Special Situations

Haide Industry Raising $858M To Expand Non-performing Asset Business

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Shenzhen-listed company Hainan Haide Industry Co., Ltd. has announced plans to raise up to RMB5.5 billion (US$858 million) from not more than 10 investors to boost its asset management subsidiary, according to its security filing.

Founded in 1992, Haide Industry originally engaged in the development, sales, management and leasing of real estate.  In 2016, the firm obtained the asset management company  (AMC) license and established its asset management subsidiary Haide Asset Management Ltd.

Haide Asset Management focuses on the investment, management and disposal of non-performing assets, as well as debt restructuring and corporate restructuring. It also provides investment and financial consulting services.

The company’s non-performing asset business has seen improving financial results. In 2017, the company recorded revenue of RMB202 million, with a 355.8% year-over-year growth, and net income of RMB73.27 million, with a 2360.5% year-over-year growth.

Haide said the improved financial result was due to its "successful transition to non-performing asset business." In 2017, the company managed non-performing assets of RMB4.1 billion (US$640 million).

Haide also announced plans to set up subsidiaries in Shenzhen, Nanjing and Chengdu to expand its asset management business.

As China’s bad loans increase, more companies are eyeing the non-performing asset market. As of the end of 2017, there were 57 local AMCs besides the big four state-owned AMCs. Total assets of local AMCs reached over RMB400 billion (US$62.45 billion), while net assets stood at around RMB150 billion (US$23.42 billion) by the end of 2017.

 


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