The Risks of Trusts in China
We collected data on 6500 Trust products. The risks are rising in the 12 trillion yuan trust industry, including money flowing to local government investments.
Category Archives: Research
McDonalds Versus Yum Brands. Who Will Win in China?
We attended investor meetings and store visits for both companies in September 2013 in Shanghai
Yum Brands has outpaced McDonalds in China on almost all metrics, looking at 2008-12 CAGR sales, ops profit, store expansion, margins. This is through first mover advantage and a flexible local team. The food scare for chicken supply and avian flu hurt 2013 results with 1H 2013 sales falling 6.3% YoY. Yum says it “will take some time” for margins (now 18%) to return to 20% and appears to be using this period to experiment with format and menu diversity. McDonalds is focused on a) rolling out its brand name to smaller cities and b) cutting costs. Given the diversity of its current menu and formats, KFC has the higher risk/reward profile.
Survey of KFC in China
OCR conducted a survey of sixty consumers in six Chinese cities. We asked them what they liked or didn’t like about KFC and its competitors. Two-thirds of respondents have concerns about the safety of the chain’s food more than three months after the problems with its chicken suppliers came to light. A surprisingly large number felt KFC could improve the taste and price of its food. These issues could contribute to problems in China as Yum Brands tries to maintain KFC’s large market share. KFC Survey in China
Business
WASHINGTON — As the Syrian opposition neared a decision on whether to attend an international peace conference next week, Secretary of State John Kerry offered a public assurance on Thursday that the Obama administration had not pulled back from its goal of establishing a transitional government that would not include President Bashar al-Assad. In a […]
China’s Shibor Crises and the Fundamental Economy
The attitude among the top leadership – and the history of the PBOC’s relationship to the Shibor – suggests that the concerns are not liquidity but the fiscal structure of local governments. The difference is important; if you think the PBOC failed to react to the Shibor hike because it was “teaching the banks a lesson,” then you miss the point that the PBOC considers the Shibor to be a sideshow compared to the issues in the larger economy.
The Chinese Consumer – “Hot” Trends
Our latest survey asked a simple question: what are the hottest trends in your town? We posed this question to young people in eight cities across China. We purposely left the question open ended in order to solicit wide open opinions. The results varied from the expected (KFC) to the more obeat (cosmetics for men). The survey provides insight into the sentiment and cultural mores among Chinese youth. For investors, it also pro- vides window into the buying habits of the future middle class.
Survey of Chinese Consumer Expectations
CRC has completed a short survey of consumer expectations for the Chinese economy. The survey polled 120 residents in a cross-section of ten representative Chinese cities. We asked residents about a number of key economic issues, including the expected trend for inflation, GDP growth, property prices and un- employment. We conclude that there is a significant amount of concern about the future of the Chinese economy that could impact everything from property values to inflation expectations to purchasing deci- sions.
Grandma’s Mortgage: Who’s Paying for China’s Property Bubble?
Grandma’s Mortgage
Who’s Paying for China’s Property Bubble?
CRC asked 132 property owners in China what was their source of capital for the real estate they acquired? In addition to personal savings, most buyers borrowed funds from a complex array of third party lenders. This reliance on “friends and family” and “other” sources of capital is a form of non-bank lending that is little understood and is a potential liability in the financial system.
Grandma’s Mortgage: Who’s Paying for China’s Property Bubble