Category

China

China: JD.com Inc (ADR), Softbank Group, Sinosteel Engineering & Technology and more

By | China, Daily Briefs

In today’s briefing:

  • JD.com (9618 HK): To Keep Revenue at Any Cost
  • Morning Views Asia: Greenland Holdings Corp, Softbank Group
  • Sinosteel Gets Permit to Exploit Iron Ore in Cameroon

JD.com (9618 HK): To Keep Revenue at Any Cost

By Ming Lu

  • JD is facing a severe logistics problem due to the lockdowns in many cities of China.
  • We believe JD is trying to secure its revenue no matter how large the fulfillment expense is.
  • We believe the stock has a downside of 22% for the year end 2022.

Morning Views Asia: Greenland Holdings Corp, Softbank Group

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.


Sinosteel Gets Permit to Exploit Iron Ore in Cameroon

By Caixin Global

  • China’s Sinosteel Corp. has struck a deal with the Cameroonian government to begin production of iron ore at a mine, becoming the latest Chinese firm to tap the valuable resource in West Africa.
  • According to a company statement, Sinosteel obtained a permit to exploit the Lobé mine after signing a contract with Gabriel Dodo Ndoke, Cameroon’s minister of mines, industry and technological development
  • The state-owned mining giant will invest about $700 million to develop the Lobé mine, which is estimated to have about 600 million tons of iron ore reserves

Before it’s here, it’s on Smartkarma

China: Beijing Enterprises Urban Resources, China Longyuan Power, Semiconductor Manufacturing International Corp (SMIC), Banco Bradesco SA, Wynn Macau Ltd and more

By | China, Daily Briefs

In today’s briefing:

  • BEW Bumps Effective Stake In BEURG (3718 HK)
  • China Longyuan (916 HK): On Your Mark, Get Set, Go!
  • SMIC (981.HK): 2Q22 Preview- We Estimate Around 5% Growth Could Be the Case
  • Aikya Q1 2022 Investor Letter
  • Morning Views Asia: Sunac China Holdings, Wynn Macau Ltd, Yuexiu Property
  • Morning Views Asia: Sunac China Holdings, Wynn Macau Ltd, Yuexiu Property

BEW Bumps Effective Stake In BEURG (3718 HK)

By David Blennerhassett

  • Beijing Enterprises Water Group (371 HK) (BEW) has effectively increased its stake in Beijing Enterprises Urban Resources (3718 HK) (BEURG) after entering into Acting In Concert agreements (AIC). 
  • Parties to the AICs “irrevocably and unconditionally” undertake to vote in the same manner as BEW in BEURG shareholder meetings. 
  • There was no update on the timing of the MGO, which is expected to open for tendering on the 20 May. 

China Longyuan (916 HK): On Your Mark, Get Set, Go!

By Osbert Tang, CFA

  • China Longyuan Power (916 HK) will see accelerating earnings momentum in the rest of the year – after a weak start due to high base for YoY comparison.
  • We believe the combination of increase in utilisation hours, growth in installed capacity, improvement in power tariff and better cash flow and cost performance are the major drivers.
  • Share price has been weak in this year, and has returned the stock to less demanding level of 13.3x FY22 PER which we think cannot adequately reflects earnings prospects.

SMIC (981.HK): 2Q22 Preview- We Estimate Around 5% Growth Could Be the Case

By Patrick Liao

  • We think SMIC is likely to reach the high-end of 1Q22 guidance, which was US$6,259~6,368mn/36~38% respectively.
  • We thick SMIC is likely to reach ~US$6,680mn/39% for revenue/GM respectively in 2Q22.
  • SMIC cannot have the EUV machine because of the Wassenaar Arrangement. Therefore, SMIC has to optimize its operation and to expand 28nm and above technologies.

Aikya Q1 2022 Investor Letter

By Fund Newsletters

  • Aikya Investment Management is an independent, employee-owned, investment management company that specialises in managing Emerging Markets equity portfolios.
  • The strategy has returned 14.6% returns in USD terms since its inception in March 2020.
  • We remain highly optimistic on the long-term prospects of Emerging Markets.

Morning Views Asia: Sunac China Holdings, Wynn Macau Ltd, Yuexiu Property

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.


Morning Views Asia: Sunac China Holdings, Wynn Macau Ltd, Yuexiu Property

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.


Before it’s here, it’s on Smartkarma

China: Hopson Development and more

By | China, Daily Briefs

In today’s briefing:

  • Morning Views Asia: Adani Transmission, Hopson Development, Reliance Industries, Sino-Ocean Service

Morning Views Asia: Adani Transmission, Hopson Development, Reliance Industries, Sino-Ocean Service

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.


Before it’s here, it’s on Smartkarma

China: China Conch Venture Holdings, TK Group (Holdings), Shanghai Microport Endovascular MedTech, Ashtead Group PLC, Road King Infrastructure and more

By | China, Daily Briefs

In today’s briefing:

  • Conch Venture (586 HK): Another Spin-Off in the Pipeline
  • Investing in HK Stocks
  • Shanghai Microport Endovascular MedTech (688016.CH) 21/22Q1 – This Is a Company Worth Investing In
  • Aristotle Capital Management International Equity ADR 1Q 2022 Commentary
  • Morning Views Asia: Japfa Comfeed Indonesia, Melco Resorts & Entertainment

Conch Venture (586 HK): Another Spin-Off in the Pipeline

By Osbert Tang, CFA

  • Following listing of China Conch Environment (587 HK), China Conch Venture (586 HK) is seeking a spin-off of CV Green Energy in A-share market and we view this move positively.
  • Limited details are currently available, but we think CV Green Energy, which operates WTE businesses, will trade at significantly higher multiples than its Hong Kong peers. 
  • Assuming CV Green Energy to hold all Conch Venture’s WTE businesses, we estimate the IPO will boost the latter’s sum-of-the-parts value by 8% or HK$2.14 per share.

Investing in HK Stocks

By Turtles all the way down

  • I think most (value) investors go through four stages: Stage 0: Buy stuff that goes up. Especially when a lot of people around you get rich from doing it.
  • Stage 1: Invest in the future! Buy into some fancy exciting new technology that will become big some day! The Cathie Wood stage. Usually stage 1 and stage 0 go hand in hand.
  • Stage 2: Buy at low PE multiples. Some are smart and skip the first two. This stage is not bad, it should lead to slight outperformance. Can be dangerous without wide diversification as a lot of them are value traps.

Shanghai Microport Endovascular MedTech (688016.CH) 21/22Q1 – This Is a Company Worth Investing In

By Xinyao (Criss) Wang

  • The aortic product line would bring strong growth in 1-2 years. From 3 years or longer term, Endovascular’s peripheral vascular interventional devices would be the main driver for high growth.
  • We don’t think the centralized procurement would be a concern for the time being. As many products are or will apply for CE Mark, the progress of internationalization is promising.
  • The current valuation is very attractive. Due to the pandemic/lockdown in China and many external uncertainties, share price could go lower, but it’s still a good company to invest in.

Aristotle Capital Management International Equity ADR 1Q 2022 Commentary

By Fund Newsletters

  • For Q1 2022, Aristotle Capital’s International Equity ADR Composite posted a total USD return of -9.75% gross of fees.
  • The company is an independent/employee-owned investment management organization that specializes in equity and fixed income portfolio management for institutional and advisory clients worldwide.

Morning Views Asia: Japfa Comfeed Indonesia, Melco Resorts & Entertainment

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.


Before it’s here, it’s on Smartkarma

China: Health And Happiness (H&H), JHBP (Genor), CanSino Biologics Inc, Central China Real Estate and more

By | China, Daily Briefs

In today’s briefing:

  • H&H (1112 HK): Near Term Gloom Not Bad Enough to Lead to Long Term Doom.
  • Genor Biopharma (6998 HK): First Product Approved in China; Late-Stage Pipeline Entails Visibility
  • CanSino Biologics (688185.CH/6185.HK) -Difficulties in 2022 Cannot Mask Long-Term Investment Value
  • Morning Views Asia: Adani Green Energy, Azure Power Global Ltd, Central China Securities

H&H (1112 HK): Near Term Gloom Not Bad Enough to Lead to Long Term Doom.

By Devi Subhakesan

  • Highly leveraged Balance sheet and a USD350 mn bridge loan that needs refinancing, amidst rising interest rates, have alarmed investors, thus driving Health And Happiness (H&H) (1112 HK) stock south.
  • With its core Baby nutrition segment sales declining and Adult, Pet nutrition still in ramp up phase, the going has been tough for H&H as operating margins weakened.
  • Even as its near term concerns seem daunting, long term prospects are good with a diversified premium-brand portfolio that can moderate long term risk to growth from declining birth rate.

Genor Biopharma (6998 HK): First Product Approved in China; Late-Stage Pipeline Entails Visibility

By Tina Banerjee

  • JHBP (Genor) (6998 HK) received approval in China for its first commercial drug, GB242, a biosimilar to Remicade (infliximab). Approved indications have an addressable patient population of 10 million.
  • The company is also expected to obtain marketing approval for its drug candidate for the treatment of relapsed and refractory peripheral T-cell lymphoma (PTCL) in China this year.
  • In-Licensed GB491 (lerociclib) has entered in two phase 3 clinical trials for first and second-line treatments of breast cancer. NDA for GB491 is expected to be filed in 2023.

CanSino Biologics (688185.CH/6185.HK) -Difficulties in 2022 Cannot Mask Long-Term Investment Value

By Xinyao (Criss) Wang

  • We update our forecast on CanSino’s performance in 2022, which could be much lower than that in 2021 due to the concerns on commercialization outlook of COVID-19 vaccine and MCV2/MCV4.
  • However, due to strong R&D and technology platforms, the value of CanSino’s pipeline is higher and its products could become the ceiling of pricing power for other homogeneous competing products.
  • We still think CanSino has investment value in long term despite the headwinds in short term.The market value by May 6 of HK$18.1 billion (PE/TTM at 7.22) is also attractive.

Morning Views Asia: Adani Green Energy, Azure Power Global Ltd, Central China Securities

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.


Before it’s here, it’s on Smartkarma

China: Yashili International Holdings, SenseTime Group, JCET Group, Yunkang Group and more

By | China, Daily Briefs

In today’s briefing:

  • Yashili (1230 HK)’s Pre-Conditional Offer From Mengniu
  • Index Rebalance & ETF Flow Recap: KOSPI200, KQ150, CSI300, STAR50, SET50, China A50, HSCI, SenseTime
  • Yashili’s HK$1.20 Privatisation Offer from Mengniu
  • JCET (600584.CH): 2022 Outlook Should Be Better than Fear
  • Yunkang Group IPO – Futile to Try and Gauge Its Post-COVID Performance

Yashili (1230 HK)’s Pre-Conditional Offer From Mengniu

By David Blennerhassett


Index Rebalance & ETF Flow Recap: KOSPI200, KQ150, CSI300, STAR50, SET50, China A50, HSCI, SenseTime

By Brian Freitas


Yashili’s HK$1.20 Privatisation Offer from Mengniu

By Arun George

  • Danone SA (BN FP) will sell to China Mengniu Dairy Co (2319 HK) its 25% Yashili stake for HK$1.20 per share. Post-completion, Mengniu will launch a privatisation offer at HK$1.20.  
  • The privatisation is subject to several pre-conditions, which carry low risk in our view. The key conditions are the headcount test and rejections by <10% of all disinterested shareholders.
  • The offer for Yashili International Holdings (1230 HK) is attractive. At the last close, the gross spread to the offer is 30.4%. Buy up to HK$1.09 (implies an 85% deal probability).

JCET (600584.CH): 2022 Outlook Should Be Better than Fear

By Patrick Liao

  • JCET reported revenue/GM RMB$8,138mn/10.7% in 1Q22, which grew 21.2% YoY and 0.5% QoQ.
  • We expect that its growth would continue and likely reach to revenue/GM for about RMB$8,234.5mn/10.8% in 2Q22.
  • Although the mainland China insists in the Zero Policy against COVID-19, the GDP growth was targeting at ~5.5% in 2022. 

Yunkang Group IPO – Futile to Try and Gauge Its Post-COVID Performance

By Clarence Chu

  • Yunkang Group (2325 HK) is looking to raise US$139m in its Hong Kong IPO.
  • Yunkang Group has grown its on-site diagnostics centers and has grand plans to add new centers with the IPO proceeds.
  • However, its business performance had been largely impacted by COVID, where COVID-related tests amounted to 83.6% of total tests performed in FY21, while contributing 58.1% to total revenue.

Before it’s here, it’s on Smartkarma

China: China Meidong Auto, Health And Happiness (H&H), Yunkang Group, Agile Property Holdings, CIFI Holdings and more

By | China, Daily Briefs

In today’s briefing:

  • China Meidong: Back the Porsche at 20 HKD
  • Health And Happiness (H&H) (1112.HK) – High Bankruptcy Risk Together with Gloomy Prospects
  • H&H (1112): Difficult Period?
  • Yunkang IPO (PHIP): Growth Still Largely Driven by COVID
  • Chinese Property Weekly – 6 May 2022 – Lucror Analytics
  • Chinese Property Weekly – 6 May 2022 – Lucror Analytics
  • Weekly Wrap – 06 May 2022
  • Weekly Wrap – 06 May 2022

China Meidong: Back the Porsche at 20 HKD

By Sameer Taneja

  • China Meidong Auto (1268 HK) trades at a 12x/9x PE FY22/23E with a 6.5% dividend yield at a 20 HKD/share price (assuming an 80% payout ratio).
  • In buying China Meidong Auto (1268 HK), you get an industry leader in the dealership space with supreme execution (35% ROE/47% CAGR profit growth/best capital allocator).
  • The integration of the Starchase Porsche Dealerships provides an upside potential, as the management, with their superior track record, can significantly improve the target’s operations.

Health And Happiness (H&H) (1112.HK) – High Bankruptcy Risk Together with Gloomy Prospects

By Xinyao (Criss) Wang

  • H&H is faced with multiple challenges. Internally, the performance is under pressure, with stagnating revenue, decreasing profits, cash flow shortage and bankruptcy risk.It’s difficult for H&H to turn things around.
  • Externally, factors such as the declining birth rate, lower demand, fierce competition in the infant formulas market, rising costs due to inflation, and economic slowdown worsen the Company’s prospects.
  • Based on our 2022 forecast (14% or lower adjusted EBITDA margin,1%-2% or flat revenue growth), we do not think H&H is a good investment. We are conservative about its outlook.

H&H (1112): Difficult Period?

By Henry Soediarko

  • FY 2021 was a difficult period for Health And Happiness (H&H) (1112 HK) with the lower than usual sales growth and a big one-off expenses. 
  • It is true that the D/E ratio has gone up to 161% but this is not the first time it happened. 
  • FCF/Sales remain at low double-digit and cash/TA is also at low double-digit so it is far from going bust.

Yunkang IPO (PHIP): Growth Still Largely Driven by COVID

By Shifara Samsudeen, ACMA, CGMA

  • Yunkang Group (2325 HK) is a medical operation service provider in China and offers a full suite of diagnostic testing services.
  • The company’s IPO application has been approved and plans to raise about US$139m. In this  insight, we have highlighted some of the key new data points from PHIP filing.
  • Revenue grew 8.8% YoY in 2021 excl. Cov-19 tests (vs 80.2% from Cov-19 tests) and we are yet to see major improvements excluding the positive impact on margins from COVID.

Chinese Property Weekly – 6 May 2022 – Lucror Analytics

By Charles Macgregor

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.


Chinese Property Weekly – 6 May 2022 – Lucror Analytics

By Charles Macgregor

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.


Weekly Wrap – 06 May 2022

By Charles Macgregor

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

  1. Sunac China Holdings
  2. Kawasan Industri Jababeka
  3. Kwg Property Holding
  4. Tata Steel Ltd
  5. China Jinmao Holdings

and more…


Weekly Wrap – 06 May 2022

By Charles Macgregor

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

  1. Sunac China Holdings
  2. Kawasan Industri Jababeka
  3. Kwg Property Holding
  4. Tata Steel Ltd
  5. China Jinmao Holdings

and more…


Before it’s here, it’s on Smartkarma

China: Gree Electric Appliances, Binjiang Service Group, Keep Inc, Dongfang Electric, Yunkang Group, CIFI Holdings and more

By | China, Daily Briefs

In today’s briefing:

  • FTSE China A50 Index Rebalance Preview: PetroChina, Gree Out Due to Ground Rule Change
  • Binjiang 3316 HK: Most Resilient Private PMC with Good Upside Potential
  • Keep Pre-IPO – Market Leader in a Growing Market, However, Has Been on a Spending Spree
  • Dongfang Electric (1072 HK): From Strength to Strength
  • Yunkang Group IPO – Has Improved Its Operating Metrics, but Still Reliant on COVID Boost
  • Morning Views Asia: CIFI Holdings, Kawasan Industri Jababeka, KWG Living Group, Sunac China Holdings

FTSE China A50 Index Rebalance Preview: PetroChina, Gree Out Due to Ground Rule Change

By Brian Freitas


Binjiang 3316 HK: Most Resilient Private PMC with Good Upside Potential

By Sameer Taneja

  • Binjiang Service Group (3316 HK) is turning out to be one of the most resilient private PMC in terms of margins and profitability with the conservative approach of the management.
  • Trading at 12x/9.4x FY22e/FY23e with 25% of the market capitalization in cash, potential investors have the best of both worlds in value and growth.
  • The company will continue to pay 60% of its earnings as dividends, resulting in a 5.2%/7.5% dividend yield for FY22e/FY23e. We believe the stock has the potential to re-rate.

Keep Pre-IPO – Market Leader in a Growing Market, However, Has Been on a Spending Spree

By Clarence Chu

  • Keep Inc (KEEP HK) is looking to raise around US$500m in its upcoming Hong Kong IPO.
  • Keep is an online fitness platform, offering online fitness content, smart fitness devices and fitness products. 
  • The firm aims to develop a closed-loop system where its offerings are complementary, thus servicing an individual’s entire fitness life cycle.

Dongfang Electric (1072 HK): From Strength to Strength

By Osbert Tang, CFA

  • The 1Q22 result of Dongfang Electric (1072 HK) kick-started FY22 with an encouraging new record high quarterly profit and a good recovery in YoY new order momentum.
  • We are excited to see DEC managed to control its selling, administrative and R&D costs with a slight 2.7% YoY growth, compared with a solid 29.8% revenue increase.
  • Recurring pre-tax profit growth is estimated to be over 30% YoY, and its order backlog at around Rmb85.4bn, 1.8x its FY21 revenue. We consider its 7.7x FY22F PER very undemanding. 

Yunkang Group IPO – Has Improved Its Operating Metrics, but Still Reliant on COVID Boost

By Clarence Chu

  • Yunkang Group (YK HK) is looking to raise US$139m in its Hong Kong IPO.
  • Yunkang Group is a medical operation service provider in China and as per F&S, had a market share of 3.7% in China’s medical operation service market as per 2020 revenue.
  • Yunkang saw its full-year FY21 performance pulled up in the later half of the year. Number of tests administered had also surged 3.45x YoY in FY21.

Morning Views Asia: CIFI Holdings, Kawasan Industri Jababeka, KWG Living Group, Sunac China Holdings

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.


Before it’s here, it’s on Smartkarma

China: Jinko Solar, Alibaba Group, Suchuang Gas Corp, Pag, ABM Investama, Betters Medical Investment Holdings, Gajah Tunggal and more

By | China, Daily Briefs

In today’s briefing:

  • STAR50 Index Rebalance Preview: 3 Changes or 5? It Depends…
  • Alibaba: May Be a Good Time to Double Down On Shorts With 4QFY22 Set For Another Disappointment
  • Suchuang Gas’ Scheme Meeting on 10 June Is a Welcome Exit from the Ongoing Share Suspension
  • PAG Pre-IPO – The Negatives – Planned Reorg Don’t Sound Great
  • Asia HY Monthly – Oil & Gas Update Following Russia’S Invasion Of Ukraine – Lucror Analytics
  • Pre-IPO Betters Medical Investment Holdings – The Industry, the Business and the Concerns
  • Morning Views Asia: Gajah Tunggal, Times China

STAR50 Index Rebalance Preview: 3 Changes or 5? It Depends…

By Brian Freitas


Alibaba: May Be a Good Time to Double Down On Shorts With 4QFY22 Set For Another Disappointment

By Oshadhi Kumarasiri

  • Alibaba Group (9988 HK)’s fourth-quarter results will be out soon and we predict another disappointing quarter with mid-single-digit revenue growth.
  • The company’s FY23 revenue guidance could be significantly weaker than the current consensus estimate as rumoured layoffs and budget cuts are likely to affect Alibaba Group (BABA US)’s growth.
  • With the share price near the upper end of the trend channel leading up to 4QFY22 earnings, we think it’s a good time to add to existing short positions.

Suchuang Gas’ Scheme Meeting on 10 June Is a Welcome Exit from the Ongoing Share Suspension

By Arun George

  • The scheme document is out with the Court meeting scheduled for 10 June. The IFA considers the offer to be fair and reasonable. Suchuang Gas Corp (1430 HK) remains suspended.
  • Key conditions are the headcount test and approval by at least 75% of disinterested shareholders (<10% of all disinterested shareholders rejection). 
  • Excluding the irrecovables, no shareholder holds a blocking stake. As the timeframe to fulfil the resumption guidance remains highly uncertain, the offer is a welcome exit opportunity. 

PAG Pre-IPO – The Negatives – Planned Reorg Don’t Sound Great

By Sumeet Singh

  • PAG aims to raise around US$2bn via its Hong Kong IPO.
  • PAG is an alternative investment firm focused on Asia-Pacific (APAC), it had approximately US$50bn in assets under management (AUM), as of Dec 21.
  • In this note, we will talk about the not so positive aspects of the deal.

Asia HY Monthly – Oil & Gas Update Following Russia’S Invasion Of Ukraine – Lucror Analytics

By Charles Macgregor

This month, we provide an update on the developments in the Oil & Gas sector following Russia’s invasion of Ukraine.

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.


Pre-IPO Betters Medical Investment Holdings – The Industry, the Business and the Concerns

By Xinyao (Criss) Wang

  • The MWA market that Betters belongs to has showed rapid growth and large potential. Obviously, Betters would benefit from it based on its existing products and leading market position.
  • However, the medical device industry in China is subject to strict policy supervision. It cannot rule out the possibility that the Company’s products would be included in the centralized procurement.
  • In terms of valuation, Micro-Tech Nanjing Co Ltd (688029 CH) could be a comparable company,  but Betters’ valuation should be lower than it.

Morning Views Asia: Gajah Tunggal, Times China

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.


Before it’s here, it’s on Smartkarma

China: SG Micro Corp, Shenzhen International, Pag, Suchuang Gas Corp, Jiangsu Hengrui Medicine and more

By | China, Daily Briefs

In today’s briefing:

  • CSI300 Index Rebalance Preview: 30 Potential Changes as Sector Rotation Continues
  • Shenzhen Intl (152 HK): It’s the Ability to Realise Underlying Value that Matters
  • PAG Pre-IPO – The Positives – Past Record Has Been Decent
  • Suchuang Gas (1430 HK): 10th June Court Meeting As Shares Remain Suspended
  • Jiangsu Hengrui Medicine (600276.CH) 2021/2022Q1 Results – Can You Afford to Wait?

CSI300 Index Rebalance Preview: 30 Potential Changes as Sector Rotation Continues

By Brian Freitas

  • We expect the maximum permitted 30 changes at a single review to take place at the June rebalance. Most changes are high probability.
  • We estimate a one-way turnover of 4.25% at the rebalance leading to a one-way trade of CNY 10.677bn.
  • Industrials, Information Technology and Materials sectors are expected to have the most net inclusions, while Health Care and Financials are expected to have the most net deletions.

Shenzhen Intl (152 HK): It’s the Ability to Realise Underlying Value that Matters

By Osbert Tang, CFA

  • Shenzhen International (152 HK) has secured pre-tax gain of HK$2.8bn from deemed disposal of Qianhai Business and this is another example for its ability to realise underlying asset value.  
  • SZI still holds a 50% stake in Qianhai Business, allowing it to capture further upside from this project. The transaction should also improve cash flow as land fees are repaid.
  • Other logistics transformation projects like the South China Logistics Park, which has an area even larger than Qianhai Business, will provide upside for the longer term. 

PAG Pre-IPO – The Positives – Past Record Has Been Decent

By Sumeet Singh

  • PAG aims to raise around US$2bn via its Hong Kong IPO.
  • PAG is an alternative investment firm focused on Asia-Pacific (APAC), it had approximately US$50bn in assets under management (AUM), as of Dec 21.
  • In this note, we will talk about the positive aspects of the deal.

Suchuang Gas (1430 HK): 10th June Court Meeting As Shares Remain Suspended

By David Blennerhassett

  • Suchuang Gas Corp (1430 HK)‘s Scheme Document is now out. The Scheme Meeting will be held on the 10th June with expected payment on or before the 21 June. 
  • The Independent Financial Advisor (Essence International) has concluded the offer by CR Gas (1193 HK) is fair and reasonable. 
  • The pain is almost over for shareholders. This is as good a deal one can expect under the circumstances. Shareholders should vote through the Offer resolutions and pocket the cash. 

Jiangsu Hengrui Medicine (600276.CH) 2021/2022Q1 Results – Can You Afford to Wait?

By Xinyao (Criss) Wang

  • The 2021 report is the worst ever annual report of Hengrui, with double drop in both revenue and net profit.2021Q4 and 2022Q1 are also the worst two quarters so far.
  • Although Hengrui has invested heavily in R&D and internationalization, it’s still trying to follow an established model with better security.Essentially, Hengrui is still the same Hengrui. Nothing has changed fundamentally. 
  • For now, Hengrui hasn’t released any signal for “a reversal”. If going bottom fishing, investors may have to take a long, uncertain journey with Hengrui. Can you afford to wait?

Before it’s here, it’s on Smartkarma