Way fund no longer an realizable, it does seem like driven pretty much by
headlines. Why is that?
I think that a couple of issues before we talk about whether it is and then ISE
or not and the lines of, well, let's look at what we did in the past to
analyze the sector and the developers. So normally in any proper research on
fundamental analysis, we do top down. So we studied the economy, we studied
which grossed affordability. We also studied the market in terms of
property market, the supply and demand and the price.
And if we zoom down to the micro market from regional market to cities, we also
do a bottom up analysis of the companies.
So we we also know, like, say, the fungus bank run the management style.
We also know that operations that lend bad quality and their financials.
So throughout the years, I think every analyst who studied this market or every
investor, we develop our own MSA at different stage of the market
development. So we not only look at funding shows and
we also talk to the rating agencies and that is also not good enough.
We meet with the companies. We also know that seeing is believing.
So we also visit debt projects across China and the of the U.S.
We also get a lot of our geographical knowledge about China.
But we also know at extreme market we need both willingness and ability to
pay. So to be fair to the developers, they
also deal with that. So to the yes, the developers also tried
themselves to help the investors to understand the market and understand
themselves. And they also set up frequent meetings,
site visit, reverse real shows. And they also set up some industry kind
of practice, which is they call monthly newsletter.
Tell me about the investment investors and the market.
How much do you sell during the months and how much land they buy during the
months? So that is all good.
So we've with our knowledge of the market and the issuers in the past 10,
15 years and we know some are more prudent and some are more aggressive,
some are more transparent, some are more difficult to talk to.
So that is what we did in the past. But now all this what we can do in the
past are mostly all gone. And the worse, we now have to seen many
social media accounts. Read upon which I had my faith lost, and
now we are. What do you do?
Wave. And what do you do now?
Especially for junk rated companies. I think now is very difficult.
That's why I say it is not an indictable.
Just like, say, if 10 percent go to a hospital, one or two is like terminal
disease and that the die is quite understandable.
But if seven to eight died in the hospital and another one to two in ICU,
that is not something normal in the China property market.
You have like say 70, 80 percent default rate.
That is not normal, too. So for us, we are totally lost offshore.
And also because of the zero Covid policy we used to be able to visit, the
project would be used to be able to visit the developers.
We can do anything here now. So that's why I'm just saying that it's
very difficult for us, even though we know a sad day.
The cash. I dare you.
But again, not gay cannot be moved. But what we can do here?
Offshore, of course, as offshore investor fund day one, we know offshore
bonds are structurally subordinated to onshore.
That's yes, definitely. But there is also a legal order.
Yes, very good reason. If you can give your answers short, I
want to know actually how bad the picture is on the ground.
Quickly. On the ground is offshore, we can see.
We only know the cells go down 50 percent, land sales go down 40 to 50
percent, and the developers cannot move that cash cannot have, cannot borrow.
That is what we all know. But how?
Going to tackle this. We all had to roll out a lot of policies
to help the developers, but. So we are also in the waiting time to
see what policymakers are doing, what they want, you know, it's a very policy
to the market, as I said. Exactly.
So if and when if they're not analyzing all other investable and told me the
other thing very quickly to what needs to happen for them to be analyzing will
and doubly investable as well because of this loss of confidence.
I think at the very beginning, you need to know their financials and the, you
know, what are the problem coming from why they have so much cash sitting on
the account. But they can use it.
What is the problem and how to resolve the problem?
Because the asset that did, as Y said, the asset, fixed asset of property there
on the land that cannot be moved, they're not cash can be moved.
So if we know the property idea and that is only the sells on that debt, then
liquidating that debt. So do we know the problem?
What we want to know is how the government want to tackle the problem of
the problem. Let leave the developers what they are
going to do. Wisdom.
Because for China property, we all know that is a very private IPO.
Dubai business is not a lot of assets. Easy.
And you can see most of that feel when you start out in default.
Now.