China Financial Stocks Tied To RMB Reform That Retail Investors May Be Missing

China’s push to expand offshore renminbi finance and reduce reliance on the US dollar is reshaping how capital flows through its banking and securities systems. For investors, that mix of reform, new liquidity tools, and rising geopolitical tension can mean fresh opportunities alongside new types of risk. This article looks at three stocks from an Emerging Market Financials screener that are closely exposed to these policy moves, focusing on how their roles in China and Hong Kong’s financial hubs might be helped or hurt as RMB internationalization and market opening progress.

Pacific Securities (SHSE:601099)

Overview: Pacific Securities is a China based securities firm that runs a broad mix of brokerage, margin finance, proprietary investment, investment banking, and asset management services, connecting individual and institutional clients to capital markets and financial products.

Operations: Pacific Securities currently generates reported revenue of about CN¥1.27b entirely from China.

Market Cap: CN¥22.97b

Pacific Securities sits at the intersection of China’s push for offshore renminbi finance and Shanghai’s growth as a global financial center. Its fundamentals send a mixed message that investors may wish to unpack carefully. Forecast earnings growth is described as strong, but recent results show pressure, with Q1 2026 revenue and net income both down year on year and full year 2025 net profit slipping despite broadly stable revenue. The stock trades on a very high P/E multiple, which looks demanding alongside a low 1.7% return on equity and funding that depends entirely on higher risk external borrowings. At the same time, the company’s position in core capital markets businesses and its exposure to China’s financial reforms mean there is more to weigh up than headline valuation alone.

Pacific Securities’ high P/E and pressured recent results raise big questions about what the market is really pricing in. Sense check that optimism against the analysis report for Pacific Securities and the one factor investors might be missing.

China Cinda Asset Management (SEHK:1359)

Overview: China Cinda Asset Management is a Beijing headquartered financial asset manager that specialises in buying, managing, and disposing of distressed loans and other troubled assets, while also offering a wide range of financial services such as banking, securities dealing, asset management, leasing, and real estate related investments in China and abroad.

Operations: China Cinda Asset Management generates most of its revenue from the Distressed Asset Management segment at about CN¥8.36b and Financial Services at about CN¥13.55b, partly offset by eliminations of roughly CN¥1.0b.

Market Cap: HK$36.64b

China Cinda Asset Management gives you direct exposure to China’s push to clean up bad debts and expand offshore renminbi finance, with earnings and revenue both forecast to grow at roughly 20% a year and profit margins already improving. At the same time, a relatively high P/E, a large recent non recurring loss of about CN¥12.0b, weak cash flow cover for debt, and an unsteady dividend record mean the quality of those earnings deserves close scrutiny. Add concerns around board independence and frequent director changes, and you have a stock where potential upside from financial reforms sits right alongside governance and balance sheet questions that investors should not ignore.

Accelerating revenue and earnings forecasts at China Cinda Asset Management only tell part of the story, especially with that CN¥12.0b non recurring loss on the table. Get the full picture with the 1 key reward and 3 important warning signs (1 is major!)

Bank of East Asia (SEHK:23)

Overview: The Bank of East Asia is a Hong Kong headquartered bank that provides a full range of retail, corporate and wealth management services, including loans, deposits, credit cards, RMB services and investment products across Hong Kong, Mainland China and several other Asian markets.

Operations: Bank of East Asia generates most of its revenue from Hong Kong Operations, with Personal Banking at HK$6.87b, Treasury Markets at HK$1.62b and Wealth Management at HK$1.31b, alongside HK$3.53b from Mainland China Operations and HK$2.28b from Overseas, Macau and Taiwan.

Market Cap: HK$33.50b

Bank of East Asia sits at the heart of Hong Kong’s RMB and cross border banking system, so China’s push to expand offshore renminbi finance and open markets is a key factor to watch for its earnings and revenue outlook. Yet the story is not one sided, with a relatively high P/E, a sizeable 2.7% bad loans ratio and a low 41% allowance for those loans, plus an unstable dividend record and a recent crackdown on mainland client flows all giving investors real questions to weigh. The real interest lies in how these growth prospects, credit risks and governance patterns fit together for a bank trading below estimated fair value but still priced above many local peers.

Bank of East Asia’s combination of cross border RMB reach, higher P/E, and credit questions suggests a story the market may be misreading. Get the context that pulls these threads together in the analysis report for Bank of East Asia

The three stocks covered here are just a starting point, with the full Emerging Market Financials screener surfacing 11 more companies that share similarly compelling capital markets and RMB reform narratives inside the Emerging Market Financials screener. Use Simply Wall St to identify and analyze the specific catalysts, balance sheet strength, and reform linked themes that matter most to you so you can focus on your highest conviction ideas in this space.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data
and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your
financial situation. We aim to bring you long-term focused analysis driven by fundamental data.
Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
Simply Wall St has no position in any stocks mentioned.

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