ChinaDaily Briefs

China: Tianqi Lithium, Tencent, Hang Seng China Enterprises Index, Alibaba Group, Xiaomi Corp, Dental Doctor Medical Holding Group, Powerlong Real Estate Holdings and more

In today’s briefing:

  • Tianqi Lithium (9696 HK): Big Discount to A-Shares & Index Inclusion Timeline
  • Tianqi Lithium A/H Listing – Large Deal but Its Been Priced to Go
  • Tencent Bear Case for New Lows
  • Tencent: End of Another Quarter with No New Game Approval and Prosus Selling
  • Tianqi Lithium H Share Listing: Valuation Insights
  • HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week
  • Selling Shovels in a Gold Rush: SaaS Stocks Cashing in on Emissions Reporting Rules
  • Hang Seng Index Constituents 30th June 2022
  • Pre-IPO Dental Doctor Medical Holding Group – An Uncertain Outlook and Concerns About Profitability
  • Morning Views Asia: Powerlong Commercial Management Holdings, Sunac China Holdings

Tianqi Lithium (9696 HK): Big Discount to A-Shares & Index Inclusion Timeline

By Brian Freitas

  • Tianqi Lithium (9696 HK) is looking to sell up to 188.74m shares to raise up to US$1.97bn. Pricing at HK$69-82/share is a 52-43% discount to Tianqi Lithium (002466 CH).
  • Between 32-38% of the total offer size is being taken by 7 cornerstone investors and they are locked in for 6 months from listing date (expected 13 July).
  • Tianqi Lithium (9696 HK) could be added to MSCI China in November, FTSE All-World and FTSE China 50 in December. Southbound Stock Connect could come online soon after listing.

Tianqi Lithium A/H Listing – Large Deal but Its Been Priced to Go

By Sumeet Singh

  • Tianqi Lithium (TL) is looking to raise up to US$1.7bn via its H-shares listing. It undertakes mining of lithium ore and manufacturing of lithium concentrate, lithium compounds and derivatives.
  • TL was the largest producer of mined lithium globally in terms of output in 2020 and ranked third in terms of revenue generated from lithium in 2020.
  • In this note, we take about the deal pricing and run the deal through our ECM framework.

Tencent Bear Case for New Lows

By Thomas Schroeder

  • Tencent exhibits a compelling bear case in the form of triangle slated to break down to press on macro 310 support. A wave 5 new low near 280/263 is targeted.
  • MACD turning down from macro resistance stand out as a compelling direction signal that aligns with the bearish triangle a-b-c bounce count.
  • This new low would (terminal wave 5 cycle trough) represent a macro buy entry to challenge the 420 macro bull/bear line.

Tencent: End of Another Quarter with No New Game Approval and Prosus Selling

By Shifara Samsudeen, ACMA, CGMA

  • Tencent’s share price is down 6.5% over the last five days as largest shareholder Prosus sais that it would sell down Tencent shares to fund the buyback of Prosus/Naspers shares.
  • Though Chinese regulators removed the ban on new game approval in April this year, none of Tencent’s new game titles received approvals in over the last two months.
  • Tencent’s 1Q2022 earnings were weak and we expect 2Q2022E earnings to further decelerate with resurgence of Covid cases in China alongside weak macroeconomy.

Tianqi Lithium H Share Listing: Valuation Insights

By Arun George

  • Tianqi Lithium (9696 HK) has launched its H Share listing at an indicative price range of HK$69.00-82.00 per share. Pricing is on 6 July and listing on 13 July.
  • Tianqi Lithium (002466 CH)‘s AH discount range of 52.9%-44.0% is reasonable in the context of Ganfeng Lithium (1772 HK)’s average AH discount is 38.5% since its H Share listing.
  • Our relative valuation analysis suggests that Tianqi’s H Share valuation is attractive in comparison to median peers’ multiples. 

HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week

By Brian Freitas


Selling Shovels in a Gold Rush: SaaS Stocks Cashing in on Emissions Reporting Rules

By Kyle Rudden

  • Notwithstanding bright spots and positive long-term outlook, the ESG gold rush has created an acute state of chaos. Regulatory flux. Rampant greenwashing. ESG litigation. Elon and S&P.
  • The silver lining? New ESG-related investing opportunities emerging from all the chaos; stocks poised to benefit, regardless of who else wins or losses. The new shovel-sellers, as it were.
  • One large opportunity is driven by new greenhouse gas (GHG) reporting regulations, specifcally leading GHG emissions software-as-a-service (SaaS) and platform-as-a-service (PaaS) stocks.

Hang Seng Index Constituents 30th June 2022

By Untying The Gordian Knot

  • Hong Kong Stocks are more excited than the mainland about cutting the Quarantine period from 14 to 7 days.
  • The 25th Anniversary of the Hong Kong handover means more stability ahead of celebrations and trading dominated by position squaring.
  • Only Xiaomi shows signs of a breakout. It broke the downtrend from August 2021 with the inside days in the last two trading sessions. It looks like it will test the breakout and cover it next week.

Pre-IPO Dental Doctor Medical Holding Group – An Uncertain Outlook and Concerns About Profitability

By Xinyao (Criss) Wang

  • Dental Doctor has not established core competitiveness and high moat, and has to invest more on marketing and promotion to attract customers and drive growth.
  • The lack of dentists, weak talent and training system as well as high dentist turnover rate would be big concerns for the Company’s long term development, especially for nationwide expansion.
  • This industry has not yet entered the profit mode. Most of chain dental services providers are still in the stage of cash-burning expansion. So, we are conservative about the Company’s outlook.

Morning Views Asia: Powerlong Commercial Management Holdings, Sunac China Holdings

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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