house in his hometown last year, Liao Xing has taken on a mortgage of about 3,000 yuan per month. . When the epidemic hit, Liao Xing's income dropped sharply, and the pressure on loan repayment increased sharply.

This may be the epitome of some people who have bought houses at present. Recently, information about asking for help due to the impact of the epidemic on income has been frequently seen on the Internet, and discussions on "deferred mortgage repayment" have also rushed to the hot search.

"It's so necessary, it's time to embody the bank's sense of social responsibility!" On social platforms, the voices that banks should give support are getting louder.

Industry insiders pointed out that the current epidemic has an impact on personal cash flow, and a reasonable extension is better credit protection for individuals, reduces the impact on future financial activities, and is conducive to better support for people's livelihood development.

According to the reporter of Caijing, many banks, including large state-owned banks, joint-stock banks, and urban and rural commercial banks, have responded to this. Some banks have introduced targeted measures, including grace period and credit protection protection, for areas severely affected by the epidemic. However, in general, there is no unified policy issued by each bank at present. Industry insiders believe that due to the large number of details involved, it is unlikely that banks will fully implement loan deferrals.

Emphasis in the original.

China Lockdown Victims Rebound

It looks like the lesiure and hospitality sector has bottomed out.

Snack Empire

Still holding this one, more of a long-term trade. Not a large position yet.

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