Daily Brief China: Onewo Space-Tech, Meituan, Aier Eye Hospital Group, CPMC Holdings, Country Garden Holdings Co and more

• Onewo Space-Tech (ONEWO HK) (OST) aims to raise upto US$784m in its Hong Kong IPO. OST is a property management service provider primarily owned by China Vanke (2202 HK). 
• As per Frost & Sullivan, amongst the residential community service providers in China, OST ranked first. It also ranked first in the commercial space integrated services market in China.
• In this note, we will run the deal through our ECM framework and talk about valuations.

• In July, Meituan’s user base exceeded Ele.me and Ele.me’s active user base decreased by 24% YoY.
• In China, Monthly active user bases of local life and food delivery recovered from May to July.
• We believe Meituan’s stock has only a downside of 6% for year end 2023.

• The fundamental changes in the population structure will lead to a decline in the growth rate of the total retail sales of consumer goods. The long logic doesn’t exist.
• Aier has hit a growth ceiling. As the endogenous demand will be stepped downward gradually, the performance of Aier will further decline. The downward elasticity of valuation is greater.
• It is still difficult for healthcare sector to have its own independent growth logic. The bottom of healthcare sector would appear after the collapse of Aier’s valuation.

• Underpinned by higher ASP and sequentially lower input costs, CPMC Holdings (906 HK) should achieve better margin in 2H22. Its 17% fall in share price YTD makes it appealing.
• Average aluminum price was down 14% so far in 2H22, vs. 1H21, good to its costs. Well-controlled selling and administrative costs will help to support profitability recovery.
• New two-piece can capacity will grow by 54% over the next three years as 5 production lines are expected to be added. Most of them already have demand lined up.

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.

• China Vanke
• Country Garden Holdings Co