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Chris Chow Show
Australia
เข้าร่วมเมื่อ 20 ธ.ค. 2020
Hello! My name is Chris and every Thursday, I share a new video about personal finance, investing and saving money.
I'm a marketing manager working in Sydney, Australia. I have worked at Apple, Microsoft and HP in a variety of marketing roles.
Disclaimer: I am not a financial adviser, this is not financial advice. This video and my channel is for general information only, as with anything in life you should do your due diligence and seek independent advice.
I'm a marketing manager working in Sydney, Australia. I have worked at Apple, Microsoft and HP in a variety of marketing roles.
Disclaimer: I am not a financial adviser, this is not financial advice. This video and my channel is for general information only, as with anything in life you should do your due diligence and seek independent advice.
EVERGRANDE crisis explained | Impact of China's Evergrande crisis on Australia
So you might have heard the name Evergrande appearing in the news lately. Well in this video I’m going to be doing a deep dive into the company and the crisis it’s facing, I’ll also give you some context into the Chinese property market and lastly share how this might impact your investments.
0:00 Introduction
1:35 China's real estate sector
5:24 Evergrande business model
9:36 What happens to Evergrande
12:22 Impact on Australian investors
--------
Referral links^
📈 Stake: hellostake.com/referral-program?referrer=christopherc699
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😋 Liven: app.liven.com.au/n5I1CFwhLfb
🤝 BE MY FRIEND 🤝
Facebook - ChrisChowShow
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*Disclaimer: I am not a financial adviser, I am not an accountant, I am not a tax adviser. This video and my channel is for general information only, as with anything in life you should do your due diligence and seek independent advice.*
^I may earn a small commission if you use my referral links, your purchase helps support my TH-cam channel.
--------
So Evergrande aka 恒大集团 is the second largest property developer in China by sales and was founded by businessman Xui Jia Yìn in 1996.
Fast forward to October 2009, the company went public on the Hong Kong Stock exchange and raised $722 million at IPO. Most recently the company stated that it had 1,300 projects in over 280 cities in China.
Although property development has been Evergrande core business, it has also diversified into wealth management, amusement parks, electric vehicles, health care, bottled water which fun fact had Jackie Chan as an ambassador and even a soccer team - the Guangzhou Evergrande Football Club which it co owns with Alibaba.
And according to Forbes, the Evergrande group has 125,000 employees around the world.
Now that you’ve had a crash course into the Chinese real estate sector, let’s dig into Evergrande’s business model.
Now the construction industry is known to be very capital intensive. This means you need a lot of capital aka money in order to build buildings and sell them for a profit when they are completed. This is why most construction companies will borrow money from banks and institutional investors in order to fund their operations and start the building project.
Evergrande also did this but they went cray cray and just took on all the debt - like $300 billion USD in debt
So Step 1: borrow money
Step 2: buy land for the development with the borrowed money and cash.
Step 3: get building materials from suppliers and hire contractors but tell them both that you will pay them later once the project is finished
Step 4: build the homes and then sell them at sky high prices
Step 5: pay the suppliers and the contractors
Step 6: pay the interest on the borrowed money
Step 7: start a presale of the next project so you take deposits from home buyers
Step 8: use the profit to start the next project
And repeat all the steps and you’re basically printing money.
Constantly repeating this loop can work as long as everything is in order and the value of property prices keeps rising and Evergrande can keep paying off the interest on all the debt it has.
Let’s talk about the crisis that Evergrande finds itself in - so in August 2020, the Chinese government announced the three red lines policy aimed at reining in debt ridden property developers and to make real estate more affordable for the average Chinese family.
I won’t go into detail what each of the 3 red lines are but Evergrande crossed all 3 lines which means that it was banned from borrowing anymore money to pay off it’s old debt. This meant that it’s business model was broken and out of desperation Evergrande started offering steep discounts on it’s properties in order to keep cash flowing into the business - but it was ultimately too late.
Homebuyers, investors, suppliers and employees were so worried about Evergrande’s financial situation that they’ve been protesting at Evergrande’s offices in several Chinese cities.
Shareholders were also also spooked as Evergrande’s share price has plummeted by 80% since the start of the year.
This crisis has landed Evergrande on the brink of collapse as it’s falling behind on its debt payments and could be at risk of defaulting. If it defaults and goes bankrupt, then it could lead to widespread financial disaster in China - we’re talking millions of homes left unbuilt, homebuyers will be left without homes that they paid for, banks and investors would be lose their investments, suppliers and contractors could also go bankrupt and hundreds of thousands of employees could lose their job.
0:00 Introduction
1:35 China's real estate sector
5:24 Evergrande business model
9:36 What happens to Evergrande
12:22 Impact on Australian investors
--------
Referral links^
📈 Stake: hellostake.com/referral-program?referrer=christopherc699
🛍️ Cashrewards: refer.cashrewards.com.au/x/KqbMLr
😋 Liven: app.liven.com.au/n5I1CFwhLfb
🤝 BE MY FRIEND 🤝
Facebook - ChrisChowShow
Instagram - chrischowshow
TikTok - www.tiktok.com/@chrischowshow
Twitter - ChrisChowShow
*Disclaimer: I am not a financial adviser, I am not an accountant, I am not a tax adviser. This video and my channel is for general information only, as with anything in life you should do your due diligence and seek independent advice.*
^I may earn a small commission if you use my referral links, your purchase helps support my TH-cam channel.
--------
So Evergrande aka 恒大集团 is the second largest property developer in China by sales and was founded by businessman Xui Jia Yìn in 1996.
Fast forward to October 2009, the company went public on the Hong Kong Stock exchange and raised $722 million at IPO. Most recently the company stated that it had 1,300 projects in over 280 cities in China.
Although property development has been Evergrande core business, it has also diversified into wealth management, amusement parks, electric vehicles, health care, bottled water which fun fact had Jackie Chan as an ambassador and even a soccer team - the Guangzhou Evergrande Football Club which it co owns with Alibaba.
And according to Forbes, the Evergrande group has 125,000 employees around the world.
Now that you’ve had a crash course into the Chinese real estate sector, let’s dig into Evergrande’s business model.
Now the construction industry is known to be very capital intensive. This means you need a lot of capital aka money in order to build buildings and sell them for a profit when they are completed. This is why most construction companies will borrow money from banks and institutional investors in order to fund their operations and start the building project.
Evergrande also did this but they went cray cray and just took on all the debt - like $300 billion USD in debt
So Step 1: borrow money
Step 2: buy land for the development with the borrowed money and cash.
Step 3: get building materials from suppliers and hire contractors but tell them both that you will pay them later once the project is finished
Step 4: build the homes and then sell them at sky high prices
Step 5: pay the suppliers and the contractors
Step 6: pay the interest on the borrowed money
Step 7: start a presale of the next project so you take deposits from home buyers
Step 8: use the profit to start the next project
And repeat all the steps and you’re basically printing money.
Constantly repeating this loop can work as long as everything is in order and the value of property prices keeps rising and Evergrande can keep paying off the interest on all the debt it has.
Let’s talk about the crisis that Evergrande finds itself in - so in August 2020, the Chinese government announced the three red lines policy aimed at reining in debt ridden property developers and to make real estate more affordable for the average Chinese family.
I won’t go into detail what each of the 3 red lines are but Evergrande crossed all 3 lines which means that it was banned from borrowing anymore money to pay off it’s old debt. This meant that it’s business model was broken and out of desperation Evergrande started offering steep discounts on it’s properties in order to keep cash flowing into the business - but it was ultimately too late.
Homebuyers, investors, suppliers and employees were so worried about Evergrande’s financial situation that they’ve been protesting at Evergrande’s offices in several Chinese cities.
Shareholders were also also spooked as Evergrande’s share price has plummeted by 80% since the start of the year.
This crisis has landed Evergrande on the brink of collapse as it’s falling behind on its debt payments and could be at risk of defaulting. If it defaults and goes bankrupt, then it could lead to widespread financial disaster in China - we’re talking millions of homes left unbuilt, homebuyers will be left without homes that they paid for, banks and investors would be lose their investments, suppliers and contractors could also go bankrupt and hundreds of thousands of employees could lose their job.
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My wife 29 years old .they take out as much superannuation as tax. So she don't get her money till she 67 years old. This is total fraud steeling. It's called legal crinamalization. It just another way like gst to steel people money
Any links to which funds and unions are aligned?
Thank you Chris! I am a migrant and I have no idea about Super money. I would like to know the basic and how I contribute to it at most
Hi there how to invest in bitcoin and how to invest in index fund ?
1% to 1.35 % is pa? for low rick options
Thank you!
What a scam super is get taxed with your income and you super account plus their grubby admin fees working for the fat cats to feed off....Shameful greedy grubs.
Super simple guide for int. students! Thanks for the hard work
Nice Hokusai in the background
The best investment platforms you find on every crypto wallet, that have low charging fees and high profit rates are Funds Trust an TX, Thank me later..
Can I open salary account in ING
Excellent video. Much appreciated.
What does it mean when I search for IVV there is an Australian and US option? Which do I pick?
Great video, super informative!
Can you please explain over the counter fees? And other fees as well. Thanks
Hello! I am Sophia Green. A Marketer and a Crypto-Ethusaist. 2 Months ago,just the same way I dropped this post, I guided 8 persons that chatted me up to a platform where they invested into Airlines and Real Estate with a Cryptocurrency affiliate firm..$10,000 profit $100,000 in 12 months.Dm for more info... Lina Witherspoon
Hey Chris - Would it be reasonable to build a portfolio using both a “one stop shop” ETF such as VSHG as well as other Vanguard ETFs such as VAS, VGS etc. ?
You would think if you want to invest long term you would want a group that give better dividends than these
What do u think of ioz sir?
I’ve just stumbled across this channel..fantastic content
Good job mate
You got that spot on. This country is boring, so save and don't spend on meaningless things that don't satisfy you. Australia is expensive and boring so save you're money so you can spend it on traveling that you enjoy. This place is so boring because its got nothing out of this world.
It's only as boring as you make it. Explore the country - and I mean outside the major cities - and experience the true beauty of our nation.
Thank you. That was really helpful.
do you have a video for the best bank with multiple currencies that is great for ecommerce
Try crown casino... got your name written all over it !
None of them seem that attractive....maybe the property market is more safer? Maybe???
How do you go about investing in index funds…could you do a video on this please?
I miss you buddy
What if you have bad credit and was recommended to get a credit card to help rebuild my credit score. Then what cards would be my option?
Hi Chris thanks so much for your video. It’s been extremely helpful. I just had a question - I’ve recently started a crystal / spiritual shop. My website isn’t live yet however I have had to start travelling to out source products and things. Can I claim travel expenses ( flights, inventory etc) at this early stage? Thanks again Chris
Sorry just to add onto this. I’ve need to do several courses / wellness retreats/ treatments. Can I claim these to :)
As always well presented and informative... Are there fees for exciting one super to move to another better performing super fund?
Great Video 👍
Is there a minimum to invest in vanguard
depend, buy ETF version and there is none, but buy directly into the index fund itself then yes
Hi Chris, Thank you for your video.... sent it to my daughters who are getting started on ETF investing in Australia. What do you think of VTS and A200 ETFs? I like them for their low expense ratio of 0.04 and 0.07 respectively...
CBA 👍SHL👌XRO 🤔WES 😄WOW 🤨🙏
Glad I watched this! Am already invested in the first 2 options but gives me something else to look at over time
Want to get a Asia etf but what be best? Betashares Asia technology asia Ishares asia 50 iaa Pm capital Asian opportunities paf Vanguard Asia etf vae Cheers
wisdom is not from lots of views, thanks for your suggestion Chris. I will investigate further. Please making videos.
hey guys, my name is Cassio I'm Brazilian and I don't live in Australia, I want to know how the taxation on day trade in futures in Australia for foreigners works
thank you mate.
Thank you. Is there a video on Tax language? Lol... Like offset, margin etc lol
hi, thank you for your video. liked it
What's the best credit cards for international students??
I have a referral code for AMEX that will allow you to have an annual fee-free for life (Qantas AMEX). I do get additional Qantas points if you sign up. Let me know if you need it. I find it beneficial to shop groceries with AMEX and when you accumulate all the Qantas points, you can use it to travel around (either for free depending on how you spend or reduce the price of your air tickets and other Qantas membership).
Just came across your channel :) great work mate keep it up, looking forward to the next vid
You don't think some undervalued growth stocks would have been a good choice? I do agree with your choice of SHL...ageing population. But that's probably it. Good video though, cheers.
He invests in ETFs he is obviously a very conservative investor - probably not the right channel for moonshots
Great explanation.
Thanks a lot Chris for the great video! Do you know if Australian residents can purchase European domiciled ETFs? (ETFs listed in Germany for example) I'm originally from Europe and want to purchase European listed ones if possible but currently live in Australia. But I'm not sure if that's allowed... I'm using Degiro as a platform.
Good video Chris just subscribed
Why ETF? Why not diversified TIF Vangaurd 500 admiral with 0.04% fee and hold for long term. Please also make video on traditional index funds. Thanks
ING Is fantastic for everyday transactions. They are absolutely terrible for anything to do with loans. Personal loans they say will be approved in hours can take weeks. As for home loans they are even worse. Although they have no branches you can do counter transactions at any Australia Post office.
good job mate