Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In <a href="https://skr.ma/mqr7w" target="_blank" rel="noopener">RMB Dual Counter Trading Is Coming - This Changes AH Relationships</a>, <a href="https://www.smartkarma.com/profiles/travis-lundy" target="_blank" data-smartkarma-citation="accounts:25" rel="noopener">Travis Lundy</a> discussed the forthcoming inclusion of RMB dual counters in the Hong Kong Southbound Connect programs.</li>
<li>This is but one of the five capital market cooperation measures <a href="http://www.csrc.gov.cn/csrc/c100028/c7474875/content.shtml" target="_blank" rel="noopener">announced</a> by the CSRC last Friday. </li>
<li>The other four measures include ETFs, improving mutual recognition of funds, increasing China IPOs in Hong Kong, and the inclusion of REITs. This insight discusses the latter.</li>
</ul>


In RMB Dual Counter Trading Is Coming - This Changes AH Relationships, Travis Lundy discussed the forthcoming inclusion of RMB dual counters in the Hong Kong Southbound Connect programs.
This is but one of the five capital market cooperation measures announced by the CSRC last Friday. 
The other four measures include ETFs, improving mutual recognition of funds, increasing China IPOs in Hong Kong, and the inclusion of REITs. This insight discusses the latter.


Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-13022'>Anton Oilfield</a></li><li><a href='#lucror-entity-8954'>Greentown China</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.Anton OilfieldGreentown China

Morning Views Asia: Anton Oilfield, Greentown China

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.<ul><li><a href='#lucror-entity-29012'>Adani Green Energy</a></li><li><a href='#lucror-entity-28320'>Azure Power Global Ltd</a></li><li><a href='#lucror-entity-35794'>Greenko Energy Holdings</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.Adani Green EnergyAzure Power Global LtdGreenko Energy Holdings

Morning Views Asia: Adani Green Energy, Azure Power Global Ltd, Greenko Energy Holdings

Yuexiu Real Estate Investment Trust / Credit

Yuexiu Real Estate Investment Trust (405 HK)

Yuexiu REIT's FY 2023 results were acceptable in our view, as earnings from its hotels and retail assets recovered y-o-y on the back of China's resumption of economic activities following the pandemic. This was partly offset by lower earnings from its office buildings. The overall portfolio occupancy rate improved in H2, but was down marginally amid weakness in the office segment. Net debt decreased in H2, but was largely stable. Positively, the portfolio asset valuation was largely unchanged at CNY 42.6 bn. That said, the financial profile remains moderately weak. We view refinancing risk as manageable, considering Yuexiu REIT's healthy access to funding and large proportion of unencumbered assets. It will likely continue refinancing offshore floating-rate debt with onshore fixed-rate borrowings, which could help stem FX losses and lower interest costs. We revise our fundamental Credit Bias to "Stable" from "Negative", and move our trade recommendation to "Buy" from "Hold" on the YXREIT 2.65 '26s.

  Yuexiu REIT's FY 2023 results were acceptable in our view, as earnings from its hotels and retail assets recovered y-o-y on the back of China's resumption of economic activities following the pandemic. This was partly offset by lower earnings from its office buildings. The overall portfolio occupancy rate improved in H2, but was down marginally amid weakness in the office segment. Net debt decreased in H2, but was largely stable. Positively, the portfolio asset valuation was largely unchanged at CNY 42.6 bn. That said, the financial profile remains moderately weak.   We view refinancing risk as manageable, considering Yuexiu REIT's healthy access to funding and large proportion of unencumbered assets. It will likely continue refinancing offshore floating-rate debt with onshore fixed-rate borrowings, which could help stem FX losses and lower interest costs.   We revise our fundamental Credit Bias to "Stable" from "Negative", and move our trade recommendation to "Buy" from "Hold" on the YXREIT 2.65 '26s.  

Yuexiu REIT - Earnings Flash - FY 2023 Results - Lucror Analytics

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>On 21 February, <a href="https://www.bloomberg.com/news/articles/2024-02-21/esr-owners-said-to-mull-options-for-5-billion-logistics-firm?embedded-checkout=true" target="_blank" rel="noopener">Bloomberg reported</a> that due to the steep share price declines, major <a href="https://www.smartkarma.com/entities/esr-group-ltd" target="_blank" data-smartkarma-citation="entities:27983:1" rel="noopener">ESR Group (1821 HK)</a> shareholders are considering options for their stakes, including ESR’s privatisation.</li>
<li>The reports also noted buyer interest in ESR’s significant assets. Past share dealings suggest that Warburg Pincus and the co-founders are the likely consortium to lead a potential privatisation. </li>
<li>The offer probability is low as a scheme would likely require a HK$16.00 offer, posing a funding challenge. Nevertheless, the upside remains as ESR trades at an undemanding valuation. </li>
</ul>


On 21 February, Bloomberg reported that due to the steep share price declines, major ESR Group (1821 HK) shareholders are considering options for their stakes, including ESR’s privatisation.
The reports also noted buyer interest in ESR’s significant assets. Past share dealings suggest that Warburg Pincus and the co-founders are the likely consortium to lead a potential privatisation. 
The offer probability is low as a scheme would likely require a HK$16.00 offer, posing a funding challenge. Nevertheless, the upside remains as ESR trades at an undemanding valuation. 


ESR Group (1821 HK): Evaluating a Potential Privatisation

Hong Kong

Yuexiu Real Estate Investment Trust is a Hong Kong-listed real estate investment trust primarily engaged in the leasing of commercial properties in mainland China. Its portfolio includes Grade-A offices, commercial complexes, retail businesses, hotels, serviced apartments, and professional clothing markets. The company is headquartered in Wanchai, Hong Kong, and was incorporated in 1997.

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Yuexiu Real Estate Investment Trust (405 HK)

HK REITs Re-Rate On Southbound Inclusion

Stick to a basket of Hong Kong-focused REITs. I'd tilt to those HK-REITs which are not 100% exposed to the office-space, such as Link REIT (823...

David Blennerhassett

Morning Views Asia: Anton Oilfield, Greentown China

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

Morning Views Asia: Adani Green Energy, Azure Power Global Ltd, Greenko Energy Holdings

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

Yuexiu REIT - Earnings Flash - FY 2023 Results - Lucror Analytics

Yuexiu REIT's FY 2023 results were acceptable in our view, as earnings from its hotels and retail assets recovered y-o-y on the back of China's...

Lucror Analytics

ESR Group (1821 HK): Evaluating a Potential Privatisation

The offer probability is low as a scheme would likely require a HK$16.00 offer, posing a funding challenge. Nevertheless, the upside remains as ESR...

Arun George

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