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Smartkarma Daily Briefs

Jul 05
0

Daily Brief Consumer: Li Auto, Costa Group Holdings, Perfect Medical Health, Kao Corp, Rakuten Group , Yachiyo Industry, Shenzhou Intl Group Holdings, Fenbi Ltd, PDD Holdings Inc and more

By | Consumer, Daily Briefs

In today’s briefing:

  • Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?
  • Costa Group (CGC AU): Paine Schwartz Wants It Back
  • Perfect Medical Management FY23 Concall: Highlights Bright Outlook for FY24, Aggressive Expansion
  • Kao (4452) | Is It Time to Buy This Dividend Aristocrat?
  • Rakuten: An Attractive Value Opportunity After 80% Value Decline in 8 Years
  • Yachiyo Industry (7298 JP): Honda’s Pre-Conditional Tender Offer
  • Costa Group (CGC AU): Paine Schwartz’s Indicative Proposal
  • Shenzhou (2313 HK): Contract Mfr for Leading Sportswear Brands Facing Challenging Demand Outlook.
  • Fenbi (2469 HK): Rightfully Sold, Wrongfully Punished
  • [PDD (PDD US, BUY, TP US$88) TP Change]: Facing Stiff China Competition and Rising Temu Costs

Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?

By Brian Freitas

  • We finally got to 80 Hang Seng Index constituents in June. Now comes the next step of moving up to 100 index constituents though there is no timeline for completion.
  • The conclusions of the market consultation on the inclusion of foreign stocks in the Hang Seng Index should be announced soon though implementation could start only in December.
  • We highlight 10 potential inclusions to the index with passive trading impact varying from 1.5-5.6 days of ADV. There are large shorts on some of the stocks.

Costa Group (CGC AU): Paine Schwartz Wants It Back

By Brian Freitas

  • Costa Group Holdings (CGC AU) listed in 2015 when Paine & Partners sold 40% of its stake in the company.
  • Paine Schwartz Partners bought a 13.84% stake last year, increased it in March, and has now made an offer to buy out the remaining shares at A$3.5/share in cash.
  • Short interest was over nearly 11 days of ADV to cover and short covering could take the stock higher sooner. This is a buy here.

Perfect Medical Management FY23 Concall: Highlights Bright Outlook for FY24, Aggressive Expansion

By Sameer Taneja

  • We spoke with the management of Perfect Medical Health (1830 HK). The key highlight is a steady recovery for FY24e and an overall expansion of 60% in three years. 
  • Expansion plans in HK (75% of revenue) have commenced, with ten centers opening over the year, adding to the existing 22 HK centers (one already opened in June 2023).
  • They also highlighted an aggressive long-term goal of making one bn HKD of profit by FY26 (Mkt cap: 4.8 bn HKD) and short-term guidance of 30-40% profit growth for FY24e. 

Kao (4452) | Is It Time to Buy This Dividend Aristocrat?

By Mark Chadwick

  • Kao has the lonest period of consecutive earnings growth in the Nikkei’s new “Consecutive Dividend Growth Stock Index”
  • With a 2.8% yield and a long history of raising its dividend, Kao should definitely be on the income investor’s radar screen
  • Despite the recent underperformance of the stock (-4% ytd), Kao does not represent compelling valuations

Rakuten: An Attractive Value Opportunity After 80% Value Decline in 8 Years

By Oshadhi Kumarasiri

  • Rakuten Group (4755 JP), having experienced an 80% decline in value over the last 8 years, now emerges as an enticing prospect for value investors.
  • The combined fair value of Rakuten’s Cards, Bank, and Mobile businesses now surpasses 100% of the company’s market capitalization.
  • Rakuten Ichiba, valued at ¥600bn, appears significantly undervalued when compared to ZOZO Inc (3092 JP) and MonotaRO Co Ltd (3064 JP), which hold approximately 2.0x Rakuten Ichiba’s valuation.

Yachiyo Industry (7298 JP): Honda’s Pre-Conditional Tender Offer

By Arun George

  • Yachiyo Industry (7298 JP) has recommended Honda Motor (7267 JP)’s pre-conditional tender offer of JPY1,390 per share, a 17.5% premium to the undisturbed price.
  • Post-Completion, Honda will transfer a 81% stake to Samvardhana Motherson Automotive Systems Group BV. The pre-conditions relate to various country approvals (China, the US, Brazil, and India).
  • The offer is expected to open in October. Achieving the 66.67% minimum ownership ratio requires a 32.6% minority acceptance rate which is doable as the offer is reasonable.   

Costa Group (CGC AU): Paine Schwartz’s Indicative Proposal

By Arun George

  • Costa Group Holdings (CGC AU)  has disclosed an indicative non-binding proposal from Paine Schwartz Partners at A$3.50 per share (A$3.54 including potential interim dividend).
  • The Board has granted eight weeks of non-exclusive due diligence. The due diligence, which started on 6 June, ends on 1 August.
  • The offer price is attractive compared to peer multiples and historical trading ranges. At the current price of A$3.35, the gross spread is 4.5% (5.7% including dividend).

Shenzhou (2313 HK): Contract Mfr for Leading Sportswear Brands Facing Challenging Demand Outlook.

By Robert C Prather Jr

  • Key customers & their retail partners battling excess inventory, waning consumer demand, and market share losses in certain geographies
  • Plans for capacity expansion amid demand uncertainties and alt data and macro picture may prove aggressive and along with risks of reshoring/nearshoring & friend-shoring may prove margin dilutive
  • Consensus expectations for 2H23 and 2024 appear overly optimistic and valuation is not cheap given the growth profile

Fenbi (2469 HK): Rightfully Sold, Wrongfully Punished

By Steve Zhou, CFA

  • Fenbi Ltd (2469 HK) is a newly listed China edtech company that focuses on tutoring for China civil servant exams.  
  • The company’s share price was caught by a perfect storm in June, dropping by as much as 70% during the month.
  • Very interesting opportunity to have exposure to a quality company in a sector that is very different from K12 tutoring.  

[PDD (PDD US, BUY, TP US$88) TP Change]: Facing Stiff China Competition and Rising Temu Costs

By Shawn Yang

  • We expect PDD to report 1Q23’s revenue and non-GAAP net income (5.4%) and (5.6%) vs. consensus, respectively.
  • Taobao/Tmall and JD launched more subsidy campaigns in 2Q23 to strengthen their low-cost mindsets among customers, while PDD remains to be more restrained, which might lead to decelerating top-line growth.
  • We cut PDD’s FY23 EPS by 3.7% and TP to US$ 88 on slower 2Q23 top-line growth and increasing Temu costs, but maintain its BUY rating.

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Jul 05
0

Daily Brief Health Care: Celltrion Inc, Guangzhou Wondfo Biotech C-A, Hologic Inc and more

By | Daily Briefs, Healthcare

In today’s briefing:

  • Celltrion (068270 KS): Humira Biosimilar Launch in US; Filed New Biosimilar Marketing Application
  • Guangzhou Wondfo Biotech (300482.CH) – Time to Bottom Fish?
  • Hologic Inc.: 3 Key Drivers & Strategic Priorities Driving Growth – Financial Forecasts

Celltrion (068270 KS): Humira Biosimilar Launch in US; Filed New Biosimilar Marketing Application

By Tina Banerjee

  • Celltrion Inc (068270 KS) has launched Humira biosimilar Yuflyma in the U.S. market, with a list price of $6,576.50 per month, 5% cheaper than Humira.
  • Yuflyma is a citrate-free formulation that is highly concentrated. More than 80% of patients treated with Humira in the U.S. rely on a high-concentration and citrate-free formulation.
  • Celltrion has submitted marketing application to the FDA for Eylea biosimilar candidate, CT-P42. The company plans to file for approval for the same in Europe and other countries later.

Guangzhou Wondfo Biotech (300482.CH) – Time to Bottom Fish?

By Xinyao (Criss) Wang

  • COVID-19 didn’t bring Wondfo explosive performance growth because China’s official COVID-19 detection method is nucleic acid test while Wondfo’s strength is antigen detection,which is used in later stage of COVID-19.
  • Revenue growth would slow down in 2023 due to the high base last year.2023 is a good time to bottom fish this stock as Wondfo’s performance growth would recover afterwards.
  • After continuous corrections, the current valuation is already at a low level, and has already priced in the negative impact of the decline in COVID-19 business and IVD centralized procurement.

Hologic Inc.: 3 Key Drivers & Strategic Priorities Driving Growth – Financial Forecasts

By Baptista Research

  • Hologic managed to exceed the revenue expectations as well as the earnings expectations of Wall Street.
  • The company’s financial results surpassed expectations, driven by robust organic revenue growth in key divisions like Diagnostics, Surgical, and Breast Health excluding COVID-19, driven by new products, market expansion and customer loyalty.
  • Hologic’s COVID-19 assay revenue was $233 million, down 47% sequentially, reflecting lower testing demand and increased competition.

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Jul 05
0

Most Read: BeiGene Ltd, S.F. Holding, Eoptolink Technology Inc Ltd, Li Auto, Costa Group Holdings, ARTERIA Networks Corp, HDFC Bank, Toyo Construction, Rakuten Group and more

By | Daily Briefs, Most Read

In today’s briefing:

  • HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds
  • SF Holdings A/H Listing – Early Look – Front Running
  • CSI500 Index Rebalance Preview: Potential Adds Outperforming Potential Deletes
  • Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?
  • Costa Group (CGC AU): Paine Schwartz Wants It Back
  • Arteria Networks (4423) Tender Launches 5 July.
  • HDFC/HDFC Bank Merger: Foreigners Sell HDFC; LTIM in NIFTY; JSP in NEXT50
  • Toyo Construction (1890) Plans Governance Review, Promises Neutrality on a YFO TOB Proposal Decision
  • Rakuten: An Attractive Value Opportunity After 80% Value Decline in 8 Years
  • Ohayo Japan| US Out – Quiet;  “Thread” To Face off Vs “Twitter”; NUGGET: Lawson – Gunning for Growth

HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds

By Brian Freitas

SF Holdings A/H Listing – Early Look – Front Running

By Sumeet Singh

  • S.F. Holding (002352 CH) (SFH), China’s largest express delivery company, aims to raise around US$2-3bn in its H-share listing in Hong Kong.
  • SFH is the largest integrated express logistics service provider in China and the fourth largest in the world. It has been listed on the Shenzhen Stock Exchange since 2017
  • In this note, we look at its past performance and other deal dynamics that might impact the listing.

CSI500 Index Rebalance Preview: Potential Adds Outperforming Potential Deletes

By Brian Freitas

  • Two thirds of the way through the review period for the June rebalance of the CSI500 Index, we forecast 50 changes (the maximum permitted) at the close on 8 December.
  • There is a big sector skew in the potential changes. We estimate a one-way turnover of 10.1% at the December rebalance resulting in a one-way trade of CNY 6.75bn.
  • The potential adds have outperformed the potential deletes and the CSI500 Index over the last six weeks. There could be more outperformance till nearer the end of the review period.

Hang Seng Index Rebalance Preview: 80 Member Target Achieved; What Next?

By Brian Freitas

  • We finally got to 80 Hang Seng Index constituents in June. Now comes the next step of moving up to 100 index constituents though there is no timeline for completion.
  • The conclusions of the market consultation on the inclusion of foreign stocks in the Hang Seng Index should be announced soon though implementation could start only in December.
  • We highlight 10 potential inclusions to the index with passive trading impact varying from 1.5-5.6 days of ADV. There are large shorts on some of the stocks.

Costa Group (CGC AU): Paine Schwartz Wants It Back

By Brian Freitas

  • Costa Group Holdings (CGC AU) listed in 2015 when Paine & Partners sold 40% of its stake in the company.
  • Paine Schwartz Partners bought a 13.84% stake last year, increased it in March, and has now made an offer to buy out the remaining shares at A$3.5/share in cash.
  • Short interest was over nearly 11 days of ADV to cover and short covering could take the stock higher sooner. This is a buy here.

Arteria Networks (4423) Tender Launches 5 July.

By Travis Lundy

HDFC/HDFC Bank Merger: Foreigners Sell HDFC; LTIM in NIFTY; JSP in NEXT50

By Brian Freitas

Toyo Construction (1890) Plans Governance Review, Promises Neutrality on a YFO TOB Proposal Decision

By Travis Lundy

  • The Nikkei has an article today with details of an interview with new Toyo Construction (1890 JP) Chairman Yoshida and President Obayashi. There will be a 2-3 month governance review.
  • It will review decision-making process, “profit management” (利益管理), and business investment decisions (事業への投資判断).  Chairman Yoshida had a quote on neutrality on a YFO proposal. My wording there was carefully chosen.
  • The President also said they expect ongoing synergies with Infroneer, and will maintain MTMP/Mitsui OSK Partnership management plans. Their words were chosen carefully too. 

Rakuten: An Attractive Value Opportunity After 80% Value Decline in 8 Years

By Oshadhi Kumarasiri

  • Rakuten Group (4755 JP), having experienced an 80% decline in value over the last 8 years, now emerges as an enticing prospect for value investors.
  • The combined fair value of Rakuten’s Cards, Bank, and Mobile businesses now surpasses 100% of the company’s market capitalization.
  • Rakuten Ichiba, valued at ¥600bn, appears significantly undervalued when compared to ZOZO Inc (3092 JP) and MonotaRO Co Ltd (3064 JP), which hold approximately 2.0x Rakuten Ichiba’s valuation.

Ohayo Japan| US Out – Quiet;  “Thread” To Face off Vs “Twitter”; NUGGET: Lawson – Gunning for Growth

By Mark Chadwick

  • OVERSEAS. US out for Independence Day – not a lot to report; European Stocks gain, and volumes 1/3 of normal;  META to Launch “Thread”, to compete with Twitter
  • JAPAN. NKY Futs -0.8% vs Cash; USDJPY 144.5; NKY -1% as JP succumbs to profit taking; Toyota to cut Solid State battery costs by 50%; Rakuten to list Securities biz
  • NUGGET.  Lawson – if management can execute on their MTP, the stock is super cheap. Potential growth, Yield, Take out play ?

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Jul 04
0

Daily Brief Indonesia: Amman Mineral Internasional and more

By | Daily Briefs, Indonesia

In today’s briefing:

  • Amman Mineral International IPO Trading – Looks Attractive with Ample Upside

Amman Mineral International IPO Trading – Looks Attractive with Ample Upside

By Ethan Aw

  • Amman Mineral Internasional (1416286D IJ) raised around US$714m in its Indonesian IPO.
  • Amman Mineral International (AMI) carries out exploration, development, mining, processing. The company operates an open pit copper and gold mine known as the Batu Hijau mine in Indonesia.
  • In this note, we will talk about the trading dynamics and valuation.

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Jul 04
0

Daily Brief United States: S&P 500 INDEX, Black Sesame Technologies and more

By | Daily Briefs, United States

In today’s briefing:

  • EQD | Introducing the Market Reversal Matrix (MRM): Predict Trend Reversal with Bayesian Models
  • Black Sesame Pre-IPO Tearsheet
  • China Designer of AI-Based Self-Driving Chips Files for Hong Kong IPO

EQD | Introducing the Market Reversal Matrix (MRM): Predict Trend Reversal with Bayesian Models

By Nico Rosti

  • A market-timing device that classifies historical trend patterns/reversals in “buckets”, to generate a “matrix” showing the market’s average trend reversal “behavior” at the end of each trend “type”. 
  • A purely statistical approach: using Bayesian Models to determine the probability of DAILY or WEEKLY trend reversal at precise LONG/SHORT support prices at fixed points in time.
  • The analogy with the game of Blackjack: knowing the probability of a trend reversal can be 30% or 90% (not always =50%) can be a significant edge for the investor.

Black Sesame Pre-IPO Tearsheet

By Sumeet Singh

  • Black Sesame International Holdings (BSIH) is looking to raise around US$300m in its upcoming Hong Kong IPO. The deal will be run by CICC and Huatai.
  • BSIH is an automotive-grade computing SoC and SoC-based intelligent vehicle solution provider. 
  • In terms of shipment of automotive-grade high-computing power SoCs in 2022, it was the third largest provider globally, according to Frost & Sullivan.

China Designer of AI-Based Self-Driving Chips Files for Hong Kong IPO

By Caixin Global

  • Black Sesame International Holding Ltd., a Xiaomi-backed designer of artificial intelligence-based self-driving computing chips, has filed for a Hong Kong IPO
  • Black Sesame, which also counts Tencent Holdings Ltd. and SAIC Motor Corp. Ltd. among its major investors, plans to use the IPO proceeds mainly to develop system-on-a-chip (SoC) designs and software for intelligent vehicles in the next three years.
  • Bloomberg in January reported that the company expects to raise $200 million through the share sale, citing people familiar with the matter.

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Jul 04
0

Daily Brief South Korea: Fadu , Lutronic Corp and more

By | Daily Briefs, South Korea

In today’s briefing:

  • Fadu IPO Preview
  • (Mostly) Asia M&A, June 2023:  DDH1, Dali Foods, NWS Holdings, JSR Corp, Lutronic, Chindata

Fadu IPO Preview

By Douglas Kim

  • Fadu is getting ready to complete its IPO in Korea in August. Fadu is one of the most highly anticipated IPOs in Korea in 2023. 
  • The expected market cap at the top end of the IPO price range is 1.6 trillion won. The IPO price range is from 26,000 won to 31,000 won.
  • Fadu is a system semiconductor fabless company specializing in data centers.

(Mostly) Asia M&A, June 2023:  DDH1, Dali Foods, NWS Holdings, JSR Corp, Lutronic, Chindata

By David Blennerhassett

  • For the month of June, 13 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$9bn.
  • The average premium for the new deals announced (or first discussed) in June was 42%.
  • This compares to the average premium for all deals in 2022 (106 deals), 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 41%, 33%, 31%, and 31% respectively.

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Jul 04
0

Daily Brief Australia: United Malt Group Ltd, Musgrave Minerals, Costa Group Holdings and more

By | Australia, Daily Briefs

In today’s briefing:

  • United Malt/Malteries Soufflet: I’ll Drink To That!
  • Musgrave Minerals (MGV AU): Ramelius’ Offer Edges past Westgold’s Offer
  • Costa Group (CGC AU): Paine Schwartz Wants It Back

United Malt/Malteries Soufflet: I’ll Drink To That!

By David Blennerhassett

  • Back on the 28 March, United Malt Group Ltd (UMG AU) entered into a NBIO with Malteries Soufflet at an Offer Price of $5.00/share, a 45.3% premium to undisturbed.
  • After a lengthy due diligence process, the two companies have now entered into a binding agreement of A$5.00/share, by way of a Scheme. UMG’s board has unanimously recommended the bid.
  • The Offer is subject to FIRB and other regulatory approvals. Malteries Soufflet and UMG are the second and fourth-largest maltsters in the world.

Musgrave Minerals (MGV AU): Ramelius’ Offer Edges past Westgold’s Offer

By Arun George

  • Musgrave Minerals (MGV AU) has recommended a cash and scrip off-market takeover offer from Ramelius Resources (RMS AU) at 1 RMS share for every 4.21 MGV shares + A$0.04 cash.
  • RMS’ offer is attractive compared to adjusted exchange ratios and peer multiples. The offer, which has a 50.1% minimum acceptance condition, has secured commitments from shareholders representing 12.13% of shares.
  • At the last close, RMS’ offer is 14.9% higher than Westgold Resources (WGX AU)’s rival scrip off-market takeover offer of 1 WGX share for every 5.37 MGV shares.

Costa Group (CGC AU): Paine Schwartz Wants It Back

By Brian Freitas

  • Costa Group Holdings (CGC AU) listed in 2015 when Paine & Partners sold 40% of its stake in the company.
  • Paine Schwartz Partners bought a 13.84% stake last year, increased it in March, and has now made an offer to buy out the remaining shares at A$3.5/share in cash.
  • Short interest was over nearly 11 days of ADV to cover and short covering could take the stock higher sooner. This is a buy here.

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Jul 04
0

Daily Brief Singapore: Healthway Medical Corp and more

By | Daily Briefs, Singapore

In today’s briefing:

  • Healthway Medical (HMED SP): OUE Healthcare’s Delisting Offer

Healthway Medical (HMED SP): OUE Healthcare’s Delisting Offer

By Arun George

  • Healthway Medical Corp (HMED SP) received a delisting proposal from OUE Lippo Healthcare (IHC SP) at S$0.048 per share, a 45.5% premium to the undisturbed price (28 June).
  • The key conditions are HMED shareholder approval and the offeror and concert parties representing >50% of voting rights (satisfied due to irrevocables).
  • The offer price is attractive. The EGM is likely to be held in late September. The current price of S$0.046 implies a gross spread of 4.3%.

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Jul 04
0

Daily Brief India: Senco Gold , HDFC Bank, Sino-Ocean Group and more

By | Daily Briefs, India

In today’s briefing:

  • Senco Gold Ltd IPO- Forensic Analysis
  • HDFC – Amalgamated, We List Its Own Key Synergies, Which Appear Tremendous
  • Morning Views Asia: MGM China Holdings, Sino-Ocean Service, Vedanta Resources

Senco Gold Ltd IPO- Forensic Analysis

By Nitin Mangal

  • Senco Gold (0655443D IN) ‘s long awaited IPO is scheduled to open this week.
  • The company is the largest organized retail jewellery player in the East and has a pan India presence. 
  • A look at its IPO filing and current financials reveal several key takeaways, including ongoing litigations, inability to generate cash and register key trademarks, etc.

HDFC – Amalgamated, We List Its Own Key Synergies, Which Appear Tremendous

By Daniel Tabbush

  • News out this morning that HDFC Bank and HDFC merger became effective 1 July 
  • This occurred after the Boards approved the merger scheme on 30 June
  • Funding cost benefits, operating cost synergies, product cross-sale: major benefits

Morning Views Asia: MGM China Holdings, Sino-Ocean Service, Vedanta Resources

By Charles Macgregor

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.

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Jul 04
0

Daily Brief China: Perfect Medical Health, Alibaba Group Holding , BeiGene Ltd, Eoptolink Technology Inc Ltd, Great Wall Motor, Alibaba (ADR), Wuhan YZY Biopharma, Bank of Chongqing Co Ltd H, S.F. Holding, Qiniu Limited and more

By | China, Daily Briefs

In today’s briefing:

  • Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety
  • Alibaba (9988 HK): Buy JD Logistics as the Business Model Alibaba Begins to Follow
  • HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds
  • CSI500 Index Rebalance Preview: Potential Adds Outperforming Potential Deletes
  • Great Wall Motor Eyes Expansion in Vietnam Amid Southeast Asia Push
  • [Alibaba (BABA US, BUY, TP US$109) Company Update]: Racehorse Mechanism Benefits E-Commerce
  • Pre-IPO Wuhan YZY Biopharma – Both R&D and Commercialization Capabilities Have yet to Be Proven
  • Bank of Chongqing – One Of Worst NIM Contraction, But With High Loan Growth
  • SF Holdings A/H Listing – Early Look – Front Running
  • Qiniu Pre-IPO Tearsheet

Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety

By Sameer Taneja

Alibaba (9988 HK): Buy JD Logistics as the Business Model Alibaba Begins to Follow

By Ming Lu

  • Alibaba’s new chairman decides to provide logistics service to outside customers.
  • We believe Alibaba is following JD Logistics, as both companies have large retailer bases.
  • We suggest buying JD Logistics the role model instead of Alibaba the follower.

HSCEI Index Rebalance Preview: Deletions Fairly Certain; Uncertainty Among the Adds

By Brian Freitas

CSI500 Index Rebalance Preview: Potential Adds Outperforming Potential Deletes

By Brian Freitas

  • Two thirds of the way through the review period for the June rebalance of the CSI500 Index, we forecast 50 changes (the maximum permitted) at the close on 8 December.
  • There is a big sector skew in the potential changes. We estimate a one-way turnover of 10.1% at the December rebalance resulting in a one-way trade of CNY 6.75bn.
  • The potential adds have outperformed the potential deletes and the CSI500 Index over the last six weeks. There could be more outperformance till nearer the end of the review period.

Great Wall Motor Eyes Expansion in Vietnam Amid Southeast Asia Push

By Caixin Global

  • Great Wall Motor Co. Ltd. (601633.SH +2.50%) said on Wednesday that it will enter the Vietnamese market in August with its Haval H6 hybrid model, while a broader plan to build an assembly plant for new-energy vehicles in the country is set for 2025.
  • The Haval H6s will initially be exported to Vietnam from its manufacturing facility in Rayong, Thailand, the Hebei-based carmaker said earlier.
  • Vietnam is the fourth-largest auto market in the Association of Southeast Asian Nations (ASEAN) region after Indonesia, Thailand and Malaysia, according to 2022 passenger car sales figures released by the ASEAN Automotive Federation.

[Alibaba (BABA US, BUY, TP US$109) Company Update]: Racehorse Mechanism Benefits E-Commerce

By Shawn Yang

  • We recently discussed BABA’s management changes with more e-commerce practitioners, and our main conclusion is that this change will be more beneficial to BABA’s e-commerce business rather than other subsidiaries;
  • BABA is expected to learn from Tencent and ByteDance by shifting from a centralized authority model to a racehorse mechanism. Some subsidiaries, especially AliCloud and Cainiao, undergo a painful transformation;
  • This may be good news for BABA because its e-commerce  is the largest of its valuation. We also remind investors to exercise caution regarding the upcoming IPOs of BABA subsidiaries.

Pre-IPO Wuhan YZY Biopharma – Both R&D and Commercialization Capabilities Have yet to Be Proven

By Xinyao (Criss) Wang

  • YZY is a company that is serious about drug development However, there is actually high R&D risk of its pipeline candidates. So, YZY’s R&D capability has yet to be proven.
  • There are still many unanswered questions in the whole direction of bispecific antibody. If YZY’s candidates fail to prove better marginal clinical benefits, they won’t have good commercialization performance. 
  • YZY has a long way to go based on its pipeline situation. Considering Wuhan YZY Biopharma (YZY HK) has no product in commercialization stage, its valuation may not be high.

Bank of Chongqing – One Of Worst NIM Contraction, But With High Loan Growth

By Daniel Tabbush

  • Combination of high NIM contraction with high loan growth is not a good combination
  • BOC has seen its NIM down 14% in the past year but against 12% loan growth
  • PBOC pressure to cut rates and for banks to support ailing debtors, is a risk

SF Holdings A/H Listing – Early Look – Front Running

By Sumeet Singh

  • S.F. Holding (002352 CH) (SFH), China’s largest express delivery company, aims to raise around US$2-3bn in its H-share listing in Hong Kong.
  • SFH is the largest integrated express logistics service provider in China and the fourth largest in the world. It has been listed on the Shenzhen Stock Exchange since 2017
  • In this note, we look at its past performance and other deal dynamics that might impact the listing.

Qiniu Pre-IPO Tearsheet

By Clarence Chu

  • Qiniu Limited (1045102D CH) is looking to raise about US$200m in its upcoming Hong Kong IPO.
  • Qiniu Limited (Qiniu) is a one-stop scenario-based intelligent audiovisual service provider.
  • According to iResearch, the firm is the third largest audiovisual platform as a service (PaaS) provider in China in terms of FY22 revenue, with a market share of 5.7%. 

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