China Archives | Page 73 of 199 | Smartkarma

• Weiqiao Textile Co (2698 HK) announced a pre-conditional privatisation offer from Weiqiao Chuangye at HK$3.50 per H Share, a 104.7% premium to the undisturbed price.
• The pre-condition of regulatory approvals from the NDRC, MOC and SAFE. The key condition is approval by at least 75% independent H Shareholders (<10% of all independent H Shareholders rejection). 
• The offer price is final. Despite the premium, the offer is struck materially below net cash. Nevertheless, the irrevocable from the largest H Shareholder should help the offer get up.

• The New and Better (17 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
• Hs with H/A pairs under-perform their As on average by 220+bp. Liquid HK H/A Pairs saw H/As -244bp. H/A Pair intracorrelation is up and A premia continue to trend better.
• SOUTHBOUND and NORTHBOUND were net buys overall but Hs had a VERY BAD WEEK vs their A-Shares where pairs were concerned.

• According to China state media reports, a record number of more than 3 million people attended China’s annual civil service exam last weekend, up from 2.6 million last year. 
• A civil servant job is viewed in China as highly stable.  In the current weak macro environment where youth unemployment is high, job security is increasingly vital.
• The company now trades at 18x forward earnings, with around 30% expected earnings growth. 

• After shares were suspended on the 27 November, Weiqiao Textile Co (2698 HK) has now announced a pre-conditional privatisation at HK$3.50 per H-share.
• This Offer, from its parent, is by way of a Merger by Absorption, which incorporates a Scheme-like vote. There is no tendering condition.
• The Offer Price is a premium to last close is a hefty 104.68%. and around a six-year high. This is done. 

• SOUTHBOUND flows the last several weeks clearly indicated a momentum move. The top net sells were all down. The top buys were all up. This week saw reversion.
• SOUTHBOUND saw net buys of HK$3.5bn this week, breaking a nascent sell streak. Meituan dip-buying Wednesday to Friday was worth the entire net buy.
• High-Div SOEs remain mixed. CNOOC (883) saw decent net buying, and China Mobile saw decent net selling. Again.

• Stock price starting to recognise the increase in  Chinese demand for Gold.
• Helped by a bottoming and a revival in Hong Kong retail sales and tourist arrivals.
• SPDR Gold Shares (GLD US) close to a new all time high

• PDD’s market cap has exceeded Alibaba’s due to PDD’s overseas performance and price sensitive consumers.
• Great Wall Motor plans to enter eight countries in Europe to bypass the investigation on Chinese export subsidies.
• ByteDance plans to close its game subsidy and, 2,000 employees may lose their jobs.

• Wuxi Biologics (2269 HK) has guided for weaker-than-expected revenue and lower profit in 2023, as the operating industry is facing near-term challenges due to biotech funding slowdown.
• $300 million lesser revenue in development business due to reduced number of projects and manufacturing revenue deficit of $100 million due to CMO deferral contributed to the miss.
• Following the announcement, Wuxi Biologics shares nosedived 24% on HK stock exchanges, marking its biggest one-day slide since listing in 2017.

• In this insight we review important e-comm logistics transactions from 2023
• We also provide a preview of potential e-comm logistics deals in 2024
• Interested readers can also find links to HKEX filings and our earlier insights

• REPT BATTERO Energy (REPT HK) is now looking to raise around US$300m in its upcoming Hong Kong IPO, down from the US$1bn it was aiming for earlier.
• REPT BATTERO Energy (REPT) is a lithium-ion battery manufacturer in China, focusing on R&D, production, and sales of EV/ESS lithium-ion battery products such as battery cells, modules and packs.
• We have looked at the company’s past performance in our previous note. In this note, we talk about its PHIP updates.

• Want Want (151 HK) and China Mengniu Dairy Co (2319 HK) are both fairly liquid names in the China consumer staples sector. 
• Both companies trade at virtually the same forward PE of 14x.  However, I expect Want Want’s near term sales growth to be lower than market expectations.  
• The upside risk for Want Want could be its overseas expansion efforts, as overseas sales now account for mid to high-single-digit of sales and grew high-teens yoy in FY1H24. 

• The high growth in 23H1 is unsustainable. 23H2 YoY revenue growth would be single-digit. Due to 23H1’s high base, we cannot rule out the possibility of negative growth in 24H1.
• In the case of lower-than-expected external M&A activities, Fu Shou Yuan has accumulated a large amount of cash, which would drag down ROE. So, current dividend policy still needs improvement. 
• Fu Shou Yuan’s expansion would be relatively moderate. Double-digit revenue growth can still be expected in the long term. The market value of above RMB15 billion is more reasonable. 

• H World Group (1179 HK) has been over-penalised by market weakness as its share price was off 16.8% YTD. It turned around in 3Q23 and guidance for 4Q23 is solid.
• Surge in operating and adjusted EBITDA margins indicated high operating leverage. Occupancy has not returned to 2019 level, but there will be more margin expansion when this happens.
• 55% of rooms in China are of economy type, and 82% are in tier-2 and below cities. Such characteristics allow it to benefit from the prevailing consumption downgrade. 

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 stock market despair has brought down  China Tourism Group Duty Free Corp Ltd (601888 CH) to its lowest forward valuation in the past ten years   
• Poised for long-term growth, Chinese are buying albeit more prudently, government supportive on promoting domestic consumption, efficiency enhancements will lower cost and boost margins 
• Using the company’s lowest recorded PE ratio in the past 10 years of 23.2x into FY24, we derive a target price of CNY106 (+21% UPSIDE)  

• Meituan reported C3Q23 top line (1.0%)/0.6% vs. our estimate/consensus, non-GAAP net income (9.7%)/8.3% vs our estimate/consensus. Subsidies and investment in in-store business is the main reason for bottom-line miss.
• Meituan in-store GTV increased 90% YoY in 3Q23, effectively counteracted Douyin’s attack and maintained size ratio at 3:1 vs. Douyin in-store, which scarified profit.
• Meituan OPM lowered 2.5ppt QoQ to 4.4% in 3Q23, and we expect it decline to 2.4% in 4Q23.

• Fufeng (546 HK)’s core businesses include food additives such as MSG, animal nutrition, high-end amino acids, and colloid such as xanthan gum. 
• Xantham gum is increasingly becoming popular as millions of people around the world purchase gluten free foods.
• Fufeng’s dividend yield averaged 7.5% annually from 2018 to 2022. Its current dividend yield is about 11-12%. Fufeng is trading at P/E of 2.9x and EV/EBITDA of 1.8x in 2024. 

• The national centralized procurement of high-value medical consumables for intraocular lens (IOL) and medical consumables related to sports medicine released results, with lower than expected price reductions. 
• Despite anti-corruption campaign, the business/profit model validation process of Chinese Biotech has not slowed down. There’s a chance to see Chinese Biotech turn losses into profits in 2024-2025.
• Zhejiang Orient Gene Biotech (688298 CH) once brought considerable returns to investors, but now the beautiful story is over.After deletion from CSI Medical Service Index, share price could remain weak.

• Bilibili reported  C3Q23 revenue, operating profit, and GAAP net income inline, 4.37%, (21.6%) vs. consensus. The miss was primarily due to ineffective investment in game studio and related costs.
• We are bearish on BILI’s game pipeline as ACGN is already a crowded market with well-entrenched competitors
• We maintain our SELL rating and cut the TP from US$ 12.3 to US$ 9.04, and consider that it is unlikely for them to breakeven in 2024

• 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. Or pledging. However, such disclosures are by no means an absolute.
• The key stocks mentioned in this regular insight are Sun Hung Kai Properties (16 HK) and Akeso Biopharma Inc (9926 HK).

• PDD reported C3Q23 top-line, non-GAAP EBIT, and GAAP net profit 9%, (4%) and in-line vs. our estimate, and 28%, 29%, and 42%, vs. consensus respectively.
• We estimate that Temu reached positive gross profit for the first time in 3Q, one quarter ahead of our prior estimate.
• We believe increased prices on its US platform was the main driver, while it was able to maintain supply prices.

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. Road King Infrastructure
2. Yanlord Land
3. Azure Power Global Ltd
4. Yankuang Energy Group
5. Tata Motors Ltd

and more…

• Weekly summary of vol changes and moves across Global Markets
• Analysing ATM volatility and skew changes over the last 5 days
• We suggest a few trades to take advantage of the implied vol surfaces

• Back on the 27 January 2023, Jardine Matheson (JM SP) entered an agreement with Shandong Xinjufeng (301296 CH) (XJF) to sell its 28.22% stake in GAPack (468 HK). 
• That sale completed in September.  Last week, XJF requisitioned an EGM to consider appointing five new (& friendly) directors, all-but taking control of the board. 
• CEO and founder Jeff Bi holds 9.65%. The question is: what are his options?

• The stock has been declining for about three years and plummeted after the 3Q23 results.
• However, we believe MT and its corporate clients have been recovering and MT’s profits will rise by 129% in 2024.
• We set an upside of 132% and a price target of HK$209 for 2024. Buy.

• Stock rally on strong revenue growth suggests TEMU will be at center stage of the investment thesis for PDD down the road. 
• Besides soaring GMV, TEMU achieved blowout performance likely due to much higher-than-expected take-rate and disciplined marketing, resulting in narrower-than-expected losses.
• We expect the company’s growth will even accelerate in 4Q23 and generate adjusted net profit of US$12 bn for FY24, with a target market cap of US$240 bn (20xPE).

• We think FUTU is stepping into a stagnant phase in 2024. Japan is not a game changer.
• Client asset inflow from overseas is not meaningful, and growth from mainland is frozen by regulation.
• We downgrade the stock into SELL rating and cut TP to US$46/ADS, mainly due to slow progress in overseas expansion and difficulty in monetization.

• Sunho Biologics, a China-based clinical-stage biotechnology company, plans to raise up to US$100m via a Hong Kong listing.
• In this note, we examine the company’s three core products, namely IAP0971, IAE0972, and IAH0968, which target malignancies.
• A large part of the company’s pipeline is testing the unproven targets. We also think the management and pre-IPO investors are of mediocre quality.

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.

• Azure Power Global Ltd
• Powerlong Commercial Management Holdings
• Road King Infrastructure
• Yanlord Land

• L’Occitane (973 HK) reported FY1H24 (fiscal year ending March 31) results yesterday after market, with net profit down 45% yoy. 
• The sharp drop in earnings is mainly due to a 48% yoy increase in marketing costs, as well as increased finance costs.
• The company maintained the FY24 outlook of 17% topline growth and an operating profit margin of 12% (FY1H24:  7.2%). 

• Dekon Food and Agriculture Group (DFAG CH) is looking to raise up to US$128m in its Hong Kong IPO.
• Dekon Food and Agriculture Group (DFAG) is a vertically integrated livestock farming enterprise in China.
• In this note, we will look at past performance, and share our thoughts on valuation.

• Perfect Medical Health (1830 HK) results showed 7% revenue growth and 10% YoY profit (27% YoY adjusted profit for subsidies) growth in H1 FY24.
• The company declared a 14.2 cent/share interim dividend. H2 dividends usually are higher, so we expect a 32-35 cent dividend for FY24. 
• This is another dividend-yielding gem, trading at 12.0x PE FY24e, a 9% dividend yield, and 15% of the market cap in cash and investments with a >50% ROE. 

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.

• Meituan

• YSB would be added to KraneShares CSI China Internet ETF.Cornerstone investors could opt to cash out directly,taking advantage of improved liquidity, which means even they’re not optimistic about YSB’s prospects.
• YSB’s profit margin is disappointing. It would be hard for YSB to deliver decent profits in the end. This business does not make money. YSB is also short of money.
• Since going public, YSB’s share price has been on a rollercoaster, which has deviated from the fundamentals, but it should be pointed out eventually stock prices will return to fundamentals.

• Meituan (3690 HK) ‘s 3Q2023 revenues beat estimates while OP for the quarter was well below consensus estimates.
• There were clear signs of slowdown in earnings growth due to macroeconomic challenges and weaker demand. 4Q earnings are expected to decline further.
• Meituan’s share price went down by about 11% following its earnings announcement as slowdown in core local commerce and weakening earnings have concerned investors.

• Improved transparency from management is an important positive. Additional disclosures were included on entity IRR in the results presentation (attached, not previously disclosed). 
• Profitability target for the consolidated ecommerce businesses moved forward to H2 FY24 from H1 FY25. Significant narrowing of trading losses in H1 FY24 to $36m from $256m in H1 FY23.
• As management ‘commit to highlight value where and when possible’, we think an IPO could very well be on the horizon.

• MNSO reported C3Q23 revenue in line with our estimate/consensus, and non-GAAP operating income in line with our estimate.
• However, stock fell 14% over two days, mainly on concern of slowdowns in overseas distributors;
• Based on our channel checks, overseas distributor inventory has always been a problem, more so when heightened US interest rate pricking the consumption bubble in developing markets.

• Sino-Synergy Hydrogen Energy Technology (9663 HK) (SHET) is looking to raise around US$200m in its Hong Kong IPO. 
• SHET is a hydrogen fuel cell company in the PRC focusing on research, development, production and sales of hydrogen fuel cell stacks and hydrogen fuel cell systems.
• In this note, we will look at the company’s background and talk about valuations.

• Pru is currently trading below its embedded value, with the valuation assigning a negative value for the group’s new business profits.
• Given its quality franchise across all key markets in Asia and continued strong new business recovery (to pre-Covid levels), this doesn’t seem to make sense at all.
• We would continue underwriting the investment case of Pru in the coming year, with the stock offering significant upside potential. 

• CIMC Vehicle Group Co Ltd (1839 HK) possible H Share buyback offer, excluding China International Marine Cntnrs Gp (2039 HK)’s shares, is HK$7.00, an 8.7% premium to the undisturbed price. 
• The key condition is approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection). There could also be a 90% minimum acceptance condition.
• The offer is light, but independent H shareholders holding blocking stakes will likely be supportive. The final offer will be made on “same or better terms”, suggesting a potential bump.

• The final datapoints for the December Hang Seng Indices rebalances were recorded today, slightly altering the initially expected weights and flows. 
• The expected flows have slightly increased since the initial estimates on 15 then 17 November.
• Across all three indices, I see a net total of roughly HK$13.4bn a side to trade. 

• The December rebalance of the HSI, HSCEI and HSTECH indices will use today’s closing prices to cap the index constituent weights at 8%. This will lead to large flows.
• Li Auto (2015 HK) will have the largest inflows due to the HSI inclusion while Xiaomi (1810 HK) will have the largest outflow due to HSTECH capping.
• There will be passive selling in HSBC Holdings (5 HK) for yet another rebalance due to capping of the stock in the Hang Seng Index (HSI INDEX). 

• CIMC Vehicles (1839 HK) is currently suspended pursuant to Hong Kong’s Code on Takeovers and Mergers.
• SOE-Backed CIMC Group controls ~74% of CMIC Vehicle’s H-shares. Presumably, if any Offer was to unfold, it would be from the parent.
• And what price for the H-shares? Around HK$9/share, a life-time high, would be in keeping with premiums seen in precedent PRC-incorporated privatisations. 

• After CIMC Vehicle Group Co Ltd (1839 HK) was suspended yesterday pursuant to Hong Kong’s Takeover Code, the expectation was an H-share Offer from its parent, SOE-backed CIMC Group.
• CIMC subsequently announced an indicative Offer yesterday evening, from its parent, at a $7.00/share for each H-share, a pitiful 8.6% premium to last close. There is no concurrent A-share Offer.
• CIMC traded around $7.00 late September, and comfortably traded through the indicative terms for most of July. 

• In 3Q23, total revenue surged by 94% YoY, as Temu started operations in nine European countries in August.
• Operating profits increased by 60% YoY in 3Q23, so we believe overseas businesses have made profits.
• The stock price reached our last target, but we believe there is still an upside of 40% for 2024.

• Even China’s consumption market is tough, Bosideng Intl Holdings (3998 HK) has still achieved a 25.1% profit growth. Revenue maintained a healthy trend while gross margin was stable.
• Sales trend stayed solid in 2H FY24, and it ranked first in major online channels in various categories of apparel sales during the “double-11” shopping festival.
• Store efficiency improved as revenue saw double-digit growth despite a 9.7% YoY fewer retail network. It is encouraging to see its 3-year target is to outperform the last 5 years.

• Some investors are disappointed with 23Q3 performance, but we think Dong-E-E-Jiao is getting back on track. The de-stocking has achieved great results and pressure on distribution channels has been alleviated.
• Since Dong-E-E-Jiao’s contract liabilities hit a record high, we are optimistic about the performance in 23Q4 and 24Q1. China Resources could further improve Dong-E-E-Jiao’s dividend rate, making it more attractive.
• Since Dong-E-E-Jiao’s performance is continuously improving, valuation still has room to grow. A significant increase in valuation in the short term depends on whether there would be M&A deal emerges.

• The Hang Seng Index is down 1 week and going towards Q2 support at 17098. Not yet OVERSOLD, but it could be soon, WEEKLY and MONTHLY.
• Once the OVERSOLD states begins, it’s time to go LONG: the index has been mildy downtrending for 3 months, it looks like it could be bottoming.
• If the index reaches below 17112.48 (October’s MONTHLY Close), it would be a good area to go LONG, the probability of a rally in December, from there, would be good.

• Huawei’s decision to accept investments to its Intelligent Automotive Solution (HI) has no impact on its Harmony Intelligent Mobility Alliance (HIMA). It might actually strengthen it, in our view;
• We also believe it concludes Huawei’s internal battle of visions.
• The newly integrated business has short term impacts on Li, Nio and XPeng and long-term impact on Baidu and Xiaomi.

• Reportedly, Chinese investors, as well as Middle Eastern sovereign wealth funds, have expressed interest in acquiring a “significant ” minority stake in PCCW Ltd (8 HK)‘s fibre ops. 
• Preceding my comments on PCCW are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• There are 3 changes for the CNI Semiconductor Chips Index that will be implemented at the close on 8 December.
• This is yet another index inclusion for Hygon Information Technology C (688041 CH) – the stock continues to move higher on expected passive buying over the next two weeks.
• Over the last 6 months, the adds have underperformed the deletes but there has been a significant improvement in performance over the last 2 months.

• There will be 6 changes for the ChiNext Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index. Implementation is at the close on 8 December.
• There is a lot of overlap between the adds and deletes across both indices with the one-way trade across both indices estimated to be CNY 2.4bn.
• The adds and deletes have drifted lower over the last few months. However, the adds have outperformed the deletes significantly in the last month.

• ZEEKR (ZK US), a premium EV brand by Geely Auto (175 HK), aims to raise around US$500m in its US listing.
• Zeekr was formed in Mar 2021 as a JV between Geely and its founder. Its first model was launched in Apr 21 with deliveries starting in Oct 21.
• We have looked at the company’s past performance and valuations in our earlier notes. In this note, we talk about the updates from its recent filings.

• Baidu reported revenue/non-GAAP operating profit/GAAP net income inline/7.72%/66.1% vs. our estimation.
• We believe short term cyclical and medium term AIGC-led upswing in advertising can bridge Baidu’s long-term business, which we do see them difficult to monetize.
• We maintain a BUY rating and adjusted TP to US$157, implying a 14.6x PE. It is currently trading at 11.4x PE in 2024.

• Wuxi Lead Intelligent Equipmen (300450 CH) is looking to raise around US$300m in its upcoming Switzerland GDR listing.
• As per media reports, Wuxi Lead was said to be looking to raise US$495m via a Swiss GDR issuance, having secured approval to sell up to 78.3m shares.
• Given the decline in its share price over the year, the eventual deal size could come to around US$300m as of its current last close.

• Full Truck Alliance reported strong growth in Q3, from the right sources
• Improved sales mix & progress on expense control lifted core margins
• With 22% upside to US$9.5 based on 21x PER, our high conviction pick

• In October, the sluggish recovery in outbound tourism demand continued
• Outbound capacity growth also timid; but domestic recovery is mostly complete
• As growth stock, Trip.com’s disappointed; maybe it can attract value investors?

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 Water Affairs

• China Education Group (839 HK) appears to be facing the headwinds from higher USD interest rate and reduction in capitalised interest. The intangible write-off is another drag on FY23.
• Newly registered students increased 17.8% for FY24. With better average fees, this will help the topline. Our concerns are high finance and operating costs will erode revenue growth.
• Consensus is overly aggressive and there are risks of downgrade. Earnings may re-accelerate in the future, but weaker 1H FY24F keeps us on the sideline in the short term. 

• There are 14 changes for the Shanghai Shenzhen CSI 300 Inde (SHSZ300 INDEX) at the upcoming rebalance that will be implemented at the close of trading on 8 December.
• While most changes are in line with forecasts, there are some stocks that have not been added or deleted as the index committee has used their discretion.
• The adds outperformed the deletes in the first half of the year with performance staying stable over the second half of the year. Position for outperformance ahead of implementation.

• The December rebalance of the KraneShares CSI China Internet ETF (KWEB US) will take place at the close of trading on 8 December.
• Fenbi Ltd (2469 HK) and YSB (9885 HK) will be added to the index and there are no deletions.
• There is a big lock-up expiry in YSB (9885 HK) soon after the index inclusion and this could be an opportunity to access liquidity in the stock.

• After market close on Friday 24th November 2023, the December 2023 index review results for CSI 300/500 and SSE 50/180 were announced.
• CSI 300 and CSI will have 14 and 50 changes while SSE 50 and SSE 180 will have 5 and 18 changes respectively. There are many overlapping flows.
• In this insight, I have presented the details of the index changes and aggregated the expected flows attributable to the four indices mentioned above.

• There are 50 changes a side for the CSI Smallcap 500 Index at the upcoming rebalance that will be implemented at the close of trading on 8 December.
• There are 15 stocks that overlap between the CSI 300 Index and the CSI Smallcap 500 Index and there will be opposing flows from passive trackers.
• One way turnover at the rebalance is estimated at 9.56% leading to a one-way trade of CNY 6.04bn. Industrials and Information Technology gain index spots while Materials and Financial lose.

• There are 4 changes for the CSI Medical Service Index that will be implemented at the close on 8 December.
• The constituent changes plus capping result in one-way turnover of 5.9% and in a one-way trade of CNY 1.86bn (US$261m).
• Some stocks will have passive flows from global trackers at the end of November while there will be flows from other local passive trackers at the close on 8 December.

• Tesla Motors (TSLA US) market share in China has decreased and its 3Q23 operational data suggested it offered discounts to defend its market share. 
• Albeit losing some market share, BYD (1211 HK) operational data is much more solid, even expanded its profit margin during a difficult environment in China. 
• Tesla share price has outpaced BYD’s this year by 70%, it should reverse in the next year.

• Tongcheng Travel Holdings (780 HK) is best positioned to capture post-COVID travel, especially in lower-tier cities. This is reflected in a 146.5% growth in 3Q23 adjusted net profit.
• The cooperation with Tencent (700 HK) continues to bear fruits and will drive accelerated momentum as it leverages on QQ Browser, Weixin mini-program, and Tencent Docs.
• 3Q23 net cash increased 1.5x from the end-FY22 level and now represents 10.9% of market capitalisation. Its earnings valuations are attractive relative to both growth and peers.

• It is the upfront payment rather than the total or subsequent milestone payments that indicates the gold content of license-out collaborations. We analyzed our criteria.
• Investors actually don’t need to worry too much about the NRDL negotiation results, because the NRDL price of domestic innovative drugs has become relatively stable. There are basically three levels.
• We analyzed key points about China Resources Sanju. Considering the impact of anti-corruption in 23Q3 and the weak performance of TCM formula granules business, 23H2 performance could be under pressure. 

• From 2020 to 2022, Yan Palace has spent RMB831 million on advertising and promotion, while total net profit of the Company during the same period was only about RMB500 million.
• OneNest is the main product with the highest gross margin, which is driven by price increase strategy.However, raising price may not work. Revenue growth in 2023H2/2024 could further slow down.
• The question is are investors really satisfied with such low-margin business for a company with strong consumption attributes? Valuation of Yan Palace should be lower than Dong E E Jiao.

• Trip.com’s domestic hotel bookings increased by 70% over pre-COVID 3Q19.
• Xiaomi’s revenue began to grow in 3Q23 after decreasing for five quarters.
• China home appliance export surged in October, for example, fridge export amount growing by 42% YoY.

• There are 3 changes for the CES China Semiconductor Chips Index that will be implemented at the close on 8 December.
• Hygon Information Technology C (688041 CH) will be added to a global index in a week and then there will be multiple index inflows at the close on 8 December.
• After underperforming from May to September, the adds have gained ground on the deletes over the last two months and there could be further outperformance over the next two weeks.

• The capping for the Hang Seng family of indices will use closing prices from 28 November while implementation will take place at the close on 1 December.
• The changes for the next S&P/ASX 200 (AS51 INDEX) rebalance will be announced after the close of trading on 1 December.
• It was another week of inflows for the iShares Emerging Markets (EMXC US) to take units outstanding to a new high.

• As expected, the index committee has used a 6-month minimum listing history and that results in one change to the SSE STAR50 (STAR50 INDEX) in December.
• Sichuan Biokin Pharmaceutical (688506 CH) will replace Ninebot (689009 CH) in the index at the close on 8 December.
• One way turnover is estimated at 2.18% and will result in a one-way trade of CNY 3,065m. Sichuan Biokin Pharmaceutical (688506 CH) has moved up and there will be pre-positioning.

• The New and Better (17 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
• Hs with H/A pairs under-perform their As on average. H/A Pair intracorrelation is up and A premia continue to trend better.
• SOUTHBOUND and NORTHBOUND were net sells overall. Everybody sold tech.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• In the IPO space, Tata Technologies didn’t disappoint Tata Group fans, at least on the subscription front.
• The placements continued to flow in this week as well in Japan.

• This is the somewhat-brand-spanking-new Quiddity Mainland Connect NORTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor.
• The same few names continue at the top of the gross flows list – Kweichow Moutai, Contemporary Amperex, Zhongji Innolight, etc, but the nets are changing (and Chongqing Changan)
• Last week, NORTHBOUND were again net sellers (RMB -3.16bn), but Shanghai saw net buys. The top two flows were Chongqing Changan Automobile Company (200625 CH) to buy, BYD to sell.

• This is the somewhat brand-spanking-new Quiddity HK Connect SOUTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and Mainland Connect NORTHBOUND Monitor.
• SOUTHBOUND flows the last several weeks clearly indicated a momentum move. The top net sells were all down. The top buys were all up. We saw a pause, then continued.
• SOUTHBOUND sees more net selling this week of stocks. Last week ETF selling turned flows negative. This week, ETF flows flattered the net sell. Tech still being sold.

• The property management unit of Dalian Wanda Group Co. wants to push back the maturity of a $600 million bond by nearly a year, highlighting the property conglomerate’s deepening liquidity crunch.

• Dalian Wanda Commercial Management Group Co. said Tuesday that it is seeking to delay the payment on the 7.25% note by 11 months due to liquidity pressures.

• The 10-year dollar-denominated notes, issued by its subsidiary Wanda Properties International Co., are set to mature on Jan. 29, 2024, Wanda Commercial, the guarantor of the bond, said in a filing to the Hong Kong stock exchange.

• There are 5 changes for the SSE50 Index (SSE50 INDEX) that will be implemented at the close on 8 December. There is over 1x ADV to trade on some stocks.
• We estimate a one-way turnover of 5.4% at the December rebalance leading to a one-way trade of CNY 4.85bn. Index arb activity could add to the impact on the stocks.
• The adds, deletes and SSE50 Index (SSE50 INDEX) have moved nearly in lockstep since May and the passive flows could move things around a bit.