China Archives | Page 114 of 199 | Smartkarma

• Currently at 69 index members, we just could reach 80 constituents at the December rebalance. That would leave the index committee to plan the move to 100 constituents in 2023.
• We list 10 potential inclusions to the index in December. One-way turnover is just under 4% and inclusions of all stocks will increase index market cap coverage significantly.
• Shorts are more than 3% of free float on five of the potential inclusions and these stocks could see some short covering ahead of the announcement of the changes.

• CALB raised around US$1.2bn in its Hong Kong IPO, after pricing its offering at the low-end.
• CALB undertakes design, R&D, production and sales of EV batteries and Energy Storage Systems (ESS) products.
• In this note, we will talk about the demand for the deal and other trading dynamics.

• Dragged by partial disposal by its parent, Fosun Tourism (1992 HK) had a bad month in Sep and its share price is now back to early-2020 level. 
• 1H22 has seen good loss reduction and 2H22 outlook is on positive trend. Booking momentum at Club Med is encouraging and operational capacity will return to the 2H19 level.
• Atlantis Sanya has experienced gradual recovery in the Golden Week after the large-scale lockdown of Sanya in Aug. Completion of Lijiang and Taicang FOLIDAY Town will boost FY23.

• Hygeia had good performance in 2022H1,mainly because its business layout is mostly in lower-tier cities and its medical services belong to rigid demand. So, the impact of pandemic was limited.
• Hygeia is better than Topchoice and Aier Eye Hospital. The business model of specialized hospital is better than that of general hospital. Among for-profit hospitals, we are bullish on Hygeia.
• We think Hygeia will keep strong growth momentum in the future due to high demand. But pandemic and policy risk would weigh on valuations/sustainable bullish sentiment. Short-term trades are recommended.

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

• We see 4 potential inclusions to the FTSE All-World and All-Cap indices that will be implemented at the close of trading on 16 December.
• There are a couple of other recent listings that are close to the investable market cap threshold and could be added to the All-Cap index.
• Given the lack of IPO in the April to August period, the rebalance will be quieter than usual though lock-up expiries will keep things interesting.

• The global game market can shrink in 2022, which will impact Chinese game companies’ global diversification.
• NetEase formally launched its own social networking service to compete with Tencent.
• Kuaishou announced that it would launch an e-commerce channel on its App’s homepage.

• Stock has fallen 17% since Sep 15th, and implied vols have picked up
• The fundamentals remain strong and tech momentum may be shifting
• We suggest two directional trades using options to play earnings

• United Imaging’s high valuation is driven by pandemic/policy dividends. After the impact of COVID-19 fades,the market needs new stories to judge a sustainable business model with increasing investment value.
• Although in the name of domestic substitution of high-end medical imaging equipment, most of sales still come from middle/low-end products. The real competitiveness in high-end market remains to be seen.
• United Imaging’s fundamentals and prospects hardly justify a market value of more than RMB100 billion. It’s expected that the stock price will return to rationality in the future.

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.

• Road King Infrastructure
• Vedanta Resources

• Cubic City Service Apartment Group (CCSAG HK) is looking to raise about US$500m in its upcoming Hong Kong IPO. The deal will be run by Morgan Stanley and CCB International. 
• Cubic City Service Apartment Group (CCSAG) is a rental apartment services platform, which pioneered the centralized rental apartment model in China, according to the company. 
• It provides rental apartments in centrally managed buildings with modern facilities. As of 30 Jun 2022 (1Q23), the company operates 76,190 apartments nationwide across 394 locations in 26 cities. 

• EVOC Intelligent Technology Company Limited H (2308 HK)‘s H Shareholders’ class meeting is scheduled for 19 October. The IFA considers the offer to be fair and reasonable.
• The key conditions are approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders’ rejection). There is no minimum acceptance condition.
• The offer is attractive and should gain approval. At last close and for a 7 November payment, the gross and annualised spread to the offer is 2.9% and 26.0%, respectively. 

• Historically, when Swire (B) (87 HK) / Swire (A) (19 HK) gets more than 6% from 3mo Avg VWAP Ratio, there is statistically significant reversion. We are now at 6.8%. 
• The SATS (SATS SP)  / WFS transaction appears all stitched up with major shareholder Temasek backing the deal. The acquisition is expected to close in 1Q23, subject to regulatory clearance.   
• We had the heads up days (or a week plus) ago, and now it is official. Bain has now launched its Tender Offer for Hitachi Metals (5486 JP) at ¥2,181/share.

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. However, such disclosures are by no means an absolute. 
• These insights may also flag those companies where shares have been pledged. Stocks mentioned include Swire Pacific (B) (87 HK), Joinn Laboratories (H) (6127 HK), and Techtronic Industries (669 HK).

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• On the IPO front, all listing this week failed to impress which means that the HK and Korean markets are probably in for a slow end of the year.
• Taiwan Cement (1101 TT) and Embassy Office Parks REIT (EMBASSY IN) were the two large placements this week. We also looked at possible Tencent (700 HK) linked blocks.

• There are 49 – mostly firm, mostly Asia-Pac – transactions currently being discussed and analysed on Smartkarma. Inside is a timetable of upcoming key events for each deal.
• Three new deals were discussed this week: Boyu’s Offer for Jinke Smart Services (9666 HK);  Chinachems’s Offer for Pine Care (1989 HK), & Accenture Japan bid for ALBERT (3906 JP).
• Key updates took place for Hitachi Metals (5486 JP) and MACA Ltd (MLD AU) .

• For the month of September, 11 new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$3bn.
• The average premium for the new deals announced (or first discussed) in September was ~40%, and a year-to-date average of 39%.
• This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. China Jinmao Holdings
2. Guangzhou R&F Properties
3. Sunac China Holdings
4. Evergrande
5. Central China Real Estate

and more…

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. China Jinmao Holdings
2. Guangzhou R&F Properties
3. Sunac China Holdings
4. Evergrande
5. Central China Real Estate

and more…

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

We view China SCE as “High Risk” on the LARA scale. Our assessment reflects the risks stemming from the company’s fluctuating performance and high financial leverage. SCE specialises in mid-range and high-end residential properties. It has an established presence in Quanzhou and Xiamen, which are both economically vibrant markets with high growth potential. The company has also been diversifying outside Fujian, with the Yangtze River Delta region now its largest contributor in terms of contracted sales.

The bulk of the land bank is located in Tier 1 and 2 cities, which will likely see a rebound when the industry recovers. We like SCE’s diversification and geographical coverage, but remain concerned about execution risks amid the competitive operating environment. Separately, the company’s use of co-operative projects (significant use of JVs and material minority interest) points to off-balance-sheet debt, which would in turn suggest poor corporate governance.

Our fundamental Credit Bias on SCE is “Negative” on account of the weak contracted sales, declining liquidity and weakened credit metrics amid the industry downturn. The company also faces heightened refinancing risk for its upcoming debt, while access to onshore funding remains uncertain. Moreover, the company’s increased dependency on secured borrowings to raise funds will reduce its financial flexibility. That said, SCE intends to dispose of assets to raise cash, which could temporarily alleviate the liquidity pressure. Its land bank includes land in upper-tier cities, where economic fundamentals might be stronger and sales should rebound once the operating conditions improve.

Controversies are “Immaterial” despite reputational risk on account of the increasing number of property-quality related disputes with customers. The ESG Impact on Credit is “Neutral”. We note positively the company’s willingness to honour debt obligations.

• Leapmotor (9863 HK) raised around US$800m in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
• As of end Jun 22, it had delivered a total of 104,829 cars with most of its sales coming from its mini units, T03.
• In this note, we will talk about the demand for the deal and other trading dynamics.

• Earlier today, Bilibili (9626 HK) announced the voluntary conversion of its Secondary Listing on the HKEX (388 HK) to a Dual Primary Listing effective 3 October.
• Though the timing is tricky, this could result in the stock not being deleted from the Hang Seng China Enterprises Index (HSCEI INDEX) at the December rebalance.
• This could also lead to inflows at the December rebalance from Hang Seng China Enterprises Index (HSCEI INDEX) and Hang Seng Tech Index (HSTECH INDEX) trackers.

• Onewo (2602 HK) (OST) raised around US$733m in its Hong Kong IPO. OST is a property management service provider primarily owned by China Vanke Co Ltd (H) (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 talk about the demand for the deal and other trading dynamics.

• Leapmotor (9863 HK) priced its H Share at HK$48.00 per share to raise net proceeds of HK$6,057.4 million (US$772 million). The H Share will start trading tomorrow.
• The H Shares of peers posted no first-day gains and are currently below the listing prices. Market sentiment on peers has remained weak since the release of the prospectus.
• Leapmotor, at best, should trade in line with median peer multiples. Leapmotor is fairly valued at the IPO price. We continue to remain on the sidelines.

• Onewo (2602 HK) priced its H Share at HK$49.35 per share to raise net proceeds of HK$5.6 billion (US$713 million). The H Share will start trading tomorrow.
• Notwithstanding the industry headwinds, the H Shares of peers with financially sound parentco backgrounds are trading above the listing prices.
• Despite peer multiple derating, the IPO price remains attractive compared to peers with financially sound parentco backgrounds. 

• Leapmotor (9863 HK) has priced its IPO at HK$48 per share, at the lower end of the indicative IPO price range of HK$48-62 per share. 
• At the above price, the company raised net proceeds of approx. HK$6,057.4m at a market capitalisation of HK$54.9bn and a post-money EV of HK$45.9bn.
• The HK offering was undersubscribed while the international offering was initially oversubscribed by 2.33x and the unsubscribed portion of the HK offering was later reallocated to international offering.

• Low valuation against peers in China albeit China Datang Corp Renewable Power (1798 HK) is one of the few pure-play wind farm operators in HK. 
• Its free cash flow reached its highest in more than 10 years. 
• The challenging equity market makes China Datang Renewable Power looks even more attractive.

• The monkeys have become Joinn Laboratories (H) (6127 HK)’s important profit growth point based on the logic chain of “monkey supply shortage – monkey price rise – Joinn’s performance increase”. 
• Faced with doubts about the future prosperity of CXO, we don’t think Joinn is immune as a part of this industrial chain. Joinn is hard to achieve the V-shaped rebound.
• Valuations are hard to increase by when the industry is very mature.For investment logic, my favorite is the industry beta, followed by industry beta+alpha. The last is low P/E ratio.

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.

• AAC Technologies Holdings
• CIFI Holdings

• Multiple new agencies have been reporting that Tencent (700 HK) plans to trim its investment portfolio over the remainder of the year. 
• The reports have been coming in since the second half of the year and the company has been duly denying these rumors.
• In this note, we look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how.

• PRC-Incorporated property management play Jinke Smart Services (9666 HK) has announced a voluntary cash offer at HK$12/share, a 33.04% premium to last close.
• The Offeror (Boyu) and concert parties collectively hold more than 50%. The Offer is contingent on regulatory approvals and 7.71% of shares out tendering. The tendering condition can be waived.
• The Offer appears geared to bring Boyu’s stake in line with Jinke Property Group (000656 CH)‘s. 

• The Swire buyback has been impressive. In 27 trading days they have bought back 26.8% of teh HK$4bn promised. In that period, participation has been aggressive.
• Swire has bought back As at a pace of 52% of pre-buyback one-year ADV. For Bs, it has been 105%. But Bs have dramatically underperformed As on “HK Re-opening” trades.
• Historically, when B/A gets more than 6% from 3mo Avg VWAP Ratio, there is statistically significant reversion. We are now at 6.8%. I’d buy B vs A.

• Jinke Smart Services (9666 HK) announced a voluntary conditional general offer from Boyu Capital at HK$12.00 per share, a 33.0% premium to the undisturbed price.
• The offer is conditional on 7.71% valid acceptances (such that Boyu represents 30.40% of outstanding shares) and anti-trust approval. The conditions can be waived.  
• The offer is designed to flush out minorities unwilling to wait for the industry headwinds to dissipate. A low threshold suggests that the offer will be declared unconditional.

• Tencent known to outspend its peers on strategic investments, has made only around 80 investments and acquisitions so far this year compared to more than 200 deals done in 2021.
• Tencent’s vast investment portfolio has attracted regulatory scrutiny and it’s the market’s belief that Tencent was asked to divest some of its stake in other leading tech players in China.
• However, over the last few months, Tencent has been increasingly investing on companies operating in the medical field.

• Following a contraction in Chinese apparel sales since 3Q21, and similar negative GMV and product revenue growth for Vipshop, we have witnessed a recovery to growth since June.
• Current sell-side forecasts are, however, still for a -10.8%y/y contraction in product revenue for Vipshop in 3Q22f, followed by a -4.4% contraction in 4Q22f which seems overly pessimistic.
• Given the conservative nature of near-term top-line growth expectation, and management guidance, the probability for positive earnings surprise seems high.

• Poly Real Estate Group Co., Ltd (600048 CH) sits at the edge of the inclusion zone for the FTSE China A50 Index (XIN9I INDEX) December rebalance.
• That inclusion could result in the deletion of any one of four stocks since they are all clustered within 0.7% of each other on full market cap.
• There are a few other stocks that are close to inclusion zone and a 5-10% rally in these stocks could result in more changes to the index in December.

• The improvement of Medlive’s profitability in 22H1 seems more related to the large decreased income tax expense rather than any obvious improvement of main business or any other logic.
• The single main business structure and insufficient core competitiveness add uncertainty to the Company’s long-term prospects, which makes it difficult to significantly improve the valuation.
• Medlive is under double pressure of “squeezing bubble” in healthcare industry and “the fading of traffic dividend” in Internet industry.Its growth logic/business model will be more scrutinized by the market.

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.

• Road King Infrastructure

• In early Feb2020, the #1 shareholder of HK-based elderly home care provider Pine Care Group (1989 HK) sold a 52% stake at HK$1.647, keeping 14.99%. That triggered an Unconditional MGO. 
• In Aug2022, much of the shareholder consortium which bought in 2020 agreed to sell 56.15% at HK$0.89/share to local privately-held developer Chinachem. That will trigger another Unconditional MGO.
• The business has suffered under covid, but it is not clear why the business would be better now. Revenues will spike when Causeway Bay opens, but…. Sell. 

• We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand and Chinese ADRs.
• Highest spreads – Shandong Fengxiang (9977 HK), Alliance Aviation Services (AQZ AU), Infomedia Ltd (IFM AU), Ramsay Health Care (RHC AU), 21Vianet Group (VNET US), 111 Inc (YI US).
• Lowest spreads – OZ Minerals Ltd (OZL AU), Nitro Software Ltd (NTO AU), Tyro Payments (TYR AU), MACA Ltd (MLD AU), Link Net (LINK IJ), Dongzheng Automotive Finance (2718 HK).

• In line with previously reported trends in Chinese retail sales growth, the large Chinese eCommerce operators reported a decline (or contraction) in GMV growth in 2Q2022.
• Following a contraction between March and May this year, China’s retail sales growth has returned to growth since June, which continued in July and accelerated in August.
• Alibaba’s next reported quarter’s annualised growth will be on an extremely depressed base.

• Onewo (2602 HK) is looking to raise between US$700m-US$784m by selling 116.714m shares at a price range of HK$47.1-52.7/share. Indications are that the IPO will be priced close to mid-point.
• Given the domestic shares and unlisted foreign shares will not be converted to H-shares, there is no chance of MSCI inclusion and a small chance of FTSE inclusion.
• Onewo (2602 HK) is also unlikely to be added to the HSCI and consequently will not be added to Stock Connect.

• Growatt Technology (1833969D CH), a leading PV inverters manufacturer, will seek a listing hearing for a US$1 billion HKEx IPO in October, according to press reports.
• In Growatt Technology IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case. 
• The key elements of the bear case rest on rising customer concentration risk, high dependence on Brazil for growth, limited pricing power and a shift to FCF burn. 

• Revenues of major express parcel companies grew rapidly in August.
• JD logistics will provide logistics service to live streaming retailers on Douyin.
• In 2Q22, revenue of Trip.com decreased by 32% YoY and operating profit turned negative.

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.

• Tata Steel Thailand
• Times China

• Xinjiang Goldwind Science & Technology H (2208 HK) had a tough 2Q22; but with the recent retreat in share price, the stock appears attractive now at 8.5x FY23F PER.  
• Goldwind has many growth initiatives backing its outlook. These include solid order backlog, upside on gross margin, contribution from wind farms and growth from the servicing business.
• Its WTG backlog of 24.1GW is 1.3x higher QoQ and well covers revenue for next two years. Further strategic disposals of wind farm will help realising underlying asset values.  

• Leapmotor (9863 HK) is looking to raise between US$800m-US$1.03bn by selling 130.82m shares at a price range of HK$48-62/share. Between 30-39% of the shares will be taken by cornerstone investors.
• The continued slide in its closest peers could put pressure on the stock post listing, though there could be some passive buying in December.
• Leapmotor (9863 HK) could be added to the HSCI and Hang Seng Tech Index (HSTECH INDEX) in December. Stock Connect could come online in December too.

• CALB aims to raise up to US$1.7bn in its Hong Kong IPO.
• CALB undertakes design, R&D, production and sales of EV batteries and Energy Storage Systems (ESS) products.
• In this note, we will run the deal through our ECM framework and talk about IPO pricing.

• Hong Kong’s leading property developer, Chinachem Group agreed to acquire a 56.15% stake in Pine Care Group (1989 HK) for HKD451.2 million ($57.5 million) from its controlling shareholders.
• Post-Acquisition, Chinachem will launch an unconditional mandatory offer for the remaining shares, which it does not hold at HKD0.89 per share, same as the purchase price.
• Considering delisting risk, limited upside potential of the shares after a huge run-up, and muted growth outlook of the company, investors should tender their holdings.  

• Jenscare is a China-based medical device company with a focus on structural heart disease. The company launched a deal to  raise up to USD 30m via a Hong Kong listing.
• In our previous note, we looked at the company’s product lines and provided a brief overview on the company’s valuation.
• In this note, we provide an update for the book building. We provide our quick thoughts on the valuation and deal dynamics.

• CALB (3931 HK) is getting ready to complete its IPO in early October in Hong Kong. The IPO price range is between HK$38 and HK$51 per share.
• Based on our valuation sensitivity analysis, our base case valuation of CALB is HK$53 per share, which is 20% higher than the mid-point of the IPO price range.
• CALB has a rare combination of surging sales growth rate, operating profitability, and increasing market share in the EV battery market globally.

• Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
• Overall, net outflow over the past week was ~US$1.4bn, split between Shanghai (-US$0.8bn) and Shenzhen (-US$0.6bn).
• The largest inflows were into Tianqi Lithium (002466 CH) and Midea Group (000333 CH). The largest outflows were in East Money Information (300059 CH) and Kweichow Moutai (600519 CH).

• Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
• Overall, the net inflow over the past week was ~US$1.1bn, split (+US$0.8bn) for Shanghai and (+US$0.3bn) for Shenzhen.
• The largest inflows were into Wuxi Biologics (2269 HK) and Tencent (700 HK). The largest outflows were in Geely Auto (175 HK) and HKEX (388 HK).

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

• Lepu Scientech Medical Technology (Shanghai) (LSM HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by CICC. 
• Lepu Scientech Medical Technology (LSMT) is an interventional medical device provider in China for congential heart disease (CHD).
• It is the largest manufacturer of CHD occluder products and related procedural accessories in China, according to Frost & Sullivan.

• The controlling shareholders of Shandong Fengxiang Co Ltd-H (9977 HK),  a company engaged in chicken breeding, slaughtering, and processing, are unable to meet their debts.
• As such, these shareholders who hold 70.92% of shares out in Fengxiang, via domestic shares, have been forced into a judicial auction, the completion of which may trigger an MGO. 
• Taking pointers from Dongzheng Automotive Finance (2718 HK)‘s recent auction means we back out a possible payment around late December – on the assumption an unconditional MGO is triggered.

• Angelalign Technology (6699 HK) has reported muted H1 2022 results, which were negatively impacted by the resurgence of the COVID-19 pandemic in China and the corresponding restrictions.
• Revenue from core business of clear aligner treatment grew just 3% y/y. However, lower ASP and higher cost of sales, pulled down the gross profit margin by 930bps to 60.2%.
• Thus far in H2 2022, China has imposed lockdowns in multiple major cities. With the uncertainty over the duration of COVID, no immediate respite is seen in Angelalign’s business.

• Our base valuation of Leapmotor HKD 34.9 per share, which is 27% lower than the low end of the IPO price range of HKD 48 per share. 
• Given the steep downside of our target price (6-12 month period) relative to the IPO price range, we are Negative on  the Leapmotor IPO.
• Leapmotor is selling 130.82 million shares in the IPO at a price range of HKD 48 to HKD 62 per share, scaling back the size of the IPO considerably. 

• This is our first report on SKYX Platforms and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
• Another important fact about SKYX Platforms is that the company’s management comprises several former GE and NEC employees which is a big positive.
• We believe that there is a good chance the company’s offerings may become universally accepted in the years to come.

We view Central China Real Estate (CCRE) as “High Risk” on the LARA scale. The company’s operations are geographically concentrated in Henan, China’s third-most populous province. While this exposes CCRE to policy and political changes within the province, we believe the risks are partly mitigated by the company’s deep market knowledge, brand recognition, as well as longstanding relationships with the local government and construction companies. Our view also considers the deteriorated operating and financing environment across the Chinese property industry, which has adversely impacted CCRE and other private developers.

Our fundamental Credit Bias on CCRE is “Negative”, given the company’s weak sales, very low margins, poor liquidity and lack of access to capital market financing amid the industry turmoil. Moreover, CCRE has material non-debt liabilities. Going forward, the company’s debt repayment prospects may hinge on the development of synergies with its SOE minority investor (Henan Railway) to achieve new business and financing opportunities.

Controversies for CCRE are “Immaterial”, despite reputational risk on account of worker fatalities. This was mainly reported in the media in 2019 and 2020, with such statistics not provided in the company’s ESG reports. The ESG Impact on Credit is “Neutral”. We note positively that CCRE’s corporate governance has improved, supported by increased transparency and its willingness to honour debt obligations.

• This is our first report on Jupiter Wellness and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
• With all of these developments, a stock priced at 63 cents appears to be highly affordable and supports our positive outlook.
• Overall, we believe that Jupiter has phenomenal growth prospects and is an excellent investment prospect.

• Due to declining performance, lack of core competitiveness and increasing competition, the market has to re-examine the growth potential and outlook of Angelalign.The era of high margin is fading away.
• Angelalign’s low-price strategy is easily hit by similar products with lower prices. Once its price loses advantage, it will directly lead to a rapid and substantial decline in overall performance.
• Due to its worse-than-expected 2022H1 performance and economic downturn, we lowered our 2022 forecast of Angelalign. Angelalign shouldn’t be valued that much higher than Align Technology, expecting more downside ahead. 

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.

• CIFI Holdings

• Despite record losses in 2Q22, share price of Air China Ltd (H) (753 HK) has rallied 14% YTD, outperformed the 23.9% decline in HSCEI and its Chinese peers. 
• Air China’s stub value has returned to pre-pandemic level, but is primarily driven by the A-share. Cathay Pacific (293 HK) recovery is an important catalyst for narrowing H-A share discount.
• News flow over the next 12 months, mostly related to further relaxation of quarantine requirements, will be positive. The surge in demand should support elevated passenger yield.  

• This is our first report on Bruush Oral Care and we look to provide a detailed account of the drivers that will propel the stock in the near future.
• Bruush got listed recently and its stock price has been volatile but has maintained a more or less sideways trajectory in this short period of time.
• Overall, we believe that Bruush Oral Care has phenomenal growth prospects and is an excellent investment prospect.

• Leapmotor (LM) aims to raise around US$1.0bn in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
• As of end Jun 22, it had delivered a total of 104,829 cars with most of its sales coming from its mini units, T03.
• In this note, we will run the deal through our ECM framework and talk about valuations.

• Leapmotor (2007699D HK) has launched its HKEx listing at HK$48.00-62.00 per share to raise up to US$1.0 billion. Books are open from 20 to 23 September.
• We previously discussed the IPO in Leapmotor IPO: The Bull Case, Leapmotor IPO: The Bear Case, Leapmotor IPO: Look Before You Leap, Leapmotor IPO: Valuation First-Look. 
• Leapmotor, at best, should trade in line with median peer multiples. Leapmotor is fairly valued at the low end of the IPO price range. We pass on the IPO.

• Leapmotor (2007699D HK) is a leading smart EV company in China that designs and builds EVs. The company develops key hardware, software and all electronic components of the vehicles internally.
• The company has filed for an IPO on the HKEx and plans to raise about US$1bn through the IPO.
• In this insight, we analyse the company’s financials to understand the key reason behind the absence of gross profit margins compared to other players in the market.

• On 16 September, the administrator published the details for the auction of Shandong Fengxiang Co Ltd-H (9977 HK) controlling shareholder’s 70.92% stake in Alibaba Judicial Auction. 
• If the auction is successful and results in any person and a group of persons acting in concert holding 30%+ of the voting rights, it will result in an MGO.
• The base bid implies an MGO price of HK$1.563 per H Share, a 103.0% premium to the last close. The auction will be held from 10 October to 11 October.

• Onewo Space-Tech (ONEWO HK) has provided its IPO price range of HK$47.1 to HK$52.7 a piece in the IPO offering of 116.74 million shares, representing 10% of its outstanding shares.
• Our base case valuation of Onewo Spacetech is HKD27.7 per share, which represents 41% lower than the low end of the IPO price of HKD47.1 per share. 
• Our valuation analysis suggests a range of HKD25 per share to HKD33.5 per share. We would AVOID this deal due to the much lower target price relative to IPO price.

• CALB (CALBLZ CH), a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.
• We previously discussed the IPO in CALB IPO: The Bull Case, CALB IPO: The Bear Case and CALB IPO: Updates Support the Bull Case.
• In this note, we present our forecasts and take the first look at CALB’s potential valuation range. 

• TME’s shares are due to start trading on HKEx tomorrow once it carries out a secondary listing by introduction. The company neither issues new shares nor raise any proceeds.
• The company’s earnings growth has started decelerating with having to end exclusive music licensing agreements with WMG, UMG and Sony Music a year ago as part of a SAMR probe.
• TME’s 2Q2022 results show recovery in its earnings, however, we would recommend waiting until regulatory crackdown on tech platforms eases off.

• For RC18, it depends on whether RemeGen can seize this short period of strategic opportunities to further establish its leading position. The situation faced by RC48 is much more complex.
• From the current situation, it’s very challenging for RemeGen to evolve into biopharma.That is to say, RemeGen’s future positioning is still likely to remain a biotech, which limits valuation expansion.
• Even based on conservative forecast, there’s still decent upside potential. We’re bullish on RemeGen. Due to unfriendly macro, investors may need to consider the potential downside risks when going long.

• This is our first report on cloud-based solutions provider, GoDaddy.
• The company is one of the largest players in the domains, hosting and other related cloud-based solutions space across the globe.
• This quarter, the company launched its beta WooSaas solution, allowing it to reach larger customers.

• Jenscare, a China based structural heart disease focused medical device company, plans to raise up to USD 30m via a Hong Kong listing.
• In our previous insight, we discussed that there have been many TAVR companies listed in Hong Kong but we think Jenscare has a differentiated portfolio.
• In this note, we will look at updates in its latest filing and highlight massive delays in its product candidates. We also provide a quick thought on its valuation.