As the Chinese government and the People?s Bank of China continue to tighten, there is one unlikely beneficiary. For now, at least.
Credit China Holdings Limited (8207.HK) is a financial service company listed in Hong Kong?s Growth Enterprise Market, the segment of the Hong Kong stock exchange which was established at the height of the dot-com bubble. Its share price has performed rather strongly of late. So what business is it in?
According to its annual report, Credit China:
offers a wide range of short-term financing services to accommodate the varying needs of its customers. The Group?s turnover is mainly derived from the provision of real estate pawn loans service, entrusted loans service and financial consultancy service. The Group also offers short-term personal property pawn loans to individuals with personal property as collateral.
Why is it thriving? According to the first quarter result of 2011, the company?s turnover increased 154.6% yoy, while net profit increased by 122.5% yoy. In the first quarter report, it says:
The PRC macro-economic controls and stringent monetary policy has caused so much tension to the credit market in China, but concurrently has created the best-ever business development opportunities to the Group.
This article originally appeared here: China: When Banks Stop Lending, Go To A Pawnshop
Also sprach Analyst - World & China Economy, Global Finance, Real Estate
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