Huge valuation mismatch for China's Big Four banks despite headwinds amid Covid-19

ABOUT two months ago, China shut down its economy to tackle the outbreak of Covid-19. Malls, restaurants and factories were closed; travel bans were imposed, and all that brought much of the nation's economic activity to a halt.

While the number of newly reported cases in China has fallen dramatically, the economic impact of the outbreak has sent shock waves across most businesses and supply chains. Retail sales and industrial production were stopped abruptly, and many companies struggled to stay afloat.

This suggests that many companies likely face difficulties servicing their loans, especially those that are reliant on their monthly operating cash flow to pay for their liabilities.