China: 51 Job Inc Adr, JL Mag Rare-Earth Co Ltd, Hang Seng Tech Index, CIMB Group Holdings, Hangzhou Bioer Technology, Kwg Property Holding and more

• Not an overreaction after all. After shares closed down 19.2% on the 8 November, 20% adrift of indicative terms, that appeared overdone.
• Now 51 Job Inc (JOBS US) has announced the Offeror has proposed reducing the merger consideration from US$79.05 in cash per common share to US$57.25.
• Shares closed up, but still at a 14.5% gross spread to terms. The new construct, and the reasons for doing so, are decidedly baffling.

• JL Mag Rare-earth Co. Ltd (JLM) raised around US$544m via its H-shares listing. 
• JLM is a producer of high-performance REPMs. It ranked first in the world by high-performance REPM production volume in 2020 with a market share of approximately 14.5%.
• In this note, we look at the allocation results and trading dynamics.

• A share pop a flash in the pan and still shows heavy price action as the bull wedge matures into late January.
• HSI is meeting the fresh short target zone near 24,700 with a minor new low in store for late January.
• HK tech is making strides to bottom as RSI divergence matures but still needs some final strokes for a higher conviction base.

• The consortium’s updated transaction has lowered the offer price -27.6% to $57.25 in cash per ADS, a 24.92% premium to the last trading price (11 January 2022).
• The combination of the dramatically lower price, spurious justification for lowering the price and the shares recently trading higher than the revised price is unlikely to win over minorities.
• Meeting the two-thirds shareholder approval threshold is likely a challenge due to the need to convince around 27% of disinterested shareholders to vote in favour of the transaction. 

• Bioer designs, manufactures and sells three categories of PCR products: instruments, reagents and consumables. With the spread of COVID-19, the company experienced strong growth in revenue and margin improvements. 
• The company has filed for an IPO to list its shares on the Hong Kong Stock Exchange and plans to raise proceeds of around US$200m
• Strong growth in Bioer’s revenue over the last two years was predominantly driven by the spread of COVID-19. We are concerned on the company’s ability to maintain its revenues post-COVID.

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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