In 2020, we have experienced several major events: the COVID-19 pandemic, U.S. stock fusing, oil price collapse, etc. In this case, China distressed asset industry also ushered in new opportunities.
On November 13, the China Distressed Asset Restructuring and Acquisition Forum & DCL Investments 2020 investor annual conference was held in Tianjin. The theme of the meeting was: “Embracing the New Wave of Distressed Asset Industry”. There were more than 100 guests from domestic top investment institutions, financial institutions, real estate industry and academic fields gathered in Jinmen to discuss the new wave of China distressed asset industry under the great changes of the world.
“China is on the threshold of a new wave of distressed asset industry.” Hualing Zheng, the chairman of DCL Investments described the current situation of China distressed asset industry. Ms. Zheng also reported the recent achievements, development plans and strategic blueprints of DCL Investments.
Affected by the pressure of economic supply/demand and the domestic and foreign markets, the supply of distressed assets in banking industry has increased significantly, and the potential supply of distressed assets in other financial institutions has also raised sharply. At the same time, both the balance of defaulted bonds and the default rate have increased, and bring a large amount of high-quality restructuring and acquisition opportunities among private enterprises. It also means that the industry of distressed asset restructuring and acquisition has ushered in a new wave.
In response to the current situation, Ms. Zheng indicates that DCL will adopt “high liquidity + special situation opportunity” investment strategy. Based on the years of experience in investment, restructuring and operation of distressed assets, DCL has built a complete industry ecological chain to deeply explore the investment opportunities that has great values but currently experience the liquidity crisis or operational difficulties, increase asset value through restructuring operations, and achieve long-term stable returns.
In addition, Ms Zheng shared the thoughts on selecting the core physical assets that can generate stable cash flow, and integrating the judicial disposal capabilities, asset operation capabilities, and industrial investment banking capabilities to increase asset values based on the rigid demand of social production.
Lingling Song, the managing director of DCL Investments, shared her practice and insights in the process of distressed assets investment from market environment and case analysis aspects. DCL will continue to utilize its professional skills to improve and repair the values of core asset through judicial auction, loan to asset, bankruptcy reorganization, debt to equity swap, etc., in order to obtain safe and stable returns for the investors.
In this era with turbulent changes, black swan events happen frequently. “To construct long-term certainty in short-term uncertainty” is the investment theory that DCL has been holding since establishment. In the future, DCL will stick to this investment theory and embrace the opportunities and challenges from industrial revolution.