China: AKM Industrial, Qingdao Ainnovation Technology Group Co Ltd, Air China Ltd (H), Asia High Yield Bond Index, China South City, Wanda Commercial Management Group, Shenzhen Chipscreen Biosciences-A and more

• Flexible printed board player Akm Industrial (1639 HK) has announced a pre-conditional Scheme from Alpha Luck and AKM Meadville at HK$1.82/share. The Offer price will NOT be increased.
• Alpha Luck is ultimately held by SASAC and AKM Meadville by the government of Haicang District, Xiamen. The two intend to hold 40:60 respectively in the unlisted vehicle. 
• Various PRC regulatory approvals are required. This appears a transaction geared to complete. Timing is the key risk to the deal.

• Qingdao Ainnovation Technology Group Co Ltd (1853807D CH) is looking to raise up to US$157m in its Hong Kong IPO.
• Qingdao AInnovation Technology Group is an AI solutions provider offering full-stack AI-based products and solutions. 
• While we don’t have a fundamental issue with the listing, at asking valuations, the firm appears to be fairly valued with limited upside on its FY23 numbers. 

• AInnovation Technology (AIT HK) is a fast-growing enterprise AI solutions provider in China. It has launched an HKEx IPO to raise up to US$157 million. 
• In AInnovation Technology IPO Initiation: Code Amber, we stated that the negatives outweigh the positives and we would give the IPO a pass.
• Our valuation analysis suggests that the IPO price is fair. Due to our concerns about the fundamentals, we remain on the sidelines. Pricing is 20 January, listing on 27 January.

• Passenger traffic momentum of Air China Ltd (H) (753 HK) has picked up in Dec and it also narrowed down it gap against China Southern Airlines (1055 HK). 
• The resurgence of international traffic over the next two years with more border openings will provide significant benefits to Air China, helping it to recover its depressed load factors.
• Air China outperformed HSCEI by 3.6pp YTD, but we still consider its P/B of 1.0x, or around historical average, not stretched. Strength of Rmb is also a potential positive factor.

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.

• China South City
• Times China

• Wanda Commercial Management Group (WCMG) is looking to raise up to US$4bn in its upcoming Hong Kong IPO.
• WCMG is a commercial operation service provider. As of Oct 2021, the firm managed 398 malls with total gross floor area (GFA) under management of 56.5m sqm.
• In this note, we will talk about the positive aspects of the deal.

• The small market space of peripheral T-cell lymphoma indication and the fierce market competition of other indications, products and candidates make the Company’s future commercialization performance uncertain. 
• The continuous large investment in R&D, high selling expenses, and declining R&D expending capitalization would further drag down profitability.
• So, our view is that we are conservative about Chipscreen Biosciences’s outlook at the current stage.