Log in
Show password
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 
  1. Homepage
  2. Equities
  3. China
  4. Shenzhen Stock Exchange
  5. Yango Group Co., Ltd
  6. News
  7. Summary
    000671   CNE000000206


SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector newsMarketScreener Strategies

Analysis-China's real estate woes sap property investment products

11/16/2021 | 04:35am EST
FILE PHOTO: Woman walks past a property model at a sales office of Kaisa Group Holdings Ltd in Shenzhen

SHANGHAI (Reuters) - Chinese investors are abandoning an age-old attachment to property investment products and seeking returns in equities and other corners of the capital markets, as the authorities crack down on the debt-fuelled property sector.

The flow of cash into property investment products issued by trust companies has slumped since September, as embattled property giant China Evergrande Group's debt woes deepened.

That in turn is shutting one of the remaining funding channels for property developers who are already suffering from strict lending curbs onshore and record borrowing costs in the offshore bond market.

"Previous investment logic has collapsed," said Shanghai businessman Desmond Pan, who is considering shifting millions of yuan in property trust products into Bridgewater's China fund called All Weather Enhanced Strategy.

Sifting through a brochure with billionaire founder Ray Dalio's smiling face and a smooth and rising performance curve, Pan reckons the multi-asset fund, with an annualised return of 19%, is a suitable investment substitute.

Chinese investors have long had a penchant for real estate investments but the money flowing into property investment products has been shrinking in recent years since Beijing started to curtail shadow banking in 2017. Evergrande's default on wealth management products (WMPs) in September, which triggered investor protests in many cities, only accelerated that trend.

At the end of June, trust money that invests in real estate totalled 2.1 trillion yuan ($329.3 billion), down 17% from a year earlier. In contrast, trust products investing in securities such as bonds and stocks jumped 35% to 2.8 trillion yuan, according to the China Trustee Association.


The rotation of money picked up pace in recent months, with fundraising by property-related trust products slumping 38% in September from the previous month, and 55% in October, according to Use Finance & Trust Research Institute.

"Property-related trust products don't sell these days, and we see clients step up shifting money into funds with relatively stable returns, such as fund of fund (FoF), and 'quant funds'," said a FoF manager at Shenwan Hongyuan Group, who declined to be identified as he is not authorised to speak to the media.

Quant funds, or quantitative funds, employ software to automate investment decisions and often generate higher returns than bonds but carry less risk than stocks.

"Chinese policies are nudging capital away from real estate, which is absolutely positive news for the asset management industry," said Jason Hsu, founder and chairman of Rayliant Global Advisors, which recently launched a multi-strategy hedge fund in China that uses quantitative analysis.

Shi Ke, a partner at Shanghai iFund Asset Management Co, a quant hedge fund house, agrees: "You need to cautious with property investment products. The risk of default is growing."

According to Citi Securities, China's quantitative private funds have grown to 1 trillion yuan ($154.6 billion) in recent months. That is almost 10 times their size in 2017.

Besides trust products, real estate wealth management products sold through banks or independent wealth management companies have also suffered after defaults at Evergrande and more recently a liquidity crunch at developer Kaisa Group.

Jianda Ni, chairman of real estate-focused wealth management company Jupai Holdings, says there has been an irreversible shift of investment toward equities in sectors such as technology and new energy, and away from debt issued by developers.

The firm, which distributes products to fund projects by Yango Group Co, Kaisa and Guangzhou R&F Properties Co, said it continues to diversify its product line and introduce more equity, overseas and secondary market products.

Rival Hywin Holdings Ltd, which distributes products to fund projects by developers including Evergrande, told Reuters in September it aimed to reduce its reliance on real estate by expanding new products and growing businesses offshore. When contacted for comment, it did not provide further details.

Liang Dongqing, head of wealth management service at China International Capital Corp (CICC), told a conference in October that while real estate remains the biggest component of the Chinese household balance sheet, the demographic and liquidity drivers behind China's property bull cycle have gone.

"Guiding clients to shift some of their existing wealth away from real estate, and reallocate assets to share China's future economic growth, represents the biggest opportunity for wealth managers over the next decade."

($1 = 6.3776 Chinese yuan)

(Reporting by Samuel Shen; Additional reporting by Vidya Ranganathan in Singapore; Editing by Jacqueline Wong)

By Samuel Shen and Vidya Ranganathan

ę Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
CHINA EVERGRANDE GROUP 4.88% 1.72 End-of-day quote.8.18%
GUANGZHOU R&F PROPERTIES CO., LTD. 9.81% 3.47 End-of-day quote.19.66%
KAISA GROUP HOLDINGS LTD. 1.12% 0.9 End-of-day quote.15.38%
YANGO GROUP CO., LTD 2.92% 3.17 End-of-day quote.4.97%
All news about YANGO GROUP CO., LTD
01/06Yango Chairman Resigns Amid Debt Crisis; Shares Up 3%
01/05Home prices in large Chinese cities show tentative signs of stabilising
2021China's Fujian Sunshine fails to make bond payment, Cailianshe reports
2021Sunshine City Group Announces Resignation of Chen Yilun from the Board of Directors
2021Moody’s Withdraws Ratings of Modern Land, Fantasia Amid Sector-Wide Liquidity Cri..
2021Yango Justice International Files for Singapore Listing of $670 Million Bonds
2021China developer Yango to issue $670 million new notes in bond swap
2021Yango Bondholders Agree to Swap Some Maturing Debts With New Ones
2021Analysis-China's real estate woes sap property investment products
2021WeChat bargain hunters seek profits in China property bond rout
More news
Sales 2021 90 689 M 14 292 M 14 292 M
Net income 2021 5 774 M 910 M 910 M
Net Debt 2021 56 819 M 8 954 M 8 954 M
P/E ratio 2021 2,25x
Yield 2021 10,3%
Capitalization 13 048 M 2 056 M 2 056 M
EV / Sales 2021 0,77x
EV / Sales 2022 0,68x
Nbr of Employees 9 676
Free-Float 51,6%
Duration : Period :
Yango Group Co., Ltd Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends YANGO GROUP CO., LTD
Short TermMid-TermLong Term
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 6
Last Close Price 3,17 CNY
Average target price 3,03 CNY
Spread / Average Target -4,31%
EPS Revisions
Managers and Directors
Rong Bin Zhu President & Chief Executive Officer
Ni Chen Chief Financial Officer
Teng Jiao Lin Chairman
Jie Wu Chairman-Supervisory Board
Jing Dong Liu Independent Director
Sector and Competitors
1st jan.Capi. (M$)
YANGO GROUP CO., LTD4.97%1 996
VONOVIA SE-1.81%41 905
CHINA VANKE CO., LTD.9.26%38 061