Johannes Salim, CFA
CFA, long/short equity, hedge fund manager

China Minsheng Banking: Misunderstood Growing Bank Or China's Lehman?

Over the past few years, China Minsheng Banking - Minsheng - (OTCPK:CGMBF) has gone from a growth company sell-side analysts love to being China's Lehman (potentially speaking at this point) due to its heavy involvement with wealth management products (WMP)/inter-bank market. Recall that some of WMP in China are "disguised loans" that ultimately carry credit risks as the funds are channeled to risky borrowers such as highly geared property developers and mining companies. Hence, its PB valuation has de-rated substantially from avg 1.37x in 2010-11 to avg 0.96x in 2013-YTD. However, in short, Minsheng is one of the companies that intrigue me the most.

Bull's case: Is Minsheng the most misunderstood growing bank?

I was having a...

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