In today’s briefing:
- Lifestyle (1212 HK)’s Scheme Gets Up
- China Internet Weekly (21Nov2022): NetEase, Blizzard, Tencent, Meituan, Tencent Music, JD Logistics
- Lygend Resources & Technology IPO – Margins Expected to Expand, Enticing at the Bottom End
- FTSE China 50 Index Rebalance Preview: JD Health Could Replace Xpeng
- Lifestyle International (1212 HK)’s Court Meeting – And that Is a Pass
- JD.com (9618 HK): 3Q22, Growth Recovered, Margin Reached Historical High
- Ant Group: Consumer Finance Finds Investors But Beijing Could Throw New Obstacles At Ant’s Direction
- Lygend Resources & Technology IPO: Valuation Insights
- Ascentage Pharma (6855.HK) – May Not Survive “This Winter”
- Morning Views Asia: Anton Oilfield, China Oil And Gas, Kawasan Industri Jababeka
Lifestyle (1212 HK)’s Scheme Gets Up
- Independent shareholders of Lifestyle International Holdings (1212 HK) comfortably voted through the Scheme resolution.
- 94.93% of stakeholders present (and via proxy) voted FOR, with 5.07% voting AGAINST.
- The last day of trading is the 6 December with payment expected on or before the 30 December.
China Internet Weekly (21Nov2022): NetEase, Blizzard, Tencent, Meituan, Tencent Music, JD Logistics
- The authorization contracts between Activision Blizzard and NetEase will terminate in January 2023.
- Tencent plans to distribute 91% of its Meituan share as dividend.
- JD Logistics revenue increased by 39% YoY and Net loss decreased to one tenth.
Lygend Resources & Technology IPO – Margins Expected to Expand, Enticing at the Bottom End
- Lygend Resources & Technology (LR HK) is looking to raise up to US$595m in its Hong Kong IPO.
- Lygend Resources & Technology (Lygend) is a nickel trading and production firm with a portfolio covering multiple areas across the nickel industry value chain.
- In this note, we will revisit our earnings assumptions and share our thoughts on valuation.
FTSE China 50 Index Rebalance Preview: JD Health Could Replace Xpeng
- At the end of the review period for the December rebalance, we see JD Health (6618 HK) replacing XPeng (9868 HK) in the FTSE China 50 Index.
- There is a very slim possibility of Longfor Properties (960) being deleted; it could be replaced with either Yum China Holdings Inc (9987) or PICC Property & Casualty H (2328).
- Short interest has stayed rangebound on JD Health (6618 HK) this year, while shorts have gone parabolic on XPeng (9868 HK) over the last few months.
Lifestyle International (1212 HK)’s Court Meeting – And that Is a Pass
- Lifestyle International Holdings (1212 HK)’s scheme resolution was approved at today’s court meeting – 94.93% of independent share votes cast FOR (2.31% of all independent shareholders AGAINST).
- This is in line with our expectations – in Lifestyle International (1212 HK)’s Wide Spread Heading into the 21 November Vote that despite the wide spread, the offer would succeed.
- At the last close and for the 30 December payment date, the gross and annualised spread to the offer is 2.0% and 20.6%, respectively.
JD.com (9618 HK): 3Q22, Growth Recovered, Margin Reached Historical High
- The revenue growth rate bounced back to 11% YoY in 3Q22.
- The operating margin improved to a historical high at 3.1%.
- We believe the stock price has an upside of 27% for year end 2023.
Ant Group: Consumer Finance Finds Investors But Beijing Could Throw New Obstacles At Ant’s Direction
- Earlier this year, an RMB 22.0bn fundraising was likely blocked by Beijing with the state-backed asset manager, China Cinda pulling out of the deal at the last moment.
- Several media outlets reported last week that Ant Group is pushing ahead yet again with an RMB 10.5bn fundraising effort for its Consumer Finance business.
- This fundraising could yet again face obstacles as Beijing might want Ant Financial Services Group (6688 HK) to surrender a controlling stake in the Consumer Finance business to state-backed firms.
Lygend Resources & Technology IPO: Valuation Insights
- Lygend Resources & Technology (2245 HK), a nickel play, has launched its IPO to raise up to US$595 million.
- We previously discussed the IPO in Lygend Resources & Technology IPO: Riding the Wave.
- In this note, we present our forecasts and look at valuation. Lygend is attractively valued at the IPO price range. We would participate.
Ascentage Pharma (6855.HK) – May Not Survive “This Winter”
- The R&D direction and field of Ascentage Pharma Group Corp (6855 HK) distinguish it from other domestic biotech companies. The Company has proved its R&D capability after the successful launch of olverembatinib.
- The uncertainties of commercialization performance and R&D risks would make it difficult for Ascentage to achieve break-even. Due to increasing cash flow pressure, Ascentage must first solve the survival problem.
- Considering the Risk return trade-off, we think Ascentage has short-term investment value only when it’s “extremely undervalued”.We suggest that it could be sold in a timely manner to secure gains.
Morning Views Asia: Anton Oilfield, China Oil And Gas, Kawasan Industri Jababeka
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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