ChinaDaily Briefs

China: Hang Lung, Shanghai Bio-Heart Biological Technology, Kangmei Pharmaceutical Co A, CANbridge Pharmaceuticals, Asia High Yield Bond Index, Jafron Biomedical Co Ltd, HSBC Holdings, Silergy Corp and more

In today’s briefing:

  • StubWorld: Scion Adriel Likes Hang Lung Group Shares
  • Shanghai Bio-Heart IPO: Strong Product Candidates but For Those Willing to Wait
  • Kangmei Pharmaceutical (600518 CH) – First Class Action Lawsuit in China and Its Implications
  • CANbridge (北海康成) Pre-IPO: Not the Cup of Tea for Secondary Market
  • CapitaLand Divests Stake in One George Street
  • Jafron Biomedical (300529.CH) – Logic Changes Due to The Centralized Procurement
  • 6 New Deals incl. HSBC, Temasek, Wespac; Macro; Rating Changes; Talking Heads; Top Gainers and Lo…
  • Silergy-KY (6415 TT, TRADING BUY, NTD5,150)

StubWorld: Scion Adriel Likes Hang Lung Group Shares

By David Blennerhassett

  • Hang Lung (10 HK) is coming up “expensive” on my monitor, yet remains one of the cheapest property plays in Hong Kong on a P/B metric.
  • Preceding my comments on Hang Lung are the weekly setup/unwind tables for Asia-Pacific Holdcos.
  • These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation threshold – the $ value of the holding/opco held, over the parent’s market cap – >20%.

Shanghai Bio-Heart IPO: Strong Product Candidates but For Those Willing to Wait

By Shifara Samsudeen, ACMA, CGMA

  • Bio-Heart is a leading innovative interventional cardiovascular device company focused on two therapies for the treatment of coronory/peripheral artery diseases and uncontrolled and resistant hypertension.
  • Bio-Heart is a leading innovative interventional cardiovascular device company focused on two therapies for the treatment of coronory/peripheral artery diseases and uncontrolled and resistant hypertension.
  • The company has filed for an IPO on the HKEx to raise about US$200-300m and the company’s application has been approved.

Kangmei Pharmaceutical (600518 CH) – First Class Action Lawsuit in China and Its Implications

By Jason Yap, CFA

  • Kangmei Pharmaceutical is a large drugmaker listed on the Shanghai Stock Exchange and was embroiled in a USD4 billion accounting fraud in 2019
  • On 12 November 2021, the Guangzhou court made a landmark ruling on Class Action Lawsuit against Kangmei Pharmaceutical 
  • This increases the costs of fraud (including potential criminal charges) for delinquent issuers and should reduce fraud occurrences and boost investor confidence in China’s capital markets  

CANbridge (北海康成) Pre-IPO: Not the Cup of Tea for Secondary Market

By Ke Yan, CFA, FRM

  • CANbridge, a China-based rare disease-focused biopharmaceutical company, plans to raise up to USD 200m via a Hong Kong listing.
  • We look at the company’s commercialized products (Caphosol, Nerlynx, Hunterase) and the core product CAN008.
  • We provide our thoughts on the rare disease drug market in China and the company’s business model.

CapitaLand Divests Stake in One George Street

By BondEvalue

CapitaLand Integrated Commercial Trust’s (CICT) announced that the trust will divest its stake in One George Street to SG OGS , a private company, at a valuation of S$1.28bn.CICT will receive ~S$640.7mn, or 50% of the consideration for the sale. SG OGS has paid 10% of the consideration, or S$128.1mn as deposit upon signing the sale and purchase agreement with the balance to be paid when the sale is completed. Post-divestment, CICT will receive ~S$344.8mn in net proceeds, which its manager said will give it greater flexibility to repay debt, finance any capex and asset enhancement works, investments or finance general corporate and working capital requirements. Business Times notes that th e sale is not expected to have any material effect on the NAV (Term of the Day, explained below) per unit or distribution per unit of CICT for its financial year ended Dec 31, 2021.

Jafron Biomedical (300529.CH) – Logic Changes Due to The Centralized Procurement

By Xinyao (Criss) Wang

  • In “Investment Opportunities in China Medical Device Industry”,we analyzed Jafron Biomedical Co Ltd (300529 CH). However,the stock price has fallen about 45% from the record high of RMB103/share in May.
  • The concerns about centralized procurement and the risk of single product structure cast doubts on the Company’s outlook.
  • Investors could choose to take advantage of the positive momentum in the short-term,but it is not recommended to hold for a long time since the logic of Jafron has changed.

6 New Deals incl. HSBC, Temasek, Wespac; Macro; Rating Changes; Talking Heads; Top Gainers and Lo…

By BondEvalue

US equities ended slightly higher with the S&P up 0.7% and Nasdaq up 1%. Sectoral gains were led by Communication Services and IT, up 1.7% and 1.2% respectively. US 10Y Treasury yields were 1bp tighter at 1.55%. European markets were mixed with the DAX and CAC up 0.1% and 0.5% while FTSE ended 0.5% lower. Brazil’s Bovespa ended 1.2% lower. In the Middle East, UAE’s ADX was up 0.7% and Saudi TASI was up 0.1% on Sunday. Asian markets opened broadly mixed – Shanghai and HSI are down 0.3% and 0.1% while STI and Nikkei were up 0.2% and 0.4% respectively. US IG and HY CDS spreads were 0.6bp and 1.5bp tighter. EU Main CDS spreads were flat and Crossover CDS spreads were 0.7bp wider. Asia ex-Japan CDS spreads tightened 1bp.

Silergy-KY (6415 TT, TRADING BUY, NTD5,150)

By Capital Securities

Better-than-expected GM; recommend TRADING BUY . Silergy’s 3Q21 GM beat our forecast. Given tight foundry capacity and product/client mix improvement, Silergy’s GM is expected to stay at the high level in FY22. Additionally, Silergy guides a growth of 20~30% in FY22 revenue.. Silergy’s stock price hit our prior TP, partially pricing in catalysts. Recommend TRADING BUY with TP of NTD5700 (70x FY22 PER).

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