Dongju United Capital was selected as one of the top 10 fastest-growing asset management companies (AMCs) in China, according to research done by the Asian Economic Research Institute (AERI), a research arm of Asia Times.
AMCs are going to benefit from rising demand in the market as commercial banks continue to offload non-performing assets (NPAs) from their books. Dongju United Capital has benefited from the development of the Chinese asset management market.
The number of problematic companies and non-performing corporate debts is expected to gradually increase due to the elimination of obsolete capacities and “zombie companies” amid supply-side structural reform in China.
In recent years, commercial banks have been under huge pressure from the regulators to speed up the management and sales of their NPAs. AMCs will see more business opportunities as there are more and more NPAs in the market while their prices continue to drop.
As the traditional way of managing NPAs by “discounting, packaging and litigating” had already failed to meet market demand, regulators encouraged AMCs to use innovative and tailor-made methods to revitalise their clients’ NPAs, which include accounts receivable and intangible assets. AMCs can help their clients restructure their debts, assets and businesses, issue debt-to-equity swaps and securitise their NPAs. They can also provide them with consultation services.
Among its peers, Dongju United Capital has been one of the fastest-growing AMCs in mainland China during the past few years.
With its headquarters in the Hengqin FTA, Zhuhai, and its entity operation headquarters in Shenzhen, Dongju United Capital has adhered to non-performing asset management as the main business, and actively expanded to other asset management and private equity businesses. The company is also engaged in troubled institution hosting and clearing operation businesses.
The company said it would adhere to the development concept of ‘having a foothold at home, looking at the whole world, and serving customers,’ and seize the opportunity of China’s financial market.
The company planned to apply for a listing on the National Equities Exchange and Quotations (NEEQ), or the “New Third Board,” in 2021.
The top 10 AMCs, which are either joint ventures of the state-owned-enterprises and private companies or entirely privately-owned firms, have optimised their businesses by adopting international standards while using their local and global networks to source buyers, said the AERI.
Over the past several years, these firms have dedicated themselves to NPA management businesses with some of them being diversified to other investment and private equity businesses.
The list was compiled based on four key business performance indicators, which include the growth rates of the candidates’ revenue, the complexity of the projects they handled, the qualifications of their management teams and their ability to source buyers.