ChinaDaily Briefs

China: DiDi Global, Evergrande, SenseTime Group, Weibo Corp, Kuaishou Technology, Kwg Property Holding and more

In today’s briefing:

  • Didi (Didi US)’s Delisting and Its Implications for Non-Dual Listed China ADS
  • Didi’s Potential HK Listing & HFCAA-Driven Listings: A Look at Index (Fast) Entry
  • The Evergrande Quantum Kitty Living Its Ninth Life
  • SenseTime IPO Initiation: Big Brother
  • ECM Weekly (5th December 2021) – Weibo, Asymchem, Grab, Yonghe, Gushengtang, Siam Makro, SF Intra
  • China Evergrande – Pre-Announcement?
  • 2022 High Conviction – Kuaishou (1024 HK) – E-Commerce Live Broadcasting Still in Early Stage
  • Morning Views Asia: Evergrande, Honghua Group, Jingrui Holdings, KWG Living Group, Lippo Karawaci

Didi (Didi US)’s Delisting and Its Implications for Non-Dual Listed China ADS

By Jason Yap, CFA

  • Didi’s announced that it would delist from US and prepare for a public listing in Hongkong
  • Didi is racing against time to do so due to various factors such as, lock-up expiry, HK Stock Exchange review of listing applications, and potential cybersecurity review for HK issuers
  • There could be parallels in terms of key risks for other non-dual listed China ADSs

Didi’s Potential HK Listing & HFCAA-Driven Listings: A Look at Index (Fast) Entry

By Brian Freitas

  • Less than 6 months post listing on the NYSE, a regulatory crackdown has led to DiDi Global (DIDI US) announcing plans to delist from the US and list in HK.
  • Separately, the SEC has finalised rules for the Holding Foreign Companies Accountable Act (HFCAA), while the HKEX has eased listing thresholds for non-WVR companies looking to Secondary List in HK.
  • We look at stocks that could be included in the HSI, HSCEI, HSTECH, HSCI and FTSE China 50 indices either via the Fast Entry route or at a schedule rebalance.

The Evergrande Quantum Kitty Living Its Ninth Life

By Travis Lundy

  • Evergrande did a “Friday night drop” saying it might not be able to continue to perform its financial obligations. The Guangdong govt called Chairman Hui on the carpet. 
  • The PBOC, CBIRC, and CSRC appear to have thrown Evergrande management under the bus with simultaneous statements that Evergrande’s case is an individual one due to “reckless expansion.”
  • $82.5mm of coupons are due today at midnight. There is a demand for performance of a a guarantee on a US$260mm bond. Push has come to shove. 

SenseTime IPO Initiation: Big Brother

By Arun George

  • SenseTime Group (1475539D HK) is the largest AI software company in Asia as measured by revenue in 2020. It is set to launch an HKEx IPO to raise US$770 million.  
  • The fundamentals are mixed as high growth is accompanied by high customer concentration, an uncertain path to profitability, cash burn and moral concerns around “ethnic profiling software”. 
  • Overall, we believe the negatives outweigh the positives and we would give the IPO a pass. 

ECM Weekly (5th December 2021) – Weibo, Asymchem, Grab, Yonghe, Gushengtang, Siam Makro, SF Intra

By Zhen Zhou, Toh

  • Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.
  • Hong Kong ECM took yet another hit with China Tourism Group deciding to delay its H-Share listing citing poor market condition
  • On 2nd Dec 2021, SEC issued the final amendments for implementation of HFCAA which will China ADRs going forward. 

China Evergrande – Pre-Announcement?

By Thomas J. Monaco

  • Surprise Exchange Filing: In a surprise exchange filing, China Evergrande Group (3333.HK) [Evergrande] is planning to “actively engage” with offshore creditors on a restructuring plan; 
  • Ending Grace Period:Another Evergrande test comes on December 6, 2021, when the 30-day grace period ends on two USD bond coupon payments; and
  • Kaisa Risk:Kaisa Group Holdings (1638.HK) faces a potential USD 400 mn default a day after the Evergrande payments are due. 

2022 High Conviction – Kuaishou (1024 HK) – E-Commerce Live Broadcasting Still in Early Stage

By Ming Lu

  • We believe e-commerce live broadcasting is a promising business and KS is a promising operator of the business.
  • It is rare among internet-based companies that KS’ user growth is accelerating.
  • We believe the stock has an upside of 46% and a price target of HK$120.

Morning Views Asia: Evergrande, Honghua Group, Jingrui Holdings, KWG Living Group, Lippo Karawaci

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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