China Archives | Page 130 of 199 | Smartkarma

• China ADRs were sharply lower last week as the SEC started to name companies that were identified under the Holding Foreign Companies Accountable Act (HFCAA).
• Then DiDi Global dropped 44% on Friday following reports that the their proposals to prevent data/security leaks did not meet CAC’s requirements and work on the HK listing was halted.
• With 2024 not too far away, a lot of the U.S. listed companies will look at listing in Hong Kong in the near future. That will have its own implications.

• Entering 2022, Hengrui’s stock price has gone through continuous correction. The market is not that optimistic about the performance of Hengrui in 2021 full year and 2021Q4.
• We analyzed the possible future development trajectory of Hengrui’s performance, which would be up and down due to VBP and NRDL negotiation. Investors could get prepared in advance.
• Due to Hengrui’s  “DNA”  and development mode, it could have “stable growth” after getting out of the difficult situation, but hard to achieve “explosive growth or significant return”.

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.

• Silergy foresees the demand will be larger than capacity in 2022. Silergy expects Auto, Sever Mother-board, SSD and others should be showing a strong demand in 2022.
• The shipment lead-time is controlled around 5~6 months, which indicated that the demand is strong for 2022~23.
• The generation 3rd will be optimized until 2026. Silergy will need some new suppliers for generation 4th in 2023. In 2026, generation 3rd & 4th will dominate Silergy’s revenue. 

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• As SBI Sumishin Net Bank (7163 JP) called off its listing, Government of India is still vacillating on Life Insurance Corp of India (LIC) (1248Z IN). 
• Placement scene remains quiet with Cosmo Energy Holdings (5021 JP) deeply discounted block following up on ZIP Holdings (ZHL AU) deeply discounted block the previous week.

• On 8th Mar 2022, Securities Exchange Commission (SEC) added five China ADR names to its provisional list of issuers under the Holding Foreign Companies Accountable Act (HFCAA).
• There is nothing new about the list, on 2nd Dec 2021, SEC had issued final amendments to implement the HFCAA which had already spoken about the list and its implications.
• In this note, we’ll talk about the latest developments its possible timelines and implications.

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.

Yuexiu Property​ (YXP) has released satisfactory FY 2021 results, given the weakness in the industry. Leverage edged up slightly, due to the issuance of new bonds in FY 2021. That said, the company continues to have access to external funding, thanks to its SOE status. In addition, a high proportion of its cash balance is freely available, with only 24% restricted under escrow accounts. We believe YXP has adequate liquidity and manageable refinancing risk.

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. Fosun International
2. Times China
3. Kwg Property Holding
4. Logan Property Holdings
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. Fosun International
2. Times China
3. Kwg Property Holding
4. Logan Property Holdings
5. Central China Real Estate

and more…

• Revenue grew rapidly by 23% in 4Q21 and we believe revenue will grow by 18% in 2022.
• We are not concerned about the zero net margin, because operating cash flows were still strong in 2021.
• We believe the stock has a price target of US$73, which is 18% over last closing price.

• There could be 3 or 5 changes to the STAR50 INDEX in June depending on the minimum listing history (6 months or 12 months) used by the index committee.
• Jinko Solar (688223 CH) is a high probability inclusion while Shanghai Microport Endovascular MedTech (688016 CH), ArcSoft Corp Ltd (688088 CH) and DBAPP Security Ltd (688023) are high probability deletions.
• The March rebalance will be implemented at the close tomorrow. The adds have outperformed the deletes post announcement and there could be a reversal from next week.

• Norges Bank excludes Li Ning (2331 HK) from its list due to poor labor practices/human rights issues.
• Today’s share price could be a telltale sign of the near-term prospect, down when the majority are up. 
• Will the other international shareholders follow suit on dumping the shares because of the human rights abuse? Potentially yes. 

• Green Tea Group (GT HK) received the Hong Kong Stock Exchange approval to launch its IPO on 7th March 2022, almost a year after filing its first application.
• The company expects to raise around US$100-200m via an IPO jointly sponsored by Citi and CMB International.
• Growth prospects look decent with plans to open 75-100 new restaurants each year. However, We aren’t excited about the IPO as the Company’s business model seems significantly weaker than peers.

• Arrail, the largest dental services provider in China’s premium dental service market has announced the terms for its IPO.
• The company plans to raise net proceeds of approx. HK$590m (US$75.9m) through issuing 46.5m at a price of HK$14.62 per share.
• Cornerstone investors have agreed to purchase approx. US$65m worth of shares and these investors include Abax, Harvest, Hudson Bay, OrbiMed and TVHKL.

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.

• Fosun International
• Times China
• Yuzhou Group

• NIO Inc (9866 HK) is expected to list on the HKEX (388 HK) tomorrow. Nearly 820m Class A shares are now held on the Hong Kong Share Register.
• We do not expect NIO Inc (9866 HK) to get Fast Entry to the HSCEI INDEX and HSTECH INDEX, though inclusion in the HSTECH could take place in June.
• NIO Inc (9866 HK) is not likely to get Fast Entry to the HSCI. The stock is not eligible for Southbound Stock Connect as a Secondary Listing.

• Great Wall Motor (2333 HK) could replace Hansoh Pharmaceutical (3692 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the June rebalance. The review period ends 31 March.
• Bilibili (9626 HK) is a close add while Sunac China Holdings (1918 HK) is a close delete. Stock prices moves over the next 3 weeks will decide on the changes.
• Passive HSCEI Index trackers will need to buy 1.74 days of ADV on Great Wall Motor (2333 HK) and sell over 3 days of ADV on Hansoh Pharmaceutical (3692 HK).

• Arrail is a leading premium dental service provider in China. The company launched book building to raise up to USD 87m via a Hong Kong listing.
• In our previous notes, we looked at the company’s background, its operation, its financials, and its expansion plan, and compared its key metrics with peers and provide thoughts on valuation.
• In this note, we provide a quick update for the book building.

• A Chinese metal giant is scrambling to manage massive losses from shorting nickel futures after the metal went on an unprecedented rally.
• Tsingshan Holding Group Ltd., one of the world’s biggest nickel and stainless steel producers, came under mounting pressure to meet margin calls for its short position
• The price of the metal, used in stainless steel and electric-vehicle batteries, surged as much as 250% in two days

• Jinmao Property Services (816 HK) raised around US$105m in its Hong Kong IPO. 
• In our view, the firm doesn’t deserve to trade at a premium to peers given its weaker margins and slower growth in FY20. 
• In this note, we will look at the trading dynamics and current valuation.

• Arrail is the largest dental services provider in China’s premium private dental service market and the third in the overall market in terms of total revenues in 2020.
• The company has filed for an IPO to list on the Hong Kong Stock Exchange and plans to raise about US$86m.
• The group has experienced strong growth despite the impact of COVID-19 and China’s growing private dental market offers large potential for the company to grow.

• Bilibili Inc (BILI US) reported 4Q2021 results last week where revenues increased 50.6% YoY to RMB 5.8bn while operating losses increased to RMB 2bn compared to RMB 903m in 4Q2020.
• This marks the lowest YoY growth in top line since 2Q2019. Though all segments experienced YoY growth in revenue, we have observed that the growth is slowing down.
• The company also has announced a share buyback of up to US$500m of its ADS over the next 24 months

• For ENT services, the number of patients and scale of ENT field are relatively stable, with growth ceiling.
• Due to the limited doctor resources in Singapore and the intensified multi-party competition faced by Ascent, there may not be exciting future growth potential.
• So, we are conservative about the Company’s outlook if it just operates the business within Singapore or without diversifying its business effectively.

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 SCE
• KWG Living Group

• Sold off in the market rout as it is a small-cap stock although growth potential is intact. 
• Margin decreased but revenue increased followed by lower expenses to sales ratio. 
• China High Speed Transmission Equip Grp (658 HK) build-up in inventories and increase in the account receivables reflect management’s confidence and action to prepare for a higher revenue growth.

• Arrail is a leading dental service provider in China. The company is looking to raise up to USD100m via a Hong Kong listing.
• In our previous note, we looked at the company’s background, its operation, its financials, and its expansion plan.
• In this note, we compare the key metric with its peer and provide our thoughts on the valuation.

• Weibo Corp (WB US) reported a set of solid results for 4Q21; ad revenue (excluding Alibaba) has post robust 28% year-over-year growth and MAU remains healthy.
• Weibo is leveraging its competences to increase user engagement. Weibo video account has amassed 25mn users; Weibo Live’s DAU has grown 100% year-over-year.
• Weibo current valuation 10x forward P/E looks attractive; we expect 1Q22 user engagement will improve given that topics on Winter Olympics has already exceeded Toyko Olympics.

• The Composite Document detailing the Conditional Voluntary General Offer for liquid chemical storage and handling outfit Dragon Crown Group (935 HK) (DCG) is now out.
• The Offer Price is HK$1.28/share. The Offer is conditional on 90% acceptance, with 86.91% in the bag.
• This will probably turn unconditional next week. Trading tight to term. 

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.

• Powerlong Commercial Management Holdings

• Provident Acquisition Corp. (PAQC) & Perfect Corp. (Valuation: $1.02B EV)
• FTAC Athena Acquisition (FTAA) and Pico’s business combination agreement was terminated
• Caravelle, “a global carbon-neutral ocean-going technology company”, has signed a letter of intent with Pacifico Acquisition Corp. (PAFO) on 12/31, apparently

• Beijing Enterprises Clean Energy Grp (1250 HK) and China Shandong Hi-Speed Financial Group (412 HK)/CSFG have simultaneously entered trading halts today. CSFG is likely a suitor for BE Clean Energy.
• There is a track record of SOE privatisations of clean energy companies – Huadian Fuxin Energy Corp (816 HK),  Huaneng Renewables Corp H (958 HK) and CP Clean Energy
• In this note, we look at CSFG’s recent failed attempt at acquiring a 22.78% stake at a price of HK$0.088, along with BE Clean Energy’s trading updates and peer multiples.   

• After raising over RMB70 billion,investors have much higher expectation on BeiGene than other biotech/biopharma, because BeiGene is “different”,but the real pressure will come over the next two or three years.
• Will BeiGene become China’s first truly international pharmaceutical company, or be dragged into mediocrity by the failure of key trials or the failure of commercialization to meet the market’s expectations?
• It is attractive if the market value is below US$20 billion. However, considering the Russia-Ukraine war and other potential external uncertainties, we advise investors to keep alert.

• We have guided bullish on Melco Resorts & Entertainment as an early bet on the improving conditions for its Philippines Entertainment Zone property and other group catalysts.
• GGR in Entertainment City Zone rose 20% in 2021 to US$1.35b–pandemic easing.
• Total industry Philippine GGR  for 2021 was up 14.5%  to $2.2b despite a decline in government run Pagcor casinos which had more widespread lockdowns.

• SITC International (1308 HK) achieved a record net profit which surged 2.3x in FY21, but our concern is that much of news has been well in the share price.
• While management is optimistic on its outlook, we think challenges are higher costs (port, bunker and charterhire) and little room for further significant freight rate increase. 
• Its 6.7x P/B for FY22F has well reflected its quality but with ROE likely to dip back in FY22 and FY23, we think upside does not look impressive.

• The 1st quarter is relatively a lower season. Therefore, we expect that the revenue/NM is about RMB$8. 7bn/9.0% in 1Q22 respectively, which declines ~10% QoQ and grow 30% YoY. 
• To our understanding, QCOM is still the biggest client in JCET. The rest of clients have changing a bit in JCET since Huawei was being driven out.
• Overall speaking, China is devoted in developing OSAT (Outsource Semiconductor Assembly and Packaging) business, and the gap shall be close to ASEH and Amkor. 

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.

• Central China Securities
• Hopson Development
• Sino-Ocean Service
• Yuzhou Group

• 52.7%. The only number that matters. That satisfied the acceptance condition to the mandatory conditional cash Offer. But it was a close-run thing.
• The Offer is now unconditional and will remain open for acceptance until the 17 March. 
• Yili has no intention to privatise Ausnutria Dairy Corp (1717 HK) and intends to maintain its listing following the close of the Offer.

• Aluminum is Minth Group Ltd (425 HK) biggest raw material.
• The war that spiked the commodity price does not show any sign of ending soon therefore margin contraction is expected. 
• Get out or short it if you are a hedgehog. 

• IQIYI Inc (IQ US) reported 4Q and full-year 2021 results on Tuesday. Revenue for the quarter declined 0.9% YoY to RMB7.39bn (vs consensus RMB7.31bn).
• Operating losses for the quarter was RMB975.2m (vs consensus RMB1.33bn), about 13.2% of revenues compared to RMB1.31bn (17.5% of revenues) in 4Q2020.
• IQiyi’s ADRs jumped 21.5% at the end of Tuesday’s close as the company mentioned that it expects quarterly non-GAAP operating break-even as soon as possible.

• Tencent is commencing a fresh down leg below 413 support. We have been bearish/short from the 500 handle with a projection of 370.
• Tencent’s breakdown is lagging the HK tech index  which raises conviction for Tencent weakness/follow through to the downside.
• 320 macro support attracts in Q3 as long as we stay below 413.

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. Logan Property Holdings
2. Shimao Property Holdings
3. Ronshine China Holdings
4. Lenovo
5. Seazen (Formerly Future Land)

and more…

• There are three sets of changes for the FTSE China A50 index at the March rebalance with implementation on 18 March. Two changes were expected while one is a surprise.
• The March rebalance will also see the Foreign Ownership Limits applied to the stocks. Estimated one-way index turnover is 17.39% and will result in a one-way trade of CNY 9,360m.
• As the surprises, we’d keep an eye on China State Construction A (601668 CH) and China Life Insurance (601628 CH) over the next few days.

• As expected, Nongfu Spring (9633), China Overseas Land & Investment (688) and XPeng (9868) will replace Geely Auto (175), China Tower (788) and JD Health (6618) in the index.
• The adds, deletes and capping changes will result in one-way turnover estimated at 9.14% and will result in a one-way trade of HK$4,576m.
• Shorts in Nongfu Spring (9633 HK), JD Health (6618 HK) and China Tower (788 HK) have over 10 days of ADV to cover.

• Back on the 12 January this year, 51 Job Inc (JOBS US) announced the Offeror had proposed reducing the merger consideration from US$79.05 in cash per common share to US$57.25.
• Yesterday 51job said it has entered into a revised merger agreement at US$61.00/share, a 6.55% bump in terms, but still 22.8% down the initial terms. 
• Presumably, the amended proposal still requires no PRC regulatory filing. This transaction appears to be done this time, with completion in the 2Q22.

• The consortium has improved the offer price by 6.6% to $61.00 in cash per ADS. The consortium represents 54.9% of the voting rights.
• The Board intends to recommend shareholders vote in favour of the transaction. The transaction is expected to close during the first half of 2022.
• The combination of the improved offer price and the tech shares sell-off improves the chance of meeting the two-thirds shareholder approval threshold. At last close, the gross spread is 7.0%. 

• We analyzed Suzhou Zelgen Biopharmaceuticals (688266 CH)’s key products(Donafenib, recombinant human thrombin for topical use, Alkotinib, Jaktinib, etc.). They have to face fierce competition, VBP impact and small market size.
• Through Gensun Biopharma, Zelgen has established the ability to develop advanced tumor immunotherapy drugs. Whether it can continue to launch new products is the key to test Zelgen’s R&D system.
• We are cautious about Zelgen because uncertainties led to inaccurate prediction on market size and outlook.Investors can choose to “catch” a rebound, but Zelgen is far from a complete reversal.

• Geek+ is a smart logistics and warehousing robotics developer serving clientele from a number of industry verticals, including, apparel, e-commerce, retail, 3PL, pharmaceutical, manufacturing and automotive (think Amazon Kiva).
• In the latest Series C funding round, the company raised a total of US$200m with the most recent Series C2 round in Jun 2020, raising around US$50m. 
• In the CY2H21, there were news reports regarding an IPO that could raise US$500m. Geek+ was considering either going public in the US or in Shanghai’s Nasdaq-style STAR board.

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.

• Country Garden Holdings Co
• Lenovo
• Vedanta Resources

• The March rebalance of the HSI, HSCEI and HSTECH indices will use today’s closing prices to cap the index constituents at 8%. This will lead to large flows.
• The largest inflows will be on Alibaba Group (9988 HK), JD.com Inc. (9618 HK), Meituan (3690 HK), Nongfu Spring (9633 HK), Li Auto (2015 HK) and Lenovo (992 HK). 
• The largest outflows will be on HSBC Holdings (5 HK), Kuaishou Technology (1024 HK), China Construction Bank H (939 HK) and Tongcheng-Elong Holdings Ltd (780 HK).

• Debt-ridden China Evergrande Group has announced it will sell stakes in four unfinished real estate projects to two state-owned trust firms
• The move shows the lengths Evergrande is willing to go to comply with government directives for developers to complete projects they have already started
• Two Evergrande subsidiaries are selling their 10% and 9.87% stakes in two projects in the cities of Chongqing and Dongguan

• Horizon Robotics is an artificial intelligence chips developer for automobiles, specifically smart vehicles, and robots. 
• Its latest Series C funding round in late 2020-early 2021, raised a combined total of US$900m, led by Great Wall Motors, Hillhouse, Baillie Gifford, CATL, CPE, Yunfeng Capital and others.
• There were news reports doing the rounds that the firm had aimed to look at a potential US listing, in a deal that could raise up to US$1bn.

• New Horizon Health (6606 HK) has made some improvements based on 2021 preliminary financial data. The newly launched UU Tube also enriches the product line. 
• However, the industry is still at the early stage. In front of fierce competition, ColoClear’s bottleneck is obvious. The cheaper products (Pupu Tube, UU Tube) could have more market acceptance. 
• Based on our analysis, our view is that the Company may rebound temporarily, but it is too early for a complete reversal.

• HSI has been a top short in Asia and nearing our 22,200 tactical target to reduce short exposure. A50 represents the perform long to build as the bull wedge matures.
• HSI RSI nearing oversold level where a rally is expected. Intermediate cycle remains down to sell a rally attempt in March.
• A50 15k and 15,350 barriers to clear. Failing would require re setting near lower wedge support.

• Zero COVID policy calls for another lockdown in Hong Kong as the number of cases rises.
• A reduction in the number of services will help to cushion the blow but may not help the overall grim prospect of the firm. 
• Lower traffic is negative for MTR Corp (66 HK)transport revenue as well as the commercial business from the station which combined make up to 50% of total revenue.

• We believe revenue will grow by 23% YoY in 4Q21 and by 18% in 2022.
• We believe JD is the most promising direct-sales e-commerce company in China.
• However, short video apps have been taking advertising market share from e-commerce apps.

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.

• Indika Energy
• Jingrui Holdings
• Tata Motors ADR

SJM Holdings’ FY 2021 results remained weak, in a continuation from the soft H1 numbers. The company continued to report sizeable negative EBITDA in contrast to peers (which are all likely to report small positive EBITDA for the year). Moreover, operating cash burn has persisted in the two months YTD.

Liquidity is weak, given SJM’s low cash balance and lack of RCF availability. Moreover, the company would need to refinance its loans due February 2023. SJM’s delay in obtaining new long-term facilities is disappointing in our view, and reflects negatively on management’s execution. Still, we believe the company would not face issues seeking extensions or an eventual refinancing of its loan facilities, especially since the loans are secured against SJM’s assets.