China

• In a long-awaited development, L’Occitane (973 HK)  announced during the lunchbreak yesterday, a scrip alternative. Plus Pleasant Lake Partners (PLP) (3.25%) will accept the Offer (either in cash or scrip). 
• This was positive news. And the market reacted accordingly, up ~1.0% in the afternoon session.
• One quirk in the doc was the perception those electing the scrip alternative may get a higher % in the unlisted Offeror. A back-end bump for PLP? (Hint: No).

• Cofco Joycome (1610 HK) is in a good position to benefit from the hog cycle upturn. China’s anti-dumping investigation into imported pork from the EU may also disrupt supply.
• Its average hog price has increased by 12.7% YTD and by 1.6% YoY for 5M24. Market hog price further surged by 10.4% in the week of 12-Jun from end-May.
• Its P/B of 0.78x is inexpensive at 1SD below the 5-year average. Its peers like Muyuan Foodstuff (002714 CH) and Wens Foodstuff Group (300498 CH) are also interesting. 

• Takeda’s sales team is fully prepared for the launch of fruquintinib in EU. 2024 full-year overseas sales may once again beat the expectations. High growth is expected from 2024 to 2026.
• Peak sales of fruquintinib + savolitinib + surufatinib that recorded in HUTCHMED’s revenue is expected to be over US$750 million.Without considering other revenue, market value would reach about US$4.5 billion.
• HUTCHMED’s pipeline lacks blockbuster products and the indications are small. With the rise of PROTAC, small molecule drugs would face challenges, which would test the management’s resilience 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.

• China Jinmao Holdings
• ENN Energy
• ENN Natural Gas
• MGM China Holdings

• L’Occitane (973 HK) announced the share alternative at an exchange ratio of 10 rollover shares for each offer share, subject to a cap of 5% of outstanding shares.
• The share alternative option will help the offer and was likely required to get Pleasant Lake Partners’ support (3.25% of outstanding shares). There is minimal vocal opposition to the offer. 
• Irrevocables/Letters of support represent 49.83% of disinterested shares. An attractive offer and the share alternative facilitate meeting the minimum acceptance condition, which requires an 80% disinterested acceptance rate (ex. irrevocables).

• Watch accessory play Hengdeli Holdings (3389 HK) is currently suspended pursuant to the Takeovers Code.
• Potentially founder Zhang Yuping (holding 17%), CEO Tony Cheung (16%) and/or Swatch Group (UHR SW) (9.94%) may table an Offer. My money is on Zhang.
• This is a very illiquid name. What is interesting is that Hengdeli has net cash of HK$1.3bn – as at 31 December 2023 – against a market cap of HK$0.59bn.

• The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
• In this insight, we take a look at the rankings of potential ADDs and potential DELs for the September 2024 index rebal event.
• We do not see any index changes in September 2024 but there could be one-way flows of US$425mn due to capping.

• The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
• In this insight, we take a look at the potential index changes and the resultant capping flows for HSCEI index rebal event in September 2024.
• Based on the current data, I see two ADDs and two DELs.

• So far, about 49.8% of disinterested shares from Irrevocable Undertakings/Non-binding Letters of Support would accept the Share Offer. Success is within reach based on a “good enough” privatization price. 
• The Share Alternative is mainly aimed at investors who are hoping for the future re-listing of L’Occitane in the overseas markets – They can still get a vantage point.
• However, re-listing seems still distant/uncertain. The value of Rollover Shares in the future remains uncertain. Investors would face risks if they choose the Share Alternative. The Cash Alternative is preferred.

• It has come to my attention that Lufax management has recently altered the terms of their convertible debt: Based on the terms and conditions of the Ping An Convertible Promissory Notes, as a result of the Special Dividend, the Conversion Price will be adjusted from US$12.
• Based on the terms and conditions of the Ping An Convertible Promissory Notes, as a result of the Special Dividend, the Conversion Price will be adjusted from US$12.76 per Share as at the date of this circular to US$2.32 per Share upon settlement of the Special Dividend, and thus, upon full conversion, the Ping An Convertible Promissory Notes can be converted into a maximum number of 421,077,586 Shares (the “Conversion Shares”).
• The Company considers that the adjustment formula is in line with market practice for anti-dilution provisions in convertible securities.

• We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
• Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and Ginebra San Miguel (GSMI PM).
• While HK stocks have weak data, we persist in being long these names, keeping in mind their long-term outlook and deep value. 

• Chinese real estate investments fell 10.1% in the first five months of 2024 YoY. New home prices fell at the fastest pace in more than 9.5 years in May.
• Fresh bank lending in China rebounded well expectations in May. Chinese banks issued 950B yuan (v/s 1.36T yuan issued last May) in new loans last month.
• China’s consumer inflation held flat in May amid feeble domestic demand, uneven economic recovery, and consumer confidence weakness.

• For first time since 2022, carriers’ cargo revenue, yield, load factor all rising
• Asia outbound, US inbound air cargo tons both improving in early 2024
• SHEIN, Temu could account for 40%+ of US inbound air tons from CH, HK, TW

• Due to increasing competition/price reduction/overcapacity issue, outlook of domestic vaccine companies isn’t optimistic, which has been reflected in 24Q1 results. However, there’s also a “special one” that deserves investors’ attention.
• The status of medical insurance funds is improving rather than deteriorating, but we’re currently in the first half of the decade with the highest pressure on medical insurance.
• As the H.R.8333 proposal faced obstacles in the process of being included in NDAA, WuXi AppTec/WuXi Bio’s shares once rebounded.We remain conservative as situation is not as simple as imagined.

• 4Paradigm, China’s AI software company with focus on enterprise-level solutions, performed well and achieved solid growth in 2023 and Q1 2024. 
• In my insight, I discuss valuation framework for comparable company analysis and set a new 12-month PT for 4Paradigm.
• The company’s management has set a clear goal of profitability. I like 4Paradigm’s leadership position and hyper-growth in revenue from the Sage AI Platform.

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the IPO front, we continued to look at Shift Up (462870 KS),  Guzman Y Gomez and Webtoon Entertainment (WBTN US), along with Mao Geping Cosmetics. 
• On the placement front, there were quite a few deals in India, while Atour Lifestyle Holdings (ATAT US) was the major Asia linked offerings.

• European Commission will impose provisional tariffs on imported Chinese battery electric vehicles.
• Zeekr’s deliveries increased by 117% YoY in 1Q24 and by 112% YoY in the first five months of 2024.
• Ant Group will pay RMB1 billion to sponsor content creators on AliPay.

• China Railway Signal & Communication (3969 HK)‘s latest order backlog is estimated to be Rmb173.7bn, enough to cover FY24F revenue by 4.4x.
• Gross margin has sustained expansion, reaching a record high of 27.8% in 1Q24. Higher R&D expenses will benefit its medium-term earnings.
• Net cash equals 59% of the share price, allowing it to maintain over 50% payout and potentially higher going forward. Operating cash flow has also turned around to positive.

• Ascentage was originally in an extremely difficult situation, but the cooperation with Takeda turned things around. Ascentage has obtained urgently needed cash flow to solve the survival problem.
• At this stage, it’s possible for Ascentage to hit about 50% market value of HCM.  Investors are interested to know if APG-2575 would also be out-licensed, which however is not easy.
• Ascentage’s current strength isn’t sufficient to self-build sales system. While this deal is a good start, if Ascentage still chooses to do commercialization on its own, it’s time to sell. 

• Fangzhou cannot get around the decreasing unit-price of drugs and the increasing role of medical insurance in chronic-disease treatment.It’s challenging to find patients willing to pay out of own pockets.
• The internal dispute between the Founder and shareholders hasn’t ended, and related litigation is still pending. This makes us concerned about the stability of future business development and corporate governance. 
• Fangzhou has significant cash flow pressure. In the case of increasingly fierce competition in the industry, without successful business diversification/transformation, growth prospects is gloomy, Valuation should be lower than peers. 

• SGX Iron Ore prices exhibit seasonality. For select six months being long Iron Ore combined with short positions during other months deliver positive P&L based on back tests. 
• In line with prices, realised volatility exhibits seasonality too. Options strategies can exploit this to deliver superior alpha & higher sharpe ratio.
• Averages confound extreme variances. Monthly iron ore futures price returns are less volatile during the months of December, February, June, October, & March based on range.

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.

• Bharti Airtel
• China Vanke
• Nickel Industries

• We expect strong 30-35% YoY earnings growth in Plover Bay Technologies (1523 HK) for its earnings to be released in July for H1 FY24. 
• We expect the company to continue its 80% dividend payout ratio, which will result in a 4% semi-annual yield (8% annualized). 
• Trading at 12.2x with >50% ROEs and net cash of >30 mn USD, we expect the strong results to catalyze a further multiple rerate.

• Dickson Concepts Intl (113 HK) reported earnings growth of 39% YoY, led mostly by an increase in interest income on the 9.6 HKD/share of net cash/investments on the balance sheet. 
• The company’s net current asset value (NCAV) expanded to 8.2 HKD/share (Vs. FY23: 7.6 HKD/share), and with the stock at 5.2 HKD/share, it trades at a 37% discount to NCAV. 
• The dividend was increased to 45 cents ( from FY23:35 cents/share), placing the stock at an attractive dividend yield of 8.6%.

• The Hang Seng Index correction has restarted this week, after a brief 1-week bounce.
• The index may continue to downtrend for another 1-2 weeks, then a reversal should come and the uptrend should restart.
• Look at the price support area in the 17500-17000 range, because that is where my model indicates the highest chance of LONG reversal.

• Chow Tai Fook Jewellery (1929 HK) reported a weaker-than-expected FY24 net profit. Despite having HK$2.2bn net cash, the lack of a special dividend is even more disappointing. 
• Surge in unrealised loss on gold loans and a YoY contraction in margin have contributed to the poor 2H24 result. Apr-May operating figures showed a deteriorated operating environment.
• Lacking a special dividend, CTF no longer looks attractive at the current level. Overoptimistic FY25 and FY26 consensus forecasts mean earnings downgrade pressure. 

• Travel and box office data in the past three-day Dragonboat Holiday showed worrying weakness despite sharp price cuts by hotel and airlines. 
• Removing travellers from Hong Kong, inbound travel was also quite bad; 
• E-Commerce sales backed by trade-in stimulus outperformed regular merchandises, indicating consumer confidence is still low. We believe the weak travel data boded ill for consumption throughout the year.

• Luckin launched lemonade drinks with raging success of 5.08 mn cups sold for the first week, ~10% of store sales. Market cheered to send the stock higher;  
• We view it with mixed feelings. While it is margin accretive and sales enhancing,  is not conducive to improving coffee penetration and cultivating consumers’ habit for drinking coffee;
• We see Luckin as increasingly one of, instead of the, street drink company, because lemonade is actually the top selling SKU of all milk tea vendors in China. 

• Back on the 22nd May, online shopping platform play Hong Kong Television Network (1137 HK) announced a buy-back of 11.25% of shares out, at $2.15/share, a 20.8% premium to undisturbed.
• Should the Offer complete, co-founder Ricky Wong’s stake, together with concert parties, increases to 51.55% (before exercising options), up from 45.75% currently. Optically, it’s a opportunistic share grab. 
• The Offer Doc is now out, with an EGM to vote on the whitewash waiver on the 9th July. 

• Its unclear whether Yemen-based Houthis would end attacks after ceasefire
• We’ve entered peak Summer shipping season from Asia to US, Europe
• Higher spot rates have already lifted contract rates in Q2 2024

• We preview UMP Healthcare (722 HK)  earnings for FY24 (June-end), which will be declared in September, and our outlook for FY25. 
• The company has more than 300 mn HKD of net cash (almost 75% of its market cap), and even assuming a 20% dividend cut, it has an ~8% dividend yield.
• On core earnings for FY24, we estimate that the stock trades at 12x PE( ex-cash 2.8x PE), with low-hanging fruit from streamlining the business in FY25. 

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.

• Alam Sutera Realty
• China Hongqiao
• Lippo Karawaci
• Tata Motors ADR

• A8 New Media (800 HK) disclosed a Cayman scheme privatisation offer from Mr Liu Xiaosong (Founder, Chairman, CEO) at HK$0.36 per share, a 162.8% premium to the last close price. 
• The massive premium is unsurprising, as A8’s EV has been negative since April 2023 due to headwinds from the weak Chinese leasing sector and uncertainty about cash use.  
• The high takeover premium, no shareholder holding a blocking stake, and low AGM minority participation rate point to a done deal. However, this is a small-cap illiquid stock.  

• Mao Geping Cosmetics is looking to raise around US$300m in its upcoming Hong Kong IPO.
• Mao Geping Cosmetics (MGC) operates in the premium beauty segment. Operating via its two brands, MAOGEPING and Love Keeps, MGC offers a wide range of color cosmetics and skincare products.
• In this note, we look at the company’s past performance.

• Transsion is the global No. 4 largest smartphone producer according to IDC.
• In 1Q24, shipments increased by 34% YoY and revenue increased by 88% YoY.
• We see the stock’s upside at 17% and the price target at RMB100.00.

• QuantumPharm (QUP HK) raised US$126m from its Hong Kong IPO.
• QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
• We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

• Medtide (1268709D CH) is looking to raise at least US$100m in its upcoming HK IPO. The deal will be run by Morgan Stanley and Citic Securities.
• Medtide is the third largest peptide-focused contract research, development and manufacturing organization (CRDMO) worldwide in terms of sales revenue in 2023, according to F&S. 
• Its full-cycle services range from early-stage discovery, pre-clinical research and clinical development to commercial-stage production.

• Increased demand from power plants under construction outside  G-7 countries
• There is constrained supply as with many other fossil fuels
• We look at a basket of coal stocks with good balance sheets and increasing production

• The worst is behind Beijing Capital International Airport. We believe it is on track to achieve breakeven on quarterly basis in 2H24.
• We see recent parking fee hikes at Daxing Airport as a signal that more will come, which is not in the price and can bring in extra option value.
• Boom-And-Bust in China property sector is behind the airport’s share price cycle. The airport is at the cusp of a steady recovery driving mean reversion of valuation .

• Following a suspension on the 28th May, property rental play A8 New Media (800 HK) has now announced an Offer by way of a Scheme from chairman/founder/major shareholder Liu Xiaosong.
• The Cancellation price is $0.36, a whopping 162.77% to last close. The price is final.
• This is a done deal. But A8 is an illiquid micro cap. 

• Around RMB5 billion generic drugs would be included in VBP in 2024/2025 (e.g. sevoflurane/Ioversol/butorphanol tartrate). So, the assumption that all the negative effects of VBP have cleared up isn’t correct.
• Hengrui’s innovative drugs would lose growth momentum after they reach peak sales. It’s difficult for Hengrui to maintain its scale expansion or achieve the over 20% YoY revenue growth.
• Hengrui’s PE would fall below 30 (or even below 20) in the future, which means its valuation would start to enter a downward trend. Current high valuation cannot be justified.

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.

• Nickel Industries
• Road King Infrastructure
• Yankuang Energy Group

• Legend Capital (LC), one of the principal shareholders of Atour Lifestyle Holdings (ATAT US), is looking to raise around US$168m through a secondary selldown.
• This will be the third selldown by Legend Capital in just over a year’s time. Hence, the deal is well flagged.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Activist Argyle Street’s approach to closed-end investment company China Merchants China Direct Investments (133 HK) (CMCDI) has a certain David Webb-like quality.
• Apart from the deep value angle, the analysis of director Elizabeth Kan’s potential conflict of interest is particularly insightful. Argle will vote against Kan’s re-election at the 20th June AGM
• Given this upcoming vote, as I’ve done with Giordano (709 HK) and L’Occitane (973 HK) previously, it’s useful to investigate the lesser-known shareholder register, a byproduct of investigative disclosure reports.

• Some shareholders have confirmed to be acting in concert at the Court Meeting, but long-term investors may vote against the privatization because they are not satisfied with the Cancellation Price.
• The success rate of SciClone’s privatization is lower than that of China TCM and L’Occitane. If fails, there’s a high probability that the share price will fall back to HK$14/share.
• The current share price cannot provide decent returns. Together with exchange rate risk, potential failure risks, etc., there’s no need for investors to take risks at this share price level.

• New Gonow Recreational Vehicles (NGRV HK) is looking to raise US$100m in its upcoming Hong Kong IPO. The bookrunner on the deal is Huatai International.
• New Gonow Recreational Vehicles (NGRV) is a recreational vehicle (RV) platform with an extensive presence in Australasia that designs, develops, manufactures and sells bespoke towable RVs.
• According to Frost & Sullivan (F&S), the firm held the second-largest market share in Australasia’s RV industry in terms of 2023 sales volume.

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

For our next Corporate Webinar, we are glad to welcome Miniso Group Holding Limited’s Investor Relation Specialist, Ms. Allis-Yueling Chen. 

In the upcoming webinar, Allis will share a short company presentation after which, she will engage in a fireside chat with Smartkarma Insight Provider, Eric Wen. The Corporate Webinar will include a live Q&A session.

The Corporate Webinar will be hosted on Thursday, 20 June 2024, 16:00 SGT.

About Miniso Group Holding Limited

Miniso Group Holding Limited is a global value retailer offering a variety of trendy lifestyle products featuring IP design. Since Miniso Group opened its first store in China in 2013, they have successfully incubated two brands, “MINISO” and “TOP TOY”. The flagship brand “MINISO” is a globally recognized retail brand and have established a store network worldwide of 6,630 stores in more than 200 countries. The flagship brand “MINISO” offers a frequently-refreshed assortment of lifestyle products covering diverse consumer needs, and consumers are attracted to their products’ trendiness, creativeness, high quality and affordability.

• Baosteel’s SOE background helps bring more advantages- This deal is a consolidation of assets under SASAC, which may involve some strategic intent at national level. Baosteel has an upper hand. 
• ORG cannot afford to fail considering the strategic significance of CMPC for ORG. Major shareholder of CPMC Zhang Wei has picked ORG side, making it maintain the hope of winning.
• For arbitrageurs, the good news is CPMC would be acquired by either Changping Industrial or ORG, with high certainty.Baosteel is also worth watching since it could be a new leader. 

• With ORG offering a 4.9% higher price and securing Zhang Wei’s acceptance, the ball is now back in Baowu’s hands. Good reasons exist for Baowu to raise its offer price. 
• Baowu’s subsidiary Shanghai Baosteel Packaging-A (601968 CH) needs CPMC Holdings (906 HK) more than ORG, given its smaller market share and weaker profitability.
• At ORG’s offer price, CPMC’s PERs for FY24 and FY25 of 15.4x and 14.2x are cheaper than Baosteel Packaging’s 22x and 18.7x. This gives additional justifications for a higher offer. 

• Based on returns and margins, US-listed Full Truck Alliance is best comp
• Lalatech probably deserves premium valuation multiples vs Full Truck Alliance 
• An equity valuation of US$11bn+ justifiable; will investors look at recent flops?

• Minieye Technology (1426169D CH) is looking to raise US$150m in its upcoming Hong Kong IPO. The bookrunners on the deal are Citic Securities and CICC.
• Minieye Technology (Minieye) is an intelligent driving and cabin solutions provider in China, offering solutions for critical aspects of the driving experience, including piloting, parking and in-cabin functions.
• Providing Level 0-Level 2++ intelligent driving solutions that are full-stack in-house developed and proven by mass production, the firm has also been developing advanced Level 4 autonomous driving technologies.

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 Jinmao Holdings

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: Yichang HEC Changjiang Pharma (1558 HK), Hollysys Automation Technologies (HOLI US), Ansarada Group Ltd (AND AU), Asia Cement China (743 HK), Greatview Aseptic Packaging (468 HK).
• Lowest spreads: Alumina Ltd (AWC AU), Great Eastern Holdings (GE SP), Pact Group Holdings (PGH AU), Nagatanien Holdings (2899 JP), Mimasu Semiconductor Industry (8155 JP), QV Equities Ltd (QVE AU). 

• The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
• SOUTHBOUND’s renewed buy streak continued this past week; every day net positive. Strong net buying. NORTHBOUND saw small net buying on renewables, utilities, and semiconductors.
• AH Premia rebounded off multi-year lows, on average, this past week as Hang Seng/other HK indices fell and A-shares did not do much. Liquid Hs underperformed As by 2%.

• Since the China/Taiwan situation looks increasingly tense, Xu Xudong/Far Eastern Group may be eager to privatize ACC considering geopolitical conflicts and political risks. Its business is subject to strict regulation.
• HK$3.22 Offer Price is disappointing, but the privatization isn’t completely impossible (The headcount does not apply now). A certain number of investors are still willing to accept the Offer Price. 
• For arbitrageurs, the return looks not bad. However, considering the high uncertainties/failure risks, we still advise investors to be cautious. HK$2.5/share is a price point worth participating in.

• In this insight we cover recent earnings results, revenue mix, YTD trends
• Fluctuating performance of its international segment impacted FY23 and Q124
• Improving international segment could boost overall momentum in Q2-Q4 2024

• SOUTHBOUND was again a net buyer, for HK$27.2bn this week, on small two-way volumes. China Mobile (941 HK) dominated as it reached dividend ex-date. Other high-div SOEs also saw buying.
• It is not clear how much of this is H/A discounts, expected dividend tax removal, and the KPIs for SOE CEOs to raise prices and payout ratios, but it continues.
• Valuations are acceptable. Flows are good. Policy changes are afoot. SOUTHBOUND may continue to see inflows – national team and otherwise.

• 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, we looked at Guzman Y Gomez (0817833D AU), QuantumPharm (QUP HK) and Webtoon Entertainment (WBTN US) this week.
• On the placement front, there were a few deals across Hong Kong, Australia and Japan.

• The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
• Last week saw NORTHBOUND net BUY RMB 5.3bn of A-shares on lower gross volumes. NORTHBOUND bought utilities, renewables, and semiconductors, and sold Kweichow Moutai, Midea, Bk Jiangsu, and Wuliangye Yibin.
• Ongoing questions as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected from earlier announcements.

• One interesting interpretation of the new Akeso-summit cooperation is that it aims to pave the way for potential acquisition of Summit by MNC. The climax of the story hasn’t arrived.
• Jacobio is a good target for potential M&A and licensing deals. So, this company has considerable potential returns and also strong safety margin, which is worth taking a gamble on.
• There’re concerns that Genscript could face US scrutiny due to alleged ties with Chinese government. Share price rebound may not last considering geopolitical conflicts and CXO industry downturn in 24H1.

• Tuniu’s revenue grew by 71% YoY in 1Q24, as the company benefited from the travel industry’s recovery.
• Smart Share Global’s revenue plunged by 52% YoY in 1Q24 due to fewer customers in shopping malls.
• PDD plans to price products on behalf of retailers, which reflects the severe competition in e-commerce.

• Shares of RoboSense Technology, a mass producer of LiDAR products and perception solutions, rose ~86% since IPO and outperformed Hesai Group and Hang Seng Index on a YTD basis.
• Founder-Led LiDAR company priced its IPO at HK$43/share and raised ~HK$1B gross proceeds in January. RoboSense shares fell on first day of public trading on the Hong Kong stock exchange.
• Today, RoboSense Technology became the most valuable LiDAR company in the world and is now valued at roughly $4.6B. 

• CPMC Holdings (906 HK) disclosed a competing pre-conditional voluntary offer from ORG Technology Co., Ltd. A (002701 CH) at HK$7.21, a 4.9% premium to Changping Industrial’s HK$6.87 offer.  
• Like the Changping Industrial offer, ORG’s offer is pre-conditional on regulatory approvals and has a 50% minimum acceptance condition. Changping Industrial has secured all regulatory approvals except SAMR. 
• ORG’s skinny premium and precarious irrevocable from Mr Zhang Wei suggests Changping Industrial’s next move is to secure Mr Wei’s irrevocable with a revised higher offer.

• After six months had elapsed, and CPMC Holdings (906 HK)‘s Offeror just needing SAMR/SAFE clearance before launching a firm bid, a competing Offer from ORG Technology (002701 CH) appeared unlikely. 
• Yet in a surprise move, ORG has made a pre-conditional (NDRC, SAFE, MoC, SAMR, and shareholder approval) Offer at HK$7.21/share, a 4.9% premium to the ongoing SASAC/NCSSF Offer. 
• ORG’s pre-con Offer also has a 50% acceptance condition. ORG and concert parties have 24.43%. And Zhang Wei (22.01%) has given has an irrevocable. Directors have 0.87%. Intriguing situation. 

• Meituan reported C1Q24 revenue 6.0%/6.2% higher our estimate/consensus, and adjusted net income 19%/29% higher than our estimate/consensus. The stock fell on lower takeout order and in-store revenue guidance for C2Q24;
• The stock has two uncertainties:(1)Strategic moves by Douyin and Eleme,(2)success of overseas expansion. There are no easy answers to these two questions but we believe the corner has been turned
• We maintain the stock as BUY rating and raise TP to HK$156/share to factor in the improvement in profitability.