In today’s briefing:
- StubWorld: Cathay Pacific – Still Grounded
- China/HK Breakout Points Need Follow Through
- ClouDr (智云健康) Pre-IPO – Strong Growth but Has Issues that Need to Be Clarified
- Kuaishou (1024 HK): Right Decision to Cut Costs, Still 20% Upside After 13% Rise
- Morning Views Asia: China South City, Sunac China Holdings
- Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
StubWorld: Cathay Pacific – Still Grounded
- Cathay Pacific Airways (293 HK) dangles bonuses for pilots and first officers amid Hong Kong’s stringent crew quarantine requirements.
- Preceding my comments on Cathay – and Swire Pacific (A) (19 HK)– are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
China/HK Breakout Points Need Follow Through
- A share bull wedge stands out after meeting the 15k downside target. H shares bullish near lower wedge support.
- The cut in key lending rates is spurring a push in HK/China, one needs to make sure this is not just another flash in the pan given a weak SPX.
- HSI impulse out of bull flag cleared wedge resistance and needs resolution. On watch to close higher level shorts.
ClouDr (智云健康) Pre-IPO – Strong Growth but Has Issues that Need to Be Clarified
- ClouDr Group (16897333D CH) (CDG) is looking to raise up to US$500m in its upcoming Hong Kong IPO.
- The firm is a digital chronic condition management solution provider and is market leader in China in terms of the number of SaaS installations in hospitals and pharmacies in 2020.
- In this note, we share our thoughts on the company’s business, financials, and operating metrics.
Kuaishou (1024 HK): Right Decision to Cut Costs, Still 20% Upside After 13% Rise
- The stock price has risen 13% since our last note, but we still believe there is an upside of 21%.
- The company is cutting employee benefits, from housing allowance to afternoon tea.
- We believe the operating loss will shrink significantly in the following two years.
Morning Views Asia: China South City, Sunac China Holdings
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.
Macro; Rating Changes; New Issues; Talking Heads; Top Gainers and Losers
US equity markets dropped again after with the S&P and Nasdaq down 1% and 1.2%. The latter is down 10% from its November 2021 high. Most sectors were in the red with Consumer Discretionary, Financials and IT down 1.4-1.8%. US 10Y Treasury yields eased 3bp to 1.85%. European markets closed higher with the DAX, CAC and FTSE up 0.2%, 0.6% and 0.4% respectively. Brazil’s Bovespa closed 1.3% higher. In the Middle East, UAE’s ADX and Saudi TASI were up 1.6% and 0.5%. Asian markets have opened broadly higher – HSI, STI and Nikkei were up 1.9%, 0.1% and 0.5% while Shanghai was down 0.2%. US IG CDS spreads were 0.6bp wider and HY CDS spreads were 3.5bp wider, EU Main CDS spreads were 0.1bp tighter and Crossover CDS spreads were 1.7bp tighter. Asia ex-Japan CDS spreads were 4.7bp tighter.
Before it’s here, it’s on Smartkarma
