Research Report on Chinese Trust Industry, 2010-2011

Date: November 22, 2010
Pages: 60
Price:
US$ 2,200.00
Publisher: China Research and Intelligence Co., Ltd.
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Report type: Strategic Report
Delivery: E-mail Delivery (PDF), Online Subscription, Hard Copy Mail Delivery
ID: R5C763B1C94EN
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Research Report on Chinese Trust Industry, 2010-2011
Trust refers to the economic behavior that the trustee accepts clients’ commission to manage or deal with property and economic affairs according to the clients’ intention defined in the agreements or contracts and works in the interests of beneficiaries. Trust investment company is a kind of financial institution managing finances for others as a trustee.

In 2004, the scale of trust assets in China was only CNY 149.80 billion. In 2009, the scale rose by over 30% YOY, reaching 1,897.40 billion. With the accelerated increase in the scale of trust assets in China, its proportion in GDP is also enlarging. In 2004, the scale of trust assets only accounted for 1.1% of the GDP. In 2009, it rose to 5.7%. This suggests that Chinese trust industry enjoyed faster development than GDP in the past few years.

In 2006, Chinese trust industry earned the profit of CNY 3.90 billion. It acquired over twofold growth to reach 12.20 billion in 2009, and the profit per capita exceeded CNY 2 million. Furthermore, the proportion of commission charge of the industry in the total business revenue exceeded 50% for the first time. It indicates that the profit source and revenue structure of trust companies become more proper, the trust business is enhanced progressively and the sustainable profit-making mode tends to be mature and stable. Besides some short-term investment, the long-term shareholding investment of trust companies in some financial institutions also plays an increasingly important role, generating good and stable returns for trust companies.

After the reform of the trust industry in 2007, the function position and market value of trust companies are gradually recognized by the society. Domestic and overseas strategic investors’ inclination to invest in trust companies is enhanced obviously. By the end of 2009, seven foreign-funded financial institutions and a group of domestic notable enterprises (e.g. COFCO, China Huaneng Group, CNPC, Bank of Communications and China Construction Bank) became shareholders of trust companies. In 2008, during the outbreak of the global financial crisis and the slump of the domestic capital market, such financial institutions as securities companies, fund companies and banks all suffered criticisms on their financial products. In comparison, trust companies were under stable operation with their products being widely favored.

With the return to main business and the implementation of new rules on trust, the bond function of Chinese trust companies connecting the industrial market, money market and capital market will be fully displayed. This will enable the trust industry to acquire better development prospects. The status of the trust industry in the national economy will be further raised.

In 2009, 49 trust companies in China issued 1,172 assembled trust products and the establishment scale was about CNY 131.26 billion. The total scale of Top 10 companies was CNY 71.01 billion, accounting for 55.3% of the total scale of all trust companies. This reflects the high concentration of the industry. However, the CR10 dropped by 12% compared with the 67.31% in 2008.

In 2009, M&A events occurred frequently in Chinese trust industry. Large institutions tried to be the first to carry out the M&A in the industry. In previous three quarters of 2010, the operating revenue of Chinese trust industry amounted to CNY 10.94 billion. Among that, the interest balance was CNY 1.53 billion, accounting for 14% of the total revenue; the trust business revenue came to CNY 5.83 billion, taking up 53.3% of the total; the investment revenue was CNY 3.12 billion, taking up 28.5% of the total revenue. The scale of trust assets was CNY 2,957 billion and the profit was CNY 7.60 billion.

Though Chinese trust industry only has a history of three decades, it has experienced six governmental regulations. The volume of trust companies in China has been reduced from over 1,000 in the peak period to over 50 in 2010. With the execution of the sixth rectification, the polarization in Chinese trust industry will become more prominent. Strong trust companies will become stronger while weak ones will be confronted with the risk of elimination.

With the implementation of new policies on trust in 2007, the competition situation among trust companies in China experienced great changes: some large competitive trust companies directly changed new license plates and began to operate multiple innovation businesses of high added-value; however, most local companies and some companies in the transitional period due to various problems were faced with declining market shares and even the risk of elimination. With the operation of cross-regional business and the expectation of policy permission for trust companies to establish cross-regional branches, the trend of “the strong get stronger and the weak get weaker” in the trust industry is likely to be intensified.

On the whole, the concentration ratio of Chinese trust industry will be further improved after the reorganization. With the incessant growth of the market demand, competitive enterprises will achieve explosive growth in their scale and business. By contrast, companies with weak capital strength will be forced to exit the market or merged by strong companies. This can be demonstrated by the frequent asset reorganization in Chinese trust industry in 2009-2010.

In the present financial system of China, trust company is the only financial institution that can span the monetary, capital and direct investment markets. Trust companies have complete investment channels and flexible institutions that commercial banks, securities companies and fund management companies do not possess. Judging from the future demand, Chinese trust industry has bright development prospects. However, the trust industry is after all on the threshold in China, so it is still faced with high risks.

Through this report, readers can acquire more information:
  • Status quo of Chinese trust industry
  • Economic and policy environment faced by Chinese trust industry
  • Competition in Chinese trust industry
  • Development of Chinese trust industry by region
  • Analysis of major enterprises in Chinese trust industry
  • Development of major trust products in China
  • Factors affecting the development of Chinese trust industry
  • Prediction on development of Chinese trust industry
  • Prediction on investment opportunities in Chinese trust industry
1 STATUS OF TRUST INDUSTRY IN CHINESE NATIONAL ECONOMY

1.1 Definition and Characteristics of Trust Industry
  1.1.1 Definition
  1.1.2 Characteristics
1.2 Proportion of the Asset Scale of Chinese Trust Industry in GDP
1.3 Analysis of the Operating Environment of Chinese Trust Industry, 2009-2010
  1.3.1 Policy Environment
  1.3.2 Economic Environment

2 DEVELOPMENT OF CHINESE TRUST INDUSTRY, 2009-2010

2.1 Overview of Chinese Trust Industry, 2009-2010
2.2 Supply of Trust Products in China, 2009-2010
  2.2.1 Total Supply, 2009-2010
  2.2.2 Supply Structure, 2009-2010
2.3 Demand of Trust Products in China, 2009-2010
  2.3.1 Total Demand, 2009-2010
  2.3.2 Changes of Demand Structure, 2009-2010
  2.3.3 Development of Overseas Trust Market
2.4 Layout of Chinese Trust Industry, 2009-2010
  2.4.1 Function Positioning
  2.4.2 Organizational Form
  2.4.3 Geographical Distribution
2.5 Development Tendency of Chinese Trust Industry, 2011-2012
  2.5.1 Accelerating Quality Improvement
  2.5.2 Continuous Development of Cross-region Business
  2.5.3 Grouping Background Becomes Mainstream
  2.5.4 Funded Operation
  2.5.5 Gradual Differentiation of Market Positioning

3 ANALYSIS OF COMPETITION IN CHINESE TRUST INDUSTRY

3.1 Industry Concentration
3.2 Analysis of M&A
  3.2.1 Strategic M&A
  3.2.2 Asset Reorganization
  3.2.3 Historical Leftover
3.3 Influence of M&A on Trust Industry

4 ANALYSIS OF MAJOR TRUST PRODUCTS IN CHINA, 2009-2010

4.1 Real Estate Investment Trust
  4.1.1 Trend of Policies on Real Estate Investment Trust
  4.1.2 Development of Real Estate Investment Trust in China, 2009-2010
4.2 Company Pension
  4.2.1 Supply
  4.2.2 Demand
  4.2.3 Development Tendency
4.3 Assembled Trust
  4.3.1 Scale of Assembled Trust Products in China, 2009-2010
  4.3.2 Analysis of Fund Allocation of Chinese Assembled Trust Products, 2009-2010
  4.3.3 Analysis of Fund Application Mode of Chinese Assembled Trust Products, 2009-2010
4.4 Bank-Trust Cooperation Products
  4.4.1 Issue of Bank-Trust Cooperation Products
  4.4.2 Bank-Trust Cooperation Policies
  4.4.3 Characteristics of Bank-Trust Cooperation Products
  4.4.4 Development Tendency of Bank-Trust Cooperation Products
4.5 Innovative Business
  4.5.1 Overview
  4.5.2 Market Environment
4.6 Securities Investment Trust
  4.6.1 Overview of Securities Investment Trust Market
  4.6.2 Analysis of TOT Products and Arbitrage Products
  4.6.3 Development Tendency of Securities Investment Trust

5 ANALYSIS OF CHINESE TRUST INDUSTRY BY REGION, 2009-2010

5.1 Shanghai
  5.1.1 Status of Shanghai in Chinese Trust Industry
  5.1.2 Operation of Shanghai Trust Industry
5.2 Beijing
  5.2.1 Analysis of Major Trust Enterprises in Beijing
  5.2.2 Prediction on Development of Beijing Trust Industry
5.3 Shenzhen
  5.3.1 Characteristics of Shenzhen Trust Industry
  5.3.2 Prediction on Development of Shenzhen Trust Industry
5.4 Development of Trust Industry in Chinese Western Areas
  5.4.1 Status Quo
  5.4.2 Development Potential

6 ANALYSIS OF MAJOR ENTERPRISES IN CHINESE TRUST INDUSTRY

6.1 Shaanxi International Trust Co., Ltd
  6.1.1 Overview
  6.1.2 Operation
  6.1.3 Development Prospects
6.2 Anxin Trust & Investment Co., Ltd
  6.2.1 Overview
  6.2.2 Operation
  6.2.3 Development Prospects
6.3 China Railway Trust Co., Ltd
6.4 Beijing International Trust Co., Ltd
6.5 China Credit Trust Co., Ltd
6.6 Chongqing International Trust Co., Ltd
6.7 Shanghai International Trust Co., Ltd
6.8 SDIC Trust Co., Ltd
6.9 Fortune Trust Co., Ltd
6.10 Bank of Communication International Trust Co., Ltd
6.11 New China Trust Co., Ltd

7 ANALYSIS OF FACTORS AFFECTING CHINESE TRUST INDUSTRY

7.1 Analysis of Economic and Financial Factors
  7.1.1 Economic Factors
  7.1.2 Financial Environment
  7.1.3 Credit Risk
7.2 Analysis of Policy Factors
  7.2.1 Cooperation between Government and Trust Companies
  7.2.2 Real Estate Trust
  7.2.3 Bank-Trust Cooperation
7.3 Analysis of Market Risks in Chinese Trust Industry
  7.3.1 Market Supply and Demand Risks
  7.3.2 Competition
7.4 Other Risks
  7.4.1 Legal Risk
  7.4.2 Liquidity Risk
  7.4.3 Innovation Risk
  7.4.4 Reputational Risk
  7.4.5 Fraud Risk

8 ANALYSIS ON INVESTMENT AND DEVELOPMENT OF CHINESE TRUST INDUSTRY

8.1 Prediction on Investment Opportunities in Chinese Trust Industry, 2011-2012
  8.1.1 Overall Investment Opportunity
  8.1.2 Sub-product Investment Opportunity
  8.1.3 Investment Opportunity by Region
8.2 Prediction on Development of Chinese Trust Industry

SELECTED CHARTS

Chart Comparison of Asset Scale of Chinese Trust Industry with GDP, 2006-2010
Chart Establishment Scale of Assembled Trust Products in China, 2003-2009
Chart Fund Application Modes of Trust Products in China, 2009
Chart Investment Sectors of Assembled Trust Products in China, 2009
Chart Issue of Securities Investment Trust Products in China, 2007-2010
Chart Issue of Credit Trust Products in China, 2007-2010
Chart Issue of Shareholding Investment Trust Products in China, 2007-2010
Chart Issue of Equity Investment Trust Products in China, 2007-2010
Chart Establishment Scale of Assembled Trust Products of Major Trust Companies in China, 2009
Chart Major M&A Events in Chinese Trust Industry, 2008-2010
Chart Concentration of Chinese Assembled Funds Trust Market, 2008-2009
Chart Volume of Bank-Trust Cooperation Financing Products, Distribution of Banks and Trust Companies in Cooperation, 2009
Chart Arbitrage Products Issued by Chinese Trust Enterprises, 2009
Chart Operation of Shaanxi International Trust Co., Ltd, 2005-2009
Chart Operation of Anxin Trust & Investment Co., Ltd, 2006-2009
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