Mirroring from China’s Huarong Asset Management AMC (Appraisal Management Company) in 2021, they have redeemed big writedowns. It happens during China’s property sector issues. Analysts predict that although the performance is weak due to the tough market situation, the company will remain gaining more profit.
The Chinese distressed-asset manager noted that the company has achieved a net profit attributable to shareholders for as much as $59.4m. Before, the company faced as much as Rmb 102.9bn loss in 2020. Their net profit is Rmb378.5m now. AMC has been thriving in larger areas these days. It began with the execution of chairman Lai Xiaoin due to bribery last year.
Huarong AMC has implemented a three-year strategic plan in order to divest non-core assets so that it could refocus on its main business. Not including distressed assets, Huarong AMC has made fair value gains on both financial assets and liabilities. It is as much as Rmb13.2bn, a sharp reversal of 2020’s Rmb 12.5bn of the loss value. At the end of December the company’s total asset was Rmb1.6trn which was below 4.4%.
In addition, the company has cut its debt. They allow bonds to mature without being refinanced by new issues. As a result, the total of outstanding bonds crashed by 19.6% to Rmb271.1bn. Then, its interest expenses decreased by 16.4%, said IFR Asia. CreditSights is positive that although Huarong’s operational performance remains weak in 2022 due to economic challenges, they will come back to capital markets during a stable bond price.
Before, in 2020, the company was late in prompting a long suspension of the company’s shares. But the latest annual result which should be done before March 31st is submitted early. Huarong AMC is thriving better.
