Smartkarma Daily Briefs

• With the Hang Seng Index dipping below the 15,000 mark earlier this week, it’s time to dust off some old school perspective.
• This insight looks at Benjamin Graham’s Net Nets, (current assets less current liabilities), then subtract any debt not included in current liabilities. More simply, current assets less total liabilities.
• Graham would conclude these stocks are priced for liquidation.  Stocks discussed include Brilliance China (1114 HK), Ming Yuan (909 HK), Yidu Tech (2158 HK), and A-Living Smart City (3319 HK).

• Short notional in Hong Kong is HK$335bn and has been falling over the last 12 months due to a drop in the market.
• In terms of short notional to marketcap, the Materials, Consumer Staples, Health Care, Utilities, Real Estate sectors are most shorted while the least shorted are Information Technology, Communication Services, Energy.
• The largest shorts have been built on BYD (1211), XPeng (9868), ICBC (1398), Xiaomi (1810), Link REIT (823), JD.com (9618), Wharf Holdings (4) and New World Development (17). 

• Nearly halfway through the review period, we forecast 7 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index in June.
• Some of the potential changes will also have passive flows from the CSI 500 Index trackers at the same time as the ChiNext Index rebalance.
• The potential inclusions and deletions have slipped over the last couple of months along with the ChiNext Index, but the potential inclusions have outperformed as the deletions have dropped more.

• US-Led tech chain may push for AI phone features, which itself is a great strategy to pull the tech industry out of doldrums. It will pressure Huawei, in our opinion;
• We believe there are other stories unfolding in the AI era, including availability of AI killer apps, the rivalry between super apps and OS vendors, and the growing China/Ex-China chasm.
• Our Top Pick is Tencent and Kuaishou. We maintain Xiaomi at SELL.

• We attended Miniso’s Investor Day on January 18-19 and came away positively. Management outlined growth strategy of fostering strong connection with Chinese supply chain to achieve fast turnaround of…
• We expect MNSO to report C4Q23 revenue and non-GAAP NI at 2.9% and 4.0% higher than consensus mainly due to new store openings;
• We maintain the stock as BUY and raise TP by US$2 to US$33/ADS to reflect our endorsement of the growth strategy.

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.

• Anton Oilfield
• Greentown China
• Reliance Industries

• Geopolitical risks have led to foreign companies planning to withdraw from China.It’s also difficult to allow foreign companies to control China’s core strategic assets.So, Grifols and RAAS’ “breakup” is inevitable.
• This acquisition is an important milestone in the development of Haier’s big health industry. RAAS’s valuation also has room to rise further after being acquire by Haier due to synergies.
• In the case of slowing growth in the home appliance market, this is a wise move for Haier.However, potential goodwill impairment in GDS is a risk for Haier/RAAS and investors.

• HEVI announced the addition of Amerit Fleet Solutions as an Authorized Service Provider to support the company’s electric powered heavy industrial equipment.
• Amerit Fleet Solutions, which has more than 800 locations nationwide, joins Mid-Atlantic-focused Quality Truck Center as the second multi- location service company that has partnered with HEVI to support customers with its equipment.
• The addition of another service provider should help boost the growth of HEVI’s products. In addition to expanding awareness of the brand, this should help alleviate any concerns that potential customers might have about supporting and servicing their equipment.