Pengyuan Intl. Ke Chen on Chinese Developers

The video discusses a Chinese ratings agency based in Hong Kong that uses international standards to rate Chinese credit. It highlights the differences between this agency and typical international agencies, particularly in understanding the Chinese government's credit profile. The video also addresses challenges faced by Chinese property developers, including rating withdrawals and difficulties in offshore financing. It explores metrics used to assess the property market, focusing on cash flows and liquidity. Finally, it examines government support and the differences between onshore and offshore bond markets.

What is a key difference between the Chinese ratings agency based in Hong Kong and typical Chinese ratings agencies?

• They use international standards to rate Chinese credit.

• They do not consider government credit profiles.

• They focus solely on international markets.

• They use local standards to rate international credit.

Why have some international rating agencies withdrawn their ratings for Chinese property developers?

• To support local agencies.

• To increase their market share.

• Because of insufficient information.

• Due to an abundance of information.

What is a potential consequence of multiple notch downgrades for developers?

• Visual cycles leading to liquidity problems.

• Improved liquidity.

• Increased market confidence.

• Higher bond prices.

What is a primary indicator for assessing the financial health of Chinese property developers?

• Advertising expenditure.

• Employee turnover.

• Contract sales.

• Stock market performance.

What strategy are some Chinese developers using to meet their refinancing needs?

• Hiring more staff.

• Disposing of assets.

• Expanding into new markets.

• Increasing advertising budgets.

Why might developers prioritize onshore bond payments over offshore ones?

• Offshore bonds are more secure.

• Onshore bonds are less critical.

• Offshore bonds have higher interest rates.

• Onshore bonds are issued by operating subsidiaries with real assets.

How do developers view the payment of offshore obligations compared to onshore credits?

• Equally critical as onshore payments.

• Not critical at all.

• Less critical than onshore payments.

• More critical than onshore payments.