China

• In early February, Link REIT (823 HK) announced it would do a 1 for 5 rights offering, with the Exercise Price well below TERP.
• The REIT units dropped in price as the already unlevered REIT was not seen to be needing further deleverage and early debt repayment in a rising rate environment.
• Units went ex-Rights on 24 February. The rights start trading tomorrow. That means flows. Of multiple kinds. Worth thinking about.

• The HSCEI 2023 dividend futures have moved up over the last few months though there was a sharp move lower in the last couple of weeks.
• With results and dividends scheduled to be announced in the next few weeks, we take a look at the fair value estimate for the 2023 dividend futures.
• We also list out the things to watch for over the next few weeks and months that could impact the 2023 dividend futures and the 2023/24 dividend steepener.

• JD Health’s dependence on direct sales business wouldn’t change. But the gross profit of prescription drugs is low. If JD Health increases its revenue proportion, overall gross margin would decline.
• The business supporting JD Health’s high growth in the future is more dependent on the second growth point, but we haven’t seen any new business with high certainty so far.
• The essence of JD Health’s business is “product sale e-commerce” rather than “a comprehensive online healthcare platform” at the current stage, which cannot support high valuation in our view.

• Shum Yip Property Operations Group (SYPOG HK) is looking to raise about US$200m in its upcoming Hong Kong IPO.
• Shum Yip Property Operations Group (SYPOG) is a property management, commercial operational and city services provider in China.
• As per Frost & Sullivan (F&S), the firm was eighth among comprehensive property management, commercial operational and city services providers in China as per 2021 revenue.

• 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.
• Stocks mentioned include Lenovo (992 HK), CLP Holdings (2 HK), GoFintech (290 HK), and North Asia Strategic Holdings (8080 HK).

• DPC Dash (1405 HK) aimed to raise around US$75m in its Hong Kong IPO in December. The company is now back with a revised PHIP which incorporates its FY22 performance.
• The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 562 stores across 13 cities, as of Nov 2022.
• In this note, we talk about the updates from its refiled PHIP.

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
• Greentown China
• Lippo Malls Indonesia Retail Trust
• Road King Infrastructure
• Sino-Ocean Service

• The March 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.
• The largest inflows will be on Li Auto (2015 HK), Meituan (3690 HK), XPeng (9868 HK), JD.com (9618 HK), Alibaba (9988 HK), BYD (1211 HK) and Kuaishou Technology (1024 HK). 
• The largest outflows will be on Tencent (700 HK), HSBC Holdings (5 HK), Baidu (9888 HK), Xiaomi Corp (1810 HK), NetEase (9999 HK), CNOOC (883 HK) and SMIC (981 HK).

• On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.
• At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares. Its value has since declined to US$17bn.
• In this note, we talk about the implications of the deal and what one can glean from looking at the previous dividend payout for JD.com.

• From the time of Tencent (700 HK) announcement of the in-specie dividend, Meituan (3690 HK) has underperformed Tencent (700 HK) and Alibaba Group (9988 HK) by around 35%.
• Surprisingly, short interest on Meituan (3690 HK) has dropped in the last few months as the stock has continued to drop.
• As with JD.com Inc. (9618 HK), Prosus (PRX NA) could sell Meituan (3690 HK) in the months following settlement. Or they could remove the overhang by placing a block.

• On 24 February 2023, the Hang Seng Indices released their changes for the March rebalance. No changes in HSI, which was unexpected, and small changes elsewhere.
• Capping flows and the rule changes on treatment of Dual Primary Listed stocks are responsible for the interesting flows. Yesterday’s closing prices are used for final capping.
• Li Auto (2015 HK) and XPeng (9868 HK) are the interesting trades. Still. 

• JD launched “10bn subsidy” campaign on March 5th. Smartphone and electronics is the main product category and the prices for comparable products are relatively the same as PDD. 
• We estimate that total GMV generated from subsidized products may reach to about 1.5% in 2023, and the incremental cost will be about RMB5bn in 2023.
• We cut our forecast of JD’s non-GAAP net income to RMB21bn in 2023, which is 34% below cons. Maintain SELL with an updated TP of US$42, which implies 22x P/2023E.

• At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
• The 2021/2023 period has produced definitive evidence of bullish LT trend change. We see this in both trend structure and also LT momentum triggers.
• Since 2015, peaks have been in the 8.50/11.00 range. Conservatively, the 2023 uptrend targets the top of the parallel uptrend channel in the 7.25/7.45 range (20%+), likely in H2 2023.  

• We expect NIO to see a share loss in 2023 due to 1) late delivery of its key models; 2) conservative channel expansion plan; 3) uncompetitive pricing. 
• We see headwinds for NIO’s 2023 GPM, including 1) ~10% discount on its legacy models in Q1; 2) weaker product mix toward low-price ET5 into Q3.
• 3) limited expansion of scale economy due to diminished momentum. ● DG to SELL for weak momentum and ongoing margin pressure into 3Q22.

• AISpeech is a high-tech start up specializing in computer speech recognition and AI chip design in China.
• The company is developing intelligent voice interaction technology designed to improve human-machine interaction. It is also developing human-computer dialogue operating system and artificial intelligence chip modules to improve speech recognition.
• AISpeech is in the process of listing in the Shanghai Star Market, aiming to raise about US$1.5 billion.

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
• Central China Securities
• Yuexiu Property

• JD’s “10bn subsidy” program mainly subsidizes uncleared stale (avg. 339 days since launch) Xiaomi smartphone inventory for JD’s 1P/3P distributors but is not conductive for incremental Xiaomi unit demand. 
• Although JD subsidies help clear stale inventory, Xiaomi itself doesn’t benefit as these devices were sold last year and were already considered a sale.
• JD’s program is not conductive of unit volume sell-through for new Xiaomi phone sales given its shallow breadth of stale SKU.  Re-iterate our SELL rating and HK$7.3 TP.

• Chinese carpooling platform Dida (DIDA HK) has refiled for an IPO on the HKEx for the second time (in 2020 and 2021) and could raise around US$200m through the IPO.
• Dida’s last two attempts were not successful and some news media outlets reported that Dida has got assurance from regulators to go ahead with the IPO.
• In this insight, we take a look at the new data points from the company’s latest IPO filings.

• Two JD.com departments began to try fresh food front-line warehouse again.
• Radio and Television Administration plans to clean the content in short video.
• Herman Yu, Baidu’s chief strategy officer and formerly CFO, just resigned.

• BILI’s 4Q22 top line was basically in line, while non-GAAP net loss beat cons. by 8.28%. We largely dial down 2023 revenue forecast. 
• Moreover, we also suggest that recent meeting by the National Radio and Television Administration (NRTA) to curb short video addiction for minor protection would heavily impact BILI.
• Maintain SELL and cut TP to US$ 15.4, which implies 1.85X PS in 2023.

• Luckin Coffee reported its 4Q22 revenue, non-GAAP operating income, and non-GAAP net income (9.1%), (11.4%), (57.9%) lower than our estimate. 
• The store temporary close due to Covid impact is the main reason for revenue miss, and the higher income tax payment is the reason for the miss on NI.  
• We expect Luckin to catch up the store expansion schedule in 1Q23 at 730 new stores, and reach to 10,500 total stores by the end of 2023. 

• Mobvoi uses AI technology to improve the next generation human-machine interaction. The company’s key partners include Google and Volkswagen.
• Mobvoi provides full-stack AI solutions for various hardware-software integration, voice interaction technology and engineering capabilities. The key sectors served include IoT, finance, telecommunications, F&B, and auto. 
• Since the founding of the company in 2012, the company has raised US$253 million in funding. Major investors in the company include Sequoia Capital, ZhenFund, SIG, and Google. 

• MP1000 has strong technical strength, setting it apart from Toumai. SP1000’s advantages are more obvious and the competitive landscape is also better than multi-port surgical robots, indicating corner overtaking opportunity.
• With favorable policy support, Shenzhen Edge Medical (SEM HK) is embracing a golden opportunity. But the commercialization outlook of surgical robots in China is actually not optimistic.
• As a later-comer in surgical robots industry, without the synergy from parent company, Edge’s future sales performance could be even weaker. So, its valuation should be lower than Medbot.

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
• Lippo Malls Indonesia Retail Trust
• NagaCorp Ltd
• Times China

• HKEX (388 HK) has announced that the expansion of Northbound Stock Connect eligible stocks will take effect from the start of trading on 13 March.
• 598 stocks listed on the Shanghai Stock Exchange and 436 stocks listed on the Shenzhen Stock Exchange will be added to Northbound Stock Connect.
• Currently, we see 43 stocks being added to the MSCI China Index in May (inflows of US$1.42bn), further increasing China’s weight in the MSCI Emerging Markets Index. 

• We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads  21Vianet Group (VNET US),Alliance Aviation Services (AQZ AU), 111 Inc (YI US), Toyo Construction (1890 JP), Origin Energy (ORG AU), HKBN Ltd (1310 HK),  Jiangnan (1366 HK)
• Lowest spreads – Ihara Science (5999 JP), Nitro Software Ltd (NTO AU), GK Goh Holdings (GKG SP), Boustead Projects (BOCJ SP), Techno Associe (8249 JP), Nissin Electric (6641 JP).

• It’s unrealistic to turn losses into profits by relying on BRUKINSA alone. BeiGene needs to have three blockbuster products with US$1 billion sales, which is difficult considering current pipeline situation. 
• If investors are optimistic about BeiGene, to some extent, they are betting on the success of BeiGene’s model, but of course, they should also bear the corresponding risks and costs. 
• BeiGene is overvalued, and its current market value has already priced in all positive factors. In this position, we think the risks far outweigh the benefits, because miracles don’t always happen.   

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.

• Adaro Energy
• China Vanke
• Hopson Development

• Founded in 2012, Beijing Yunzhisheng Information Technology Co. (also known as Unisound) is a Chinese company focused on AI powered voice and speech processing technologies.
• Unisound provides voice recognition, language processing and big data solutions to home appliances, automobile, healthcare and education companies.
• Since the inception of the company, it has raised US$361 million in funding. 

• The General Office of the State Council issued favorable policy for TCM industry. However, TCM still has to face VBP, therefore Zhangzhou Pientzehuang Pharmaceutical Co. (600436 CH) and Gushengtang are our top picks..
• Pfizer is in talks to acquire Seagen in a deal worth over US$30 billion, but we remain conservative about whether this transaction would ultimately bring expected contributions to Pfizer.
• Haohai’s business model fails to bring ideal performance. Increasing competition/declining gross margin cast doubts on the outlook of medical aesthetics business. We’re not optimistic about its potential valuation upside.

• 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

• Yashili International Holdings (1230 HK) has announced that the disposal of Dumex China to Danone SA (BN FP) has been completed.
• This satisfies the second of three SPAs announced last May, leaving the sale of Danone’s 25% stake in Yashili to China Mengniu Dairy Co (2319 HK) outstanding. 
• This stake sale should conclude next week, to be followed by the launch of the Scheme later this month, early next.

• Yashili International Holdings (1230 HK) announced that the Dumex China Disposal was completed. The completion will result in the satisfaction of the last pre-condition, likely within five business days.
• China Mengniu Dairy Co (2319 HK)’s offer is HK$1.20 per share. Due to the upcoming release of full-year results, the scheme document will be likely despatched by early April. 
• This is a done deal and timing is the key risk. At the current price and for a late-May payment, the gross and annualised spread is 2.6% and 11.3%, respectively.

• Bilibili reported 4Q2022 results. Net revenue increased 6.2% YoY to RMB6,142m (vs consensus RMB6,154m) while operating losses expanded to RMB2,327M (vs consensus RMB1,905.9m).
• Mobile Games revenues declined 11.5% YoY in 4Q2022 due to the restructuring of the games biz to focus on self-developed gaming titles.
• We expect Bilibili’s earnings to remain under pressure with aggressive cost controls to impact growth and Mobile games to slow-down in 2023E with lack of new titles for launch.

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

In this Insight:

1. China Jinmao Holdings
2. Lifestyle International Holdings
3. Geely Auto
4. First Pacific Co
5. Tata Motors Ltd

and more…

• NetEase delivered a mediocre set of results for the last quarter as it failed to meet market expectations with respect to net revenues.
• The company’s legacy titles, including the Westward Journey Online series and Fantasy Westward Journey Online did perform well and helped deliver an earnings beat.
• The company’s new game, the Egg Party, hit the Chinese market by storm this quarter.

• We believe the revenue growth rate would still be low at 8.5% YoY in 4Q22, even lower than 11.4% YoY in 3Q22.
• However, we believe the growth rate of total revenue will be 10% in 2022, 15% in 2023, and 18% in 2024.
• We believe the stock has an upside of 47% for year end 2023.

• JF Wealth Holdings (9636 HK) is looking to raise US$143m in its Hong Kong IPO.
• JF Wealth (JFW) is an online investment decision-making solution provider in China, focusing on the online investor content services market. 
• In this note, we discuss our earnings estimates, and thoughts on valuation.

• Baidu managed to deliver an all-around in the last quarter beat despite the fact that its financial performance was impacted by a challenging environment because of a rapid rise in COVID-19 cases as well as its impact on the broader economy.
• Both feeds distributed through the Baidu app and mobile search queries continued experiencing double-digit growth in the quarter.
• Baidu is expected to launch Ernie Bot, its new conversational AI bot, powered by its latest in-house large language models, to counter ChatGPT.

• Alibaba managed to deliver an all-around beat despite experiencing significant challenges because of the rapid change in the Covid situation.
• The company delivered double-digit growth in its free cash flow and adjusted EBITA through operating efficiency and cost optimization.
• The strong net cash position of Alibaba is supported by its healthy cash flow generation.

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

• BILI’s 4Q results missed expectations across key metrics from revenue and MAU growth to guidance for 2023
• The results suggest fast growth will not return in 2023 and an uncertain road to breakeven by 2024.
• Reiterate our bearish view on the stock and see further downside risks ahead.

• The fourth quarter looks like a weak quarter according to the growth and the loss.
• However, deducting the termination cost for game studios, we believe the financials will be promising in 2023.
• We believe the stock has an upside of 19% for the yearend 2023.

• Weigao formed a diversified product lines through a series of acquisitions and capital operation. Its performance is more driven by sales not R&D, with limited core competitiveness.
• Weigao’s orthopaedic products business is under pressure due to VBP, which would drag down the overall gross margin. The acquisition of Weigao New Life is hard to turn things around.
• Weigao is a holding platform, which is worthless in secondary market.There could be some temporary rebounds but share price could still underperform or its valuation is lower than comparable companies.

• ZaiLab reported C4Q22 top line 3% above our estimate. Operating profit was worse than our estimate and consensus while net income was better mainly due to government grant; 
• We maintain ZLAB’s business model is inherently flawed because each blockbuster drug it signed needs comprehensive sales support.
• As a result, ZLAB’s pipeline needs to be heavily discounted; We maintain our SELL and cut TP from US$30 to US$25.

• We revise our recommendations for FOSUNI 6.75% Jul 2023, FOSUNI 5.5% Aug 2023, FOSUNI 6.85% Jul 2024 to Hold from Sell. FOSUNI 5.95% Oct 2025 and FOSUNI 5.05% Jan 2027 remain on Hold recommendations and Credit Direction remains Negative. 
• The new RMB12b credit line provides some liquidity relief and improves the likelihood of Fosun’s ability to meet its debt obligations in 2023.
• However, more offshore asset disposals or pledges for loans need to be done to cover the remaining offshore bond maturities during the year.

• China Vanke aims to raise around US$500m in its H-share primary placement.
• Vanke had recently stated that it aimed to raise around US$2bn via an A-share private placement, so a placement was expected for sure.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• News reports indicate that China Vanke (H) (2202 HK) is looking to place 300m shares at a price range of HK$12.93-13.20/share to raise around US$500m.
• The 300m shares is nearly 33 days of ADV, but around 11-12% of the new shares will be bought by passive trackers early next week and provide near-term support.
• China Vanke (H) (2202 HK) trades cheaper than its peers on EV/Sales, EV/EBITDA and forward PE. Shorts have ticked higher in the last couple of weeks.

• Reportedly (Bloomberg) Hong Kong broadband play HKBN Ltd (1310 HK) has received a takeover offer from  I Square’s HGC Global Communications. 
• HKBN’s shares were halted in the late afternoon trading session yesterday after gaining 11.6%. The reason stated for the suspension was “possible inside information“, not pursuant to the Takeovers Code. 
• Last May, Bloomberg reported that KKR, PAG, and Stonepeak – amongst others – were considering bids for HKBN. The market cap at the time was US$1.6bn versus US$934mn now.

• Meilan Airport issued a profit warning last night expecting a net loss of not more than RMB280 million for 2022. 
• While the magnitude of loss surprised us, positive share price reaction suggests investors are ready to look beyond.
• We incorporate both higher passenger throughput and financial expenses estimate in our model and trim our net profit forecast for 2023 from RMB600 million to RMB500 million. Maintain Buy. 

• Weaker 2H22 and FY22 earnings are primarily caused by disruption from the pandemic, and the 18.7% share price retreat since 2022 should have well factored in an unexciting year.
• Recovery of construction revenue, rebound in margin, completion of pipeline projects, increase in water tariffs and faster receivable collections are the key positive factors to watch. 
• China Everbright Water (1857 HK) will generate ROE of 9.8% and 10.3% for FY23 and FY24. Such return profile renders its 3.5x PER and 0.35x P/B for FY23 inexpensive. 

• Beisen Holdings (1667838D CH) is looking to raise about US$200m in its upcoming HK IPO. The deal will be run by Morgan Stanley and CICC.  
• Beisen Holdings is the largest provider of cloud-based HCM solutions in China in terms of revenues in 2021, according to CIC. Its platform iTalentX delivers cloud-native SaaS products. 
• Its platform is the first and the only in the industry to offer a suite of cloud-based applications covering organization’s HCM needs throughout the entire employee lifecycle, according to CIC. 

• JF Wealth Holdings (9636 HK) is looking to raise US$143m in its Hong Kong IPO.
• JF Wealth (JFW) is an online investment decision-making solution provider in China, focusing on the online investor content services market.
• With total gross billings of RMB2bn in 2021, it was the second largest online investment decision-making solution provider in China with a 5.9% market share.

• Miniso reported its C4Q22 revenue at RMB2,494mn, (2.6%)/1.1% vs. our estimate/consensus,  non-GAAP net income at RMB373mn, 27.8%/29.0% higher than our estimate/consensus; 
• We expect Miniso’s revenue to achieve 33% YoY in C2023, driven by 1) the store expansion in both domestic and overseas market, 2) domestic single store revenue recovered;
• We maintain the stock as BUY rating, and raise TP by US$2 to US$24, reflecting Miniso’s expansion of domestic store network in low tier cities

• Leading Chinese drug-ingredients supplier Northeast Pharmaceutical Group Co. Ltd. was fined 133 million yuan ($19 million) for abusing its dominant market position in materials used to make a treatment for kidney dialysis patients.
• The market regulator in northeastern China’s Liaoning province conducted a three-year investigation of Northeast Pharmaceutical’s monopoly in the market for ingredients to make levocarnitine.
• The medicine is used to treat dialysis patients for a lack of carnitine, a substance that helps the body convert fat into energy

• VIPS reported C4Q22 total revenue largely in line. Non-GAAP net profit beat our est. and cons. by 12%, mainly due to gross margin improvement and reduction in G&A cost. 
• The loyal customers of Super VIP program and strong focus on apparel category make the platform relatively immune to the pricing competition in eCommerce space.  
• Despite intensifying competition, VIPS would maintain stable margin while enjoying gradual return of discretionary spending. Upgrade to BUY with TP of US$16.3, which implied 10x P/2023E.

• Bloomberg reportedHKBN Ltd (1310 HK) has received a takeover offer from HGC Global Communications at a valuation of more than US$1 billion (implies around HK$6 per share).
• The shares rose 11.6% to HK$5.59 before entering a trading halt. The rumoured price is underwhelming compared to historical multiples and share prices. 
• HKBN has a relatively concentrated shareholder register which suggests that the rumoured takeover premium of around 20% is not going to cut it.

• IQIYI Inc (IQ US) ‘s share price is up 30.8% YTD primarily driven by upbeat 4Q2022 results. The main highlight was strong increase in members alongside improvement in OPM.
• The company’s aggressive cost cutting measures have helped reach operating profits, however, we don’t think this is sustainable given user growth depends on content.
• We expect iQiyi’s 1Q2023E results to be strong driven by the launch of The Knockout series, however, further cutting down costs will impact the company’s long-term prospects.

• Despite the rally in share price after trading resumption and a reasonable FY22 result, there are still several tough issues faced by China Yuhua Education (6169 HK). 
• Cash management, especially for offshore; no dividend payout in the near term; availability of CB refinancing and weakened margins are just some of the challenges. 
• Conversion to profit-basis for its schools and the operating outlook for new schools are also added issues that it needs to address. In our view, risks still outweigh return.

• Trip.com reported a strong growth in booking volumes during CNY. Booking volumes remain strong in Feb 2023
• Outbound travel is likely to accelerate in 2H 2023
• Ending almost three-years of zero-Covid policy, China’s domestic and outbound travel enjoyed a long-awaited boom post China’s reopening and lifting of travel restrictions.

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
• Vedanta Resources

• We conducted interviews with Temu and Shein merchants. We expect Temu to be more aggressive in expansion. Most metrics of Temu are improving, and it creates increasing pressure on Shein. 
• Yet, investors should be aware about Temu’s widening losses and the possible margin drag in the domestic eCommerce business due to the subsidy campaign launched by JD.
• We revised our forecasts on Temu’s GMV/non-GAAP net loss in 2023 from USD 2bn/(1)bn to USD 5bn/(3)bn. We cut PDD’s TP to US$100.

• BeiGene (BGNE) reported C4Q22 top line missing our estimate by 13%. Main reason for the miss is weaker than expected BRUKINSA and Tislelizumab sales in China; 
• While China growth does appear to be a drag, international sales is robust and has potential. Consensus is also reasonable with gross margin having upside;
• We cut TP from US$225 to US$219 and maintain BUY. Reliance on international sales heightens BGNE’s political risk.

• PCCW Ltd (8 HK)‘s FY22 revenue, EBITDA, and profit increased by 2%, 6%, and 11% to HK$36.1bn,  HK$12.4bn, and HK$834mn.
• HKT Ltd (6823 HK)‘s revenue, EBITDA, and profit increased by 0.5%, 3%, and 0.4% to HK$34.1bn,  HK$13.1bn, and HK$4.7mn.
• The dividend pass-through is 100%. PCCW’s current discount to NAV is in line with its 52-week average.

• BABA reported F3Q23 (C4Q22) total revenue largely in line with our est. and cons. Non-GAAP net profit beat our est. and cons. by 5% and 13% YoY.
• Taobao will face pricing pressure against JD and PDD. We expect BABA to focus on user content, which leads to improvement in app time spent and advertising. 
• We cut TP from US$130 to US$110 to reflect intensified competition in eCommerce. Maintain BUY rating due to recovery in CMR and international retail, and rebound in cloud business. 

• Investor interest in Pinduoduo (PDD US)  has surged, hitting record-high levels of fund ownership this month.
• Over the period from the recent lows in March 2022 to today, Pinduoduo’s +20% increase in the percentage of funds invested was the highest across all stocks in China.
• New positions from JSS All China (+7.49%) and Tamaq China Champions (+4.99%) were complemented by increased weights from China Fund (+5.35%) and GAM China Evolution (+5.26%).

• Baidu delivered 4Q22 results with top line beating cons. by 3.2% and non-GAAP net income beating cons. by 13.4%. 
• We expect both its ads and AI cloud businesses to recover with accelerated pace, which could partially offset the increase of R&D investment in AI related technologies.
• Reiterate BUY rating and slightly raise TP to US$ 172 to reflect the on-track recovery and AIGC synergy. Our TP implies 17.9x PE in 2023.

• Lu Daopei Medical Group (1816743D CH) is looking to raise around US$400m in its upcoming Hong Kong IPO. 
• Lu DaoPei Medical Group (LDPM) is a hospital operator focusing on hematology healthcare services. As per F&S, it was the largest hematology healthcare services provider in China by 2021 revenue.
• LDPM has supported its growth through its flagship hospital. However, it is unclear whether the firm will be able to sustainably maintain profitability in the long term. 

• China’s securities regulator is investigating auto component supplier Nanjing Aolian AE&EA Co. Ltd. (300585.SZ -3.76%) after its stock price fell more than 30% this week when questions arose about its expertise in a key solar panel technology. 
• The China Securities Regulatory Commission (CSRC) has started scrutinizing the firm on suspicion of providing false information to the public about its new business, according to a note that Nanjing Aolian received Thursday night.
• The investigation added to doubts about the company’s expertise in perovskite batteries at a time when it is defending itself from a separate regulatory inquiry into whether it took advantage of market interest in the technology to inflate its stock price.

• NetEase’s 4Q22 revenue was in-line with cons., while its non-GAAP net income missed cons. by (8%) because of a one-off, non-renewal contract with Blizzard.
• We still see NetEase as a BUY because of <Eggy Party>’s overseas publishing and <Justice Mobile>, which we estimate will contribute about 1-2bn/3-4bn RMB for annual gross billing, respectively. 
• We maintain BUY and TP US$ 87, which implies 16.0X PE in 2023.

• Chinese food delivery giant Meituan launched a recruitment campaign in Hong Kong signaling a push into the Asian financial hub dominated by foreign on-demand service leaders foodpanda and Deliveroo.
• Meituan is hiring delivery workers including motorcycle and bike riders as well as so-called foot soldiers who can dispatch orders by foot, a recruitment document showed.
• As an incentive, Meituan said new riders who complete a certain volume of orders will receive a bonus of HK$2,500 ($319).

• IceKredit, a Chinese AI-focused credit risk and management company, plans to export its AI-powered products and solutions to financial institutions in Southeast Asia.
• Founded in 2015, IceKredit helps lenders to establish an automated end-to-end digital lending process – from application pre-screening to collections – by providing risk mitigation products and services.
• In the past two years, the firm has raised over US$58 million in series C funding, a large part of which will be used for its Southeast Asian expansion, the company says.

• At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
• The HSCEI has produced 2 material failures below 5000 in the last 17 years, in October 2008 and October 2022. Aggressive bullish multi-month reversals followed in both cases. 
• The 2008 upswing paused when a bearish monthly reversal pattern was delivered in January 2009, but only for 2 months. The bearish monthly reversal pattern in February 2023 appears similar.