China: MTR Corp, NIO Inc, GOME Retail Holdings, Weilong Delicious Global, Arrail Group, Rainmed Medical, Central China Real Estate and more

• HK reopening is debatable and seems to be very hard to predict as the Chinese government is keen to keep zero COVID stands although recent quarantine time reduction is positive. 
• The number of passengers remains weak although the shorter quarantine reduction could provide short-term relief to the share price. 
• Valuation looks undemanding compared to the peers although the outlook is more uncertain. Stay out for now. 

• Nio Inc. was targeted by Grizzly Research and accused of likely using an unconsolidated related party to exaggerate revenue and profitability. This unconsolidated related party was named as Wuhan Weineng.
• As per the report, Weineng had helped Nio inflate revenue and net income by approx. 10% and 95% respectively in 9M2021, and FY2021 earnings beat by at least 60%.
• In this insight, we take a look some of the allegations and have assessed the merits of the claims by Grizzly Research.

• As the mismatch between short-term assets and liabilities expands, GOME is raising HK$776.5m at HK$0.40 per-share, which is a 12.1% discount to the closing price on 27th June 2022.
• This is clearly insufficient to pay down GOME Retail Holdings (493 HK)‘s RMB 40.0bn short term debt and accounts payable obligations falling due in the next 12 months.
• With the omni-channel transformation taking longer than expected to turn around performance, the company might find it difficult to refinance the debt and maintain the supply chain as usual.

• Weilong Delicious Global (WDG HK) has refiled its PHIP with an aim to raise US$500 million, half of its previous ambition to raise US$1 billion. 
• We have previously discussed the IPO in Weilong Delicious IPO Initiation: Tasty Bite and Weilong Delicious IPO: Mixed Update. 
• The PHIP which discloses the 2021 results and recent developments point to reducing growth rates and cost pressures. We would pass on the IPO.

• Despite regional lockdowns caused by COVID-19 during most part of FY21, Arrail Group (6639 HK) posted 7% y/y growth in revenue, driven by 14% y/y growth in total patient visits.   
• China dental services market is growing at an average 20% per annum. Arrail’s low debt and strong cash position should support its business expansion plans to grab the market opportunity.
• Despite competition, the company is expected to report accelerated double-digit revenue growth in next three years, by leveraging on its market leadership positioning and favorable macro tailwind.

• The combination of FFR and IMR can provide a complete functional evaluation from epicardial arteries to myocardial microcirculation,pushing the precise diagnosis and treatment of coronary disease into a new era.
• Rainmed’s caFFR System and caIMR System have obvious technical and first-mover advantages; The CE certificate also opens up the imagination space of product commercialization (such as developing markets).
• However, the concerns on current sales model, market acceptance, medical insurance coverage, cash flow pressure and market sentiment when IPO should also not be neglected. 

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.

• Central China Securities
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