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<p align="justify">China Cindy Asset Management (CCAM) is the Chinese state-owned entity known as China Cinda. The company was founded in 1999 and is headquartered in Bejing, China. The company operates through its many subsidiaries, including Nanyang Commercial Bank, Cinda Securities, Jingu Trust, Cinda Financial Leasing, Cinda Hong Kong, Cinda Investment, and Zhongrun Development. The company has a presence in many domains related to financial services, but its primary business is non-performing assets management. China Cinda focuses on problematic asset investment and problematic institution assistance and strives to resolve the risk of non-performing assets of financial institutions and entities. The company is listed on Honk Kong Stock Exchange and has 13,000 employees (Cinda, 2021). CCMA forms part of the &#8220;Big-Four&#8221; state-owned bad banks. The company has a philosophy of professional management and value creation and utilizes that to prevent and resolve financial risk. Porter&#8217;s five forces model is a helpful tool to analyze the financial risk China Cinda is exposed to and opportunities it can potentially exploit.</p>
<h2 align="justify">Competitive Rivalry in the Market</h2>
<p align="justify">The company operates in a diversified financials industry, and there moderate to high competition exists. China has a strong and regulated financial infrastructure to support its tremendous economy. The company&#8217;s main rivals are Orient Securities and China Huarong Asset Management (CHAM). China Cinda has a market cap of $7.4 billion and reported a profit of $1.9 billion while recording revenue of $11.1 billion in 2020 (Forbes, 2021). In the same year, Orient Securities earned $ 2 billion and reported a profit of $0.3 billion (Forbes, 2021). In 2020, CHAM had a market valuation of $4.4 billion, and they earned a profit of $0.21 billion on revenue of $12.9 billion (Forbes, 2021). China&#8217;s assets management industry is expected to multiply and attract more large institutes to an already competitive market. Therefore, the market is highly competitive.</p>
<h2>Threat of Substitutes</h2>
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<p align="justify">The financial services industry has an essential role in society in terms of value creation and managing finances. The industry has evolved with time and made progress, but it is lagging the technological progress. Instead of being at the forefront, the industry is chasing it. The industry is going through a severe transformation, and the digital age accelerated the progression. The traditional firms need to adapt and reposition themselves to survive, or they will be left behind. The landscape is growing in the country, and China&#8217;s fintech scene is vibrant, and it has outperformed at the global stage (Mittal, 2021). The technology companies are leveraging the data and trying to disrupt the incumbents. Traditional institutes are surviving because they are offering more products in comparison; startups are only offering one. Incumbents are monitoring closely and trying to fend off competition. As of now, there is no better alternative available in the short term.</p>
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<h2>The Threat of New Entrants</h2>
<p align="justify">The financial services industry poses inherent challenges for newcomers to arrive and thrive.There vital factors that prevent most newcomers are strict regulatory requirements, and the other is the high initial capital requirement. The industry requires regulations to protect the public interest, but it has been overly regulated, and especially in China, there is an extra layer of scrutiny associated with it. The state has strict monitoring and compliance division that ensure the application of the framework. China is trying to put more regulations on the industry to comply with (Reuters, 2018). Moreover, there are rules to deter foreign investments in the banking sector. The high return on investments attracts more investments and competition in the industry. The other major deterrent is the industry&#8217;s capital-intensive nature; a significant funds requirement at inception causes real problems for the newcomers. With the factors described above, the threat remains moderate to low.</p>
<h2>Bargaining Power of Buyers</h2>
<p align="justify"> Buyer&#8217;s bargaining power depends on the underlying factors such as buyer&#8217;s concentration, buyer&#8217;s ability to substitute, buyer&#8217;s switching costs, buyer&#8217;s information availability, and price sensitivity. China is the most populated country and still has the mega financial infrastructure supported by public and private sector entities. The presence of available companies and low switching costs is one reason buyers have higher bargaining power (Klemperer, 1995). Another reason buyers can affect business profit is owing to the undifferentiated nature of products on offer. The products are similar at the core, and similarity makes it difficult to create brand loyalty. Customers are susceptible to pricing and can be easily lost due to small changes in the price. Ought to the reason detailed above, the consumer can exert high bargaining power.</p>
<h2>Bargaining Power of Supplier</h2>
<p align="justify">In the industry, bargaining power depends on the availability of alternatives, competition in the market, supplier concentration, and switching cost. Generally, suppliers can exercise moderately to low bargaining power. There are three primary sources of supply input from direct customers, assets of institutional investors, and financial professionals. Institutional investors seek a higher return and only invest in high perfuming funds, and there are additional caveats attached with their money. Retail investors are either a small group of individuals or high net worth individuals; both segments know their importance to the business, thus can exercise higher bargaining power. Supplier&#8217;s awareness of their importance to the business supply chain is the reason for higher bargaining power (Crook &; Combs 2007). At last, financial professionals are in abundance and are willing to work the grid to get a good exposure. Overall, suppliers have moderate to increased bargaining power.</p>
<h2 align="left">References</h2>
<p align="left">Cinda. (2021). About Cinda. Available at: http://www.cinda.com.cn/xdjt/gyxd/gsjs/gsjj/list.shtml<br />
Crook, T. &; Combs, James. (2007). Sources and consequences of bargaining power in supply chains. Journal of Operations Management. 25. 546-555. 10.1016/j.jom.2006.05.008.<br />
Forbes. (2021). China Cinda Asset Management. Available at: https://www.forbes.com/companies/china-cinda-asset-management/?sh=205d441e502d<br />
Forbes. (2021). Orient Securities China Huarong Asset Management. Available at: https://www.forbes.com/companies/china-huarong-asset-management/?sh=4a03db8e2872<br />
Forbes. (2021). Orient Securities. Available at: https://www.forbes.com/companies/orient-securities/?sh=1773b8934d7f<br />
Klemperer, P. (1995). Competition when Consumers have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade. The Review of Economic Studies, 62(4), 515-539. doi:10.2307/2298075<br />
Mittal, S. (2021). China’s fintechs disrupt the world. DBS insights. Available at: https://www.dbs.com/insights/chinas-fintechs-disrupt-world.html<br />
Reuters. (2018). China steps up regulations on wealth management products, asset management business. Available at: https://www.reuters.com/article/us-china-regulation-idUSKBN1KA19C</p>
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