Bailing out of the highly-watched product management "Credit equal Gold #1" richness and safe dotted with liquidity (CNY375 billion of the PBOC) the survival of the lunar new year liquidity crisis has much to believe the worst is over. Although we discussed this fallacy in depth here, the table following the total collapse in the largest Chinese coal producers said that it is far from over. The rating equal to or less than the book value, investors clearly are signaling concern about the quality of assets aptly summarized by a local analyst - China coal industry (including loans back a massive amount of wealth management products) is "dead".
Through Bloomberg,.
Shares of largest listed China coal producers have dropped to their lowest valuations on record as the fall of fuel prices make it more difficult to repay the debt.
Bloomberg table above follows the ratio price-to-book of China Shenhua Energy Co., China Coal Energy Co. and Yanzhou Coal Mining Co. trade of China coal and Yanzhou Coal below the value of their net assets, while Shenhua Energy dropped to about 1 times book. The lower panel displays the index energy gauge CSI 300 negotiated at a record price for the MSCI all country world energy last month.
Slowdown in economic growth and designed to increase the use of alternative fuels were dragged to the low price of coal in China, most big world producer and fuel consumption. Bank the country's regulator ordered its regional offices to increase the control risks of credit industry, two people with knowledge of the case, said last month, signaling the concern of the Government about the default possible values.
The coal industry of China are "dead" says Laban Yu, an analyst with Jefferies Group LLC in Hong Kong with a rating of underperform on all three stocks. "There are 10,000 producers in China. Many of them take on the debt. It becomes harder and harder to service debts when the coal prices continue to fall. "
China coal warned on 24 January that net income by 2013 will be probably as much as 65 percent in the previous year. The second producer had 50 billion yuan (8.3 billion$) net debt at the end of last year, the net cash position of 6 billion yuan in 2011, according to a note from Barclays Plc last month. The stock has tumbled by 82 per cent from its 2008 peak.
Shenhua drops, the designated unit of the China coal producer n ° 1, have wiped out 178 billion $ market value since the 2007 reached a peak in stock - equivalent to the value of Bank of America Corp. Yanzhou Coal, ranked fourth, has fallen by 80% of its 2011 high.
So, in summary, the PBOC has to the rescue plan, a 'small' wealth management product due to fears of contagion, just to amplify the future problems and investors are coal companies price (including a large number of shadow banking facilities of return) for major problems to come... and the PBC should pump CNY 375 billion in just last week support the banks through the new year...
But apart from that - Yes, the China credit crisis must be more because the U.S. actions are in place for 3 days...
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