China: HKEX, Citic Securities (H), Hongkong & Shanghai Hotels, XPeng, Yorkey Optical International Cayman, Dong E E Jiaoco Ltd A, Asia High Yield Bond Index, Agile Property Holdings, Wanda Commercial Management Group and more

• In this latest installment in a series dating back to March 2018, I’ve analysed 4,400 moves over three years inside CCASS, targeting >5% of shares outstanding of individual stocks. 
• The data continues to bear out the overall underperformance of stocks that exhibit large CCASS moves. 
• But it also serves to illustrate that when a certain % move takes place in tandem with a certain market capitalisation, there is a tendency for outperformance. 

• Citic Securities has launched a Rights Offering for H Shares and A Shares. The price is basically the same, which means a very big discount for A holders.
• The timing is different, and the H share Rights Issue process is drawn out past Chinese New Year. This may affect takeup rates and bullishness.
• The difference in capital approach between Dual H/A-share listed SOEs like Citic Securities and like China Mobile is stark. The dichotomy may expand. 

• The Kadoorie family, Hongkong & Shanghai Hotels (45 HK)‘s major shareholder, is paying HK$2.63bn to increase its holding to 72.43% from 59.98%.
• The price under the SPA is $12.80/share, a 92.5% premium to the undisturbed price. Shares promptly gained 19.5% yesterday. No Offer was triggered. 
• What is conveniently left out of the announcement, and in media articles, is the original owner of these shares – Tai United Holdings (718 HK).

• Short term interruption from chips and LFP battery shortage would be eased in 2H2022.
• Xpeng’s monthly delivery would ramp up to 30,000 cars with the launch of G9 in 3Q2022.
• We estimate Xpeng’s net profit will turn positive at the end of 2022, which would trigger further re-rating of the stock to HK$300 (or US$77).

• 2021 full year ADT has grown 29% year-over-year compared with 2020. Trading activities in December continued to slowdown to year-end given the relative weak market sentiment and policy uncertainty.
• We expect HKEX (388 HK) upcoming quarterly earning release (on Feb. 24) will be muted and estimate its 4Q21 revenue and profit will decline 3% and 7% year-over-year respectively. 
• However, we remain bullish on HKEX (388 HK) with the view that China economy will likely rebound in 2022, which will drive the rebound of IPO activities and trading volume.

• Yorkey Optical International Cayman (2788 HK)‘s Scheme Document is now out, with the Court Meeting to be held on the 22 February.
• Asia Optical (3019 TT) is offering HK$0.999/share, a 75.3% premium to the undisturbed close. David Webb has given an irrevocable undertaking to vote his shares in favour of the Scheme 
• This transaction is all stitched up. The Independent Financial Advisor considers the terms to be fair and reasonable. 

• The high price of EJiao discouraged consumers, leading to increasing inventory backlog in the distribution channel and reduction in payment collection, which finally resulted in Dong-E-E-Jiao’s net loss in 2019.
• Although the performance has showed a recovery trend since 2020,concerns on raw material shortage, low inventory turnover, single product structure, high selling expense ratio and fierce market competition still remain.
• There is still a long way to go for the Company to get back to peak, so we are conservative about Dong E E Jiaoco Ltd A (000423 CH)’s outlook.

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.

• Olam International

• 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 not so positive aspects of the deal.