< The 2014 All-China Research TeamRan (Richard) XuMorgan StanleyFirst-place appearances: 0

Total appearances: 1

Analyst debut: 2014Ran (Richard) Xu makes an impressive debut on this roster, claiming second place. The Morgan Stanley analyst “provides value-added research into the real interest rates that the Chinese economy faces,” asserts one buy-side supporter. “This is a much better indicator of system liquidity and banking sector health than published interest rates.” China’s banking shares declined by 6.5 percent during the 12 months through late November, trailing the domestic broad market by 4.3 percentage points, but Xu is constructive on the group. He anticipates that reforms, such as those regarding local government debt management and the capital markets, can help improve credit-allocation efficiency and cites monetary policy that “helps contain shadow-banking risks and reduce interest rates without acceleration in liquidity injections.” Moreover, increased recognition of nonperforming loans, along with healthy returns on equity, will result in the “smooth” digestion of high-risk loans over time and curtail long-term systemic risks, adds Xu, who works out of Hong Kong. The researcher’s favorite name in this space is Beijing-headquartered Agricultural Bank of China, one of the Big Four state-owned banks. The nation’s second-largest mainland-listed company, by market capitalization, boasts robust income and deposit growth in rural regions, he explains, as well as ample loan-loss reserves to cushion earnings during the country’s “economic transition period” and more “rational” asset growth in recent years, which has helped management balance credit risks and earnings growth.