podcastnewsletterAbout

Brandon Emmerich

Brandon Emmerich

Principal
Granite Peak Advisory
  • Principal at Granite Peak Advisory. He helps institutional investors understand China’s financial markets and economy. 
  • Additionally, his data-driven research has been cited in the Financial Times, Wall Street Journal, New York Times, and Dow Jones Newswire.

Brandon is a principal at Granite Peak Advisory. He helps institutional investors understand China’s financial markets and economy. Additionally, his data-driven research has been cited in the Financial Times, Wall Street Journal, New York Times, and Dow Jones Newswire.

Brandon completed his graduate study of physics at the University of Illinois at Urbana-Champaign. He lived in China for several years and speaks fluent Mandarin Chinese.

Granite Peak Advisory

We help institutional investors understand China

Channels

AsiaStrat
Granite Peak Advisory
Track Research
Trivium China
Gao Feng
Real Estate Foresight
China Beige Book

All Analyses by

Brandon Emmerich

What Hiring Activity Says About Firm Valuations in China

How does an obscure factor like hiring practices impact firm valuation? That was the question posed by Deutsche Bank’s quant strategy group in a 2015 whitepaper titled, “Macro and Micro Jobenomics.” The report concluded that online job postings could be used to predict U.S. macroeconomic statistics and equity market returns. This piqued my interest – I wondered whether a similar process could be used for valuing A-share companies in China.

Novel Data on China's Auto Loans - An Inefficient Market

The continued growth of China’s auto sales has relied increasingly on consumer credit, according to the WSJ; but, granular data is hard to come by. So, we created a process to collect, clean, and structure data from online auto loan offerings. Our findings imply that the auto loan market, like many credit markets in China, runs on two parallel tracks, and is woefully inefficient.

Novel Data on China's Mortgage Loans

China’s banks are directed by the state, without irony, to “vigorously promote reasonable home ownership.” Their most recent annual reports repeatedly bury in the notes this line, or some variant of it, as an explanation for the explosion of mortgage lending over the previous 12 months. Granular mortgage data however, is hard to come by – so we created a process to collect, clean, and interpret that information.

China's unsolved liquidity risk

The question we should ask ourselves is, how many of China’s corporate borrowers are paying off existing debt with new debt?

Predicting Chinese stock returns

Outside observers paint China’s stock markets as a casino, where picking stocks requires as much skill as roulette, and investors avoid the country in their portfolio allocations. Patterns exist, however, if you know where to look.

China's stock markets—are there any patterns?

'I find evidence for dramatic size and momentum effects; that is, small stocks and recent winners are the top performers in China’s stock market. Additionally, I find that high-beta stocks modestly underperform low-beta stocks.'

China's higher rates don't matter, yet

In fact, high yields still haven’t filtered down to borrowers. Using industrial enterprise economic indicators data, I estimated the actual interest rate paid by Chinese borrowers. Over the past six months – as corporate bond yields, SHIBOR, and WMP yields all rose dramatically – the actual interest paid by China’s industrial enterprises fell to an all-time low.

A new framework for china's debt problem

In fact, high yields still haven’t filtered down to borrowers. Using industrial enterprise economic indicators data, I estimated the actual interest rate paid by Chinese borrowers. Over the past six months – as corporate bond yields, SHIBOR, and WMP yields all rose dramatically – the actual interest paid by China’s industrial enterprises fell to an all-time low.

An inflection point in china's systemic risk

Additionally, given the incentives of regulated institutions everywhere, it is likely that risks have simply begun to migrate to new and more opaque parts of the balance sheet. As China watchers, we should prepare for yet another game of financial risk whack-a-mole.

Clearing up a few misconceptions on China's capital flight

Last year, I debunked a popular measure of trade misinvoicing as the culprit for China’s capital outflows. Today, let’s scrutinize two other misconceptions bouncing around the China commentator echo chamber.