ChinaDaily Briefs

China: Sunac China Holdings, Water Oasis, Huitongda, ABM Investama, Bilibili Inc, Sinopharm Group Co Ltd H, Qingdao Ainnovation Technology Group Co Ltd, Betta Pharmaceuticals, West China Cement and more

In today’s briefing:

  • Sunac China Placement – Previous Deal Didn’t Do Much, This Won’t Move the Needle Either
  • Water Oasis, Execution Makes It More Compelling
  • Huitongda IPO: Testing Times
  • Asia HY Monthly – 2021 In Review And 2022 Outlook – Lucror Analytics
  • Bilibili Makes a Late Entry into Livestreaming E-Commerce; Timing Is Not Just Right
  • Huitongda Network IPO Initiation: Clicks to Bricks
  • Sinopharm Group (1099 HK): Stable Pharma Distribution Business Despite Weak Demand for Vaccine
  • Qingdao AInnovation Technology Group Pre-IPO – Has Grown Fast, but Holds an Unproven Track Record
  • Pre-IPO Betta Pharmaceuticals – Lack of Staying Power
  • Morning Views Asia: Powerlong Commercial Management Holdings, Tata Motors ADR, West China Cement

Sunac China Placement – Previous Deal Didn’t Do Much, This Won’t Move the Needle Either

By Sumeet Singh

  • Sunac is looking to raise around US$500m via a top-up placement.
  • The company last raised cash in Nov 21 when it undertook a top-up placement worth US$500m and raised another US$270m via  selldown in Sunac Services.
  • That deal didn’t end up doing well and this deal as well won’t move the needle much, in terms of bringing down debt.

Water Oasis, Execution Makes It More Compelling

By Sameer Taneja

  • Water Oasis (1161 HK) trades at a 6x FY22 ( Sept end ) PE with 31% of its market capitalization in cash ( implying ex-cash 4x PE ). 
  • For FY21, Water Oasis (1161 HK) paid a 22 cent dividend implying a 12.43% dividend yield. We forecast a forward yield of 14%.
  • The company will continue to execute as it opens newer stores and beds down its M&A for a 15% CAGR revenue growth.

Huitongda IPO: Testing Times

By Oshadhi Kumarasiri

  • Alibaba backed B2B e-commerce business, Huitongda (1566215D CH) is looking to test the HK IPO market with its $500m IPO while Beijing is on the attack on Chinese new economy stocks.
  • The company’s focus on rural and lower tier markets sounds a promising prospect amidst the Chinese’s government’s push for common prosperity.
  • Nevertheless, we think that investors are more likely to focus on the barrage of regulatory assaults and the fragilities of Huitongda’s business model.

Asia HY Monthly – 2021 In Review And 2022 Outlook – Lucror Analytics

By Charles Macgregor

This month, we review the developments of 2021, and give our outlook for the year ahead. 

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks, and discussing specific areas of interest in the “In-Focus” section. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.


Bilibili Makes a Late Entry into Livestreaming E-Commerce; Timing Is Not Just Right

By Shifara Samsudeen, ACMA, CGMA

  • Bilibili launched a shopping cart feature (Xiaohuangche) recently on its livestreaming platform which enables users to purchase goods while watching a live-stream.
  • This comes at a time; China’s common prosperity crackdown has set its eyes on livestreaming e-commerce.
  • Bilibili has been looking at ways to improve its monetisation to reduce losses, but we think the new initiative will likely add further pressure on deteriorating margins.

Huitongda Network IPO Initiation: Clicks to Bricks

By Arun George

  • Huitongda (1566215D CH) is a fast-growing commerce and service platform focused on China’s lower-tier retail market. It is pre-marketing an HKEx IPO to raise US$400-500 million.
  • The positives are a large addressable market, solid top-line growth and profitability. The key negative is the low margin profile which reflects a fragmented and competitive market. 
  • Overall, we think that the positives outweigh the negatives and this IPO is worth a closer look.   

Sinopharm Group (1099 HK): Stable Pharma Distribution Business Despite Weak Demand for Vaccine

By Tina Banerjee

  • With its nationwide distribution and delivery network, Sinopharm Group Co Ltd H (1099 HK) remains a beneficiary of increasing adoption of China’s VBP scheme for drug procurement.
  • Despite decreasing demand for Sinopharm’s COVID-19 vaccine, its pharmaceutical distribution business is expected to remain stable, driven by the steady recovery in China’s healthcare industry.
  • The company is successfully promoting fast-growing oncology products. Its strategic partnership with I-Mab (IMAB US) further strengthens competitive edge, as I-Mab has a robust pipeline for China market.

Qingdao AInnovation Technology Group Pre-IPO – Has Grown Fast, but Holds an Unproven Track Record

By Clarence Chu

  • Qingdao Ainnovation Technology Group Co Ltd (1853807D CH) is looking to raise up to US$200m in its Hong Kong IPO.
  • Qingdao AInnovation Technology Group is an AI solutions provider offering full-stack AI-based products and solutions. 
  • While revenue has grown since inception, margin improvement can’t be attributed solely to better cost controls. It also has an unproven track record and operates in a highly fragmented market. 

Pre-IPO Betta Pharmaceuticals – Lack of Staying Power

By Xinyao (Criss) Wang

  • If the R&D pipeline projects are not recognized by international capital,the main reason could be either the product development progress is lagging behind or the projects are not good enough.
  • The real innovative drugs would not be affected by generics that easily, and are to overturn the size of the old drug market.
  • The real risk of Betta would be revealed in the next few years as VBP promotes. So, we are conservative about the Company’s outlook at the current stage.

Morning Views Asia: Powerlong Commercial Management Holdings, Tata Motors ADR, West China Cement

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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