China: Aquila Acquisition Corporation, Country Garden Holdings Co, Aier Eye Hospital Group, Yuzhou Group and more

• Aquila Acquisition Corporation (AAC HK), a SPAC backed by China Merchants Bank, has applied for listing in Hong Kong.
• Aquila is the first SPAC company to seek listing since new rules allowing such listings came into effect on the 1 January 2022. 
• Aquila is targeting technology-enabled companies in “new economy” sectors (such as green energy, life sciences, advanced technology and manufacturing) in Asia, with a focus on China.

• Country Garden is widely seen as one of the few remaining large and better quality developers
• However, its share and bond prices fell sharply following a reportedly failed USD300 billion convertible bond capital raising effort, triggering investor concerns  
• In this Insight, we highlight the top of mind questions for Country Garden’s management

• According to public news, the recent bribery scandal of Aier Eye Hospital Group (300015 CH) has raised widespread concern. Shenzhen stock Exchange also issued a letter of inquiry.
• The development model based on M&A funds helps rapid expansion, but also leads to profit orientation and large goodwill balance, indicating potential risks.
• The biggest risk is the revolutionary technology/drugs to disrupt the business value of Aier’s medical services. So, Aier could be a short-term trade, but not a long-term hold. 

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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