China

• Shareholders have given SciClone Pharmaceuticals (6600 HK)‘s buyback the go-ahead which will result in the major shareholder holding (upward of) 31.63%, and the freedom to creep.
• As such, a concentrated shareholder register, primarily comprising entities that privatised SciClone in 2017, gets even more concentrated.
• Trading inexpensively ahead of the launch of a new (and approved) drug, SciClone is worth a second look. 

• UBTech Robotics (1683374D HK) is engaged in smart service robotics solutions in China and has filed for an IPO on the Hong Kong Stock Exchange.
• Though the company operates across a number of business segments, the growth prospects seems limited for most of these businesses.
• UBTECH’s cashflow and liquidity also seems to be getting drained as the company needs to spend heavily on R&D and marketing to keep up with constantly evolving technology.

For our next Corporate Webinar we are glad to welcome New Horizon Health’s CFO, Yu Gao.

In the upcoming webinar, Mr Gao will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Ke Yan. The Corporate Webinar will include a live Q&A session.

• ZJLD Group (ZJLD HK) is looking to raise up to US$400m in its upcoming Hong Kong IPO
• ZJLD is a Chinese liquor company primarily producing baijiu. As per F&S, the firm was the fourth largest privately-owned baijiu company in terms of FY21 sales.
• In this note, we will talk about the positive aspects of the deal.

• JD’s post-CNY recovery is slower than expected, based on our checks. We suggest JD would face an unfavourable external environment going forward due to: 1) the comeback of offline commerce; 
• 2) PDD’s growing penetration in high-tier cities and brand products; 3) Meituan Instashopping offers faster delivery than JD.
• We cut JD’s FY23 revenue YoY growth forecast from 13% to 11%. Our top and bottom line estimates for FY23 are (3%) and (5%) below cons. Downgrade to SELL

• ZJLD Group (ZJLD HK) is looking to raise up to US$400m in its upcoming Hong Kong IPO.
• ZJLD is a Chinese liquor company primarily producing baijiu. As per F&S, the firm was the fourth largest privately-owned baijiu company in terms of FY21 sales.
• In this note, we will talk about the not-so-positive aspects of the deal.

• We expect NIO to report 4Q22 top line of RMB 16.7bn and GPM of 13.2%, missing consensus by (4%)/(0.8ppt), primarily due to COVID-related supply-chain issues and lower ASP. 
• We cut TP to US$ 13, due to weak momentum and the ongoing margin pressure in 1H23. We maintain BUY, as 1) intact model cycle starting from 2H23;
• 2) the upcoming ET5 station wagon in 2H23 and the mass-market/low-end brands in 2024 will expand its scale economy, which in turn will justify the sustainability of its business model.

• We believe the 11.4% decline in share price of Orient Overseas International (316 HK) YTD is not sufficient to reflect the plunge in freight rate and weakened load performance.
• Its 4Q22 average revenue/TEU of US$1,822.3 has returned to 2Q21 level; but with latest spot rate already plunged to early-2020 times, there is further downside for OOIL’s realised rate.
• Export outlook is uninspiring as well, indicating pressure on demand. With similar ROE, OOIL only trades at 0.3x P/B in FY20, that makes its current P/B of 0.9x expensive.

We view China South City (CSC) as “High Risk” on the LARA scale given increasing refinancing risk, with significant maturities in the next 12 months. The company’s capital-market access is limited, amid the recent volatile market conditions and heightened yields for the existing bonds. We also note the risks associated with: [1] CSC’s weak financial risk profile; [2] the inherent volatility associated with commercial developments; and [3] potential regulatory changes, including delays in government-led support for infrastructure projects. The company will be increasingly reliant on asset disposals or shareholder support for future payment, especially as property sales have deteriorated.

That said, positives include the: [1] restructuring and introduction of Shenzhen SEZ Construction and Development (SZCDG) as the single largest shareholder following a capital injection in H1/22-23; [2] shift to fast-churn property sales; [3] recurring income from investment properties; [4] above-average, albeit declining, operating margins, thanks to the cheap land bank; and [5] decent geographical diversification in regional centres.

Our fundamental Credit Bias on CSC is “Negative”, given the expected slower recovery in contracted sales for 2023. That said, the company should be able to leverage its relationship with SZCDG for more strategic co-operation and improved access to onshore funding, thanks to its quasi-SOE status. We will look to reinstate a “Stable” Credit Bias on evidence of a turnaround in sales.

Controversies are “Immaterial”. We believe the Chinese property sector has moderate exposure to environmental and social risks. The sector is not energy intensive, but may face social issues related to construction safety and the satisfaction of homebuyers’ requirements. We believe that governance risks are more significant, due to the sector’s generally low transparency and weak internal controls. The ESG Impact on Credit is “Moderately Negative”, mainly owing to CSC’s corporate governance. We highlight that the extensions sought for two bonds due in 2022, and the subsequent extensions for all offshore bonds in July, indicate increasing governance risks.

• We expect Miniso to report C4Q22 top line, non-GAAP operating profit and GAAP net income 1.7%, (1.5%) and in-line vs. consensus. Our C1Q23 top line is 3.7% vs. the consensus; 
• MNSO’s sustained growth driver to be bringing Made-In-China merchandises to the mall economies around the world; We re-evaluate the stock and maintain the Buy rating, with TP at US$22.
• The downward revisions of EPADS：1) slower offline resumption pace from Covid impact in 2022, 2) rescheduled oversea expansion paces, compared to our previous update on Nov. 23rd, 2021.

• HK Electric Investments (2638 HK) will be deleted from the MSCI Hong Kong Index at the close on 28 February. This was largely expected.
• We estimate passive MSCI trackers will need to sell 172.3m shares (US$111m; 19.1 days of ADV to trade). That is a lot. But there are pre-positions on the stock.
• HK Electric Investments (2638 HK) has underperformed its peers and now trades at a lower price to book. There could be outperformance post the MSCI deletion.

• We met with the management of Oriental Watch (398 HK).  HK demand continues to be sluggish, while China sales were resilient with single-digit SSSG growth. 
• The company will continue with its conservative policy of not expanding as Rolex/Patek restrict watch supply. It will only foray into boutique expansions if KPIs on return/brands etc., are met.
• With its generous >100% payout ratio, the stock trades at a 15% dividend yield based on our estimated 6.9x FY23 PE, with >50% of its market capitalization in net cash.

• We estimate JOYY’s 4Q22 top line/bottom line to miss cons. by (3%)/(12%), as TikTok’s influence in major market expands. 
• We suggest that a much slower recovery in 1Q23 does not bode well for its full year outlook. Our top line and bottom line are (2%)/(14%) lower than cons.
• Maintain SELL and cut TP to US$25.1, implying 12.8X PE in 2023.

• We are optimistic about Sonoscape’s 2022 annual results, which was an important turning year. Due to policy catalyst/China reopening, Sonoscape would maintain high growth in 2023, with relatively high certainty.
• Sonoscape has established a high moat in the field of soft endoscopes. Even if new manufacturers enter this market, they are hard to affect the market pattern in short term.
• Although the current valuation is not cheap, based on our forecast of its business lines, there’s still growth space in valuation. Under positive momentum, this stock can be traded repeatedly.

• Link REIT (823 HK) (LREIT) aims to undertake a 1 for 5 rights issue at a subscription price of HK$44.20/unit, to raise around US$2.4bn.
• After announcing a S$2.2bn acquisition in late Dec 2022, the company explicitly mentioned that it didn’t need to raise any new capital. Thus, the rights issue marks an abrupt turnaround.
• In this note, we talk about the right issue, its previous acquisition and the overall implications.

• WuXi AppTec is facing how to keep high growth momentum under the high base of last year’s performance.If there’s no high growth point with certainty,high valuation is hard to sustain.
• The US wouldn’t stop tightening monetary policy until “it’s fully prepared”.Investors need to consider a situation that high interest rate environment is longer than expected,under which CXO remains in trouble.
• Market sentiment towards CXO has changed. We think CXO isn’t suitable for long-term hold but only for short-term trade in 2023. Buying low and selling high is a better 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.

• CIFI Holdings

• REPT BATTERO Energy (REPT HK) is looking to raise US$1bn in its upcoming Hong Kong IPO.
• 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. 
• In this note, we will talk about the not-so-positive aspects of the deal.

• Huitongda (9878 HK) was listed on 18th Feb 2023, when it raised US$285m in its HK IPO. Its one-year lockup will expire on 17th February 2023.
• Huitongda (HTD) is a commerce and service platform serving businesses in the lower-tier retail markets of China.
• Coming up for one-year lockup expiry are HTD’s pre-IPO investors. With the exception of Alibaba and SOE backers, the bulk of HTD’s pre-IPO investors are still currently in the money.

• Yashili International Holdings (1230 HK) latest monthly update notes that Dumex Key Condition 2 is satisfied paving the way towards completing the Dumex China Disposal. 
• The completion of the remaining pre-condition, the 25% Yashili acquisition, depends on the completion of the Dumex China Disposal, which now looks imminent.
• We think the pre-condition will be satisfied by the end of February and the scheme document will be despatched by early April. At the last close, the spread is 6.2%.

• Earnings for Q3 2023 came in at 17.5 mn HKD up 5% YoY, about 15% below our expectations due to closure costs incurred on some restaurants in November. 
• The company added four restaurants in December 2022 which should result in strong revenue growth in January 2023. We expect monthly revenue to surpass HKD 80 mn. 
• Post the recent rally, the stock trades at 8.2x/5.2x FY23e/24e, with a 7.3%/11.5% FY23e/24e dividend yield assuming a 60% payout. We see this as an extremely cheap HK recovery play. 

• We expect Meituan to report 18% YoY topline growth in C4Q22, in line with cons. Our non-IFRS net margin est. is 1.9ppt higher than cons.
• In-Store would be impacted by Douyin’s category expansion and deepening penetration in lower-tier cities.
• We downgrade Meituan to SELL and cut TP to HK$137 due to pressure from competition for in-store.

• On Tuesday last week, short-video app Douyin announced that it plans to offer its food delivery service in more Chinese cities expanding its current trial in Beijing, Chengdu and Shanghai.
• Following this, on Wednesday last week, Meituan announced that it plans to recruit 10,000 workers in 1Q2023 across a number of its business divisions including technology development and customer services.
• Though we don’t expect Douyin’s entry into food delivery to have large impact, increased competitive pressure and headcount increase would drag down Meituan’s profitability in the near-term.

• 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 Koolearn (1797 HK), China Gas Holdings (384 HK), MOG Holdings (1942 HK), Hua Yin International Holdings (989 HK), China Environmental Technology (646 HK).

• UBTech Robotics, a leader in AI-powered robotics in China, filed for a Hong Kong IPO with Guotai Junan Capital leading the offering. The company plans to sell H-shares to investors. 
• UBTech Robotics mulled IPO in 2019, but the company postponed domestic listing in China. In May 2018, UBTech Robotics closed an $820M Series C round at a $5B post-money valuation. 
• Despite challenges, we remain bullish on China’s AI industry and consumer robotics market. However, UBTech’s fundamentals deteriorated, capital dried up, and IPO looks risky today. 

• There is a sharp escalation in business momentum of China Communications Construction (1800 HK) in 4Q22, with value of new contracts signed surged 95.3% YoY to Rmb510bn.
• New contract growth reached 21.6% in FY22, ahead of its target of 11.8%. We estimate its end-FY22 backlog at Rmb3.6trn, which is enough to cover 5x its FY22 revenue. 
• Local governments’ special purpose bond quota may increase by 4-10% in FY23F, boosting CCCC’s contract outlook. At 2x PER, 0.2x P/B and 7.6% dividend yield, CCCC stays attractive.

• We estimate that Weibo’s top line/bottom line would be 1.3%/9.0% vs cons., as the continuous cost-saving measures offset the impacts of temporary disturbance caused by reopening. 
• We remain optimistic about Weibo’s rebound in 1H23 as the macro improves, with top line/bottom line beating cons. by 2.2%/5.5% in 2023.
• Reiterate BUY rating and raise TP to US$ 26.9, implying 11.7X PE in 2023.

• We expect Li Auto to report 4Q22 top line of RMB 17.5bn, in line with consensus, and recovered GPM of 21.8%, vs 12.7% in Q3.
• We reiterate Li Auto as our top pick, because of 1) positive growth outlook in 2023 driven by strong model cycle (L9/L8/L7);
• 2) margin upside in 2023 driven by improved product mix, sharing of auto parts among its product line up, and expanded scale economy; 3) less impacted by Tesla’s price war.

• Koolearn’s successful transformation into a live-streaming e-commerce business showcased outstanding entrepreneurship and leadership of its founder Michael Yu, whom we highly respect.
• That said, we expect its growth to decelerate materially after hitting RMB18 billion GMV by 2024. We value Koolearn at RMB36 billion (20% downside), drawing reference to VIPShop growth trajectory.
• While high-frequency data on live-streaming business will drive near-term stock price (and potentially to the upside), its current valuation doesn’t pay off for long -term investors in our view.

• We observed that businesses at Sa Sa International Hldgs (178 HK) have picked up during the Chinese New Year, but a significant overall significant recovery is still lacked.
• The full relaxation of mainland-HK border control has brought about a 110% surge in mainland arrival between 6 Feb and 11 Feb. This suggests that momentum is clearly building up. 
• Sa Sa has embarked on strategies like re-opening important stores, selectively increase store counts and re-adjusting staff arrangement and opening hours to capture the opportunities.

• There is limited breakthrough points in the field of small molecule drugs. Except those big varieties, the market space of small-molecular drugs is not optimistic due to small applicable population.
• For KRAS, it just crossed the threshold of druggablility, but the whole pathway hasn’t shown the feeling of being a blockbuster variety, which would dampen the optimism of Jacobio’s valuation.
• Jacobio is among the few biotech under Chapter 18A who really develop drugs seriously. Therefore, despite the challenging outlook, we hoped that Dr. Yinxiang Wang would finally break through.

• 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, Hesai Group (HSAI US) provided the first Asia linked listing for the year.
• Things were quiet on the placement front owing to the annual earnings reporting season.

• 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

• The benefits of assisted reproduction being covered by medical insurance are limited. Its main role is still to delay not fundamentally reverse the decline of China’s birth rate.
• If the valuation collapse occurs collectively in one field, it basically reflects that Miss Market does not hold much hope for this field in the future, such as cell therapy. 
• We mainly analyzed some key points of the companies that investors may be interested in, such as iRay Technology (688301 CH) and Shanghai Medicilon Inc (688202 CH).

• Back on the 5 January, First Abu Dhabi Bank (FAB DH) said it had considered a bid for Standard Chartered (STAN LN/2888 HK),  but was no longer evaluating an Offer.
• Such a statement kickstarts a six-month cooling-off period whereby FAB is restricted from reloading. This means all deal work must cease.  Unless another bidder emerges or STAN’s board approves. 
• In a curious development, STAN’s shares popped ~11% yesterday, on no apparent news.

• After being halted this morning before the start of trade, post-close, Link REIT (823 HK) announced a fully-underwritten Rights Offering. 
• The Rights Offering intends to raise HK$18.8bn issuing 1 Right for every 5 Shares held, at a subscription price of HK$44.20, a 26% discount to TERP. 
• This will take an already under-levered REIT and add more capital to it. And there is going to be selling pressure at some point.

• Concord Healthcare Group (CHG HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO.
• Concord Healthcare (Concord) is an oncology health platform in China researching and implementing advanced oncology diagnostic and treatment technologies.
• As per Frost and Sullivan (F&S), in 2021, Concord was the market leader among private oncology healthcare groups in China, as measured by cancer treatment empowerment service revenue.

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. Wynn Macau Ltd
2. Vedanta Resources
3. Softbank Group
4. Country Garden Holdings Co
5. China Hongqiao

and more…

• CATL (A) (300750 CH) is looking to raise up to US$6bn in its upcoming Swiss GDR listing. Bookrunners on the deal are CICC, China Securities, Goldman Sachs, and UBS.
• The relatively large listing comes after the firm has been undertaking a series of capital raisings, since it’s A-share debut back in Jun 2018, to fund its expansion. 
• In this note, we discuss GDR timelines, and the firm’s recent financial performance/valuations.

• Playmates Toys (869 HK) has been listed since 2008 and makes TMNT toys. It has traded as high as 4 HKD/share on the back of successful TMNT movie launches
• Paramount is set to launch a highly anticipated Seth Rogen-produced, TMNT movie in August 2023. In 2013/2014 the stock went up 8x on the last successful TMNT movie launch
• Playmates Toys trades at negative enterprise value, hence giving a large margin of safety option to bet on the success of a TMNT revival

• Kingston Financial (1031 HK)’s scheme resolution was approved at today’s scheme meeting – 99.89% of independent share votes cast FOR (0.09% of all independent shareholders AGAINST).
• The scheme comfortably passed the headcount test with 44 FOR and 13 AGAINST the scheme (56 FOR and 20 AGAINST on a look-through basis).  
• The last trading is on 10 February. At the last close and for the 3 March payment, the gross and annualised spread to the offer is 3.4% and 69.3%, respectively. 

• We estimate that Baidu’s 4Q22 top line/bottom line would miss cons. by (1.6%)/(3.1%), mostly driven by the temporal disturbance of increasing COVID cases after reopening in Dec. 2022. 
• However, we remain optimistic about 2023 outlook: 1) Baidu’s ads would be recovering quickly in 1H23 as macro improves, and 2) leading position in AIGC development gives Baidu more potential.
• Maintain BUY rating and raise TP to US$170, implying 17.2X PE in 2023

• 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.
• Bullish price action and LT momentum failure in Oct/Nov 2023 could be compared to holding a fully inflated balloon under water. Eventually it must rise. 
• January 2023 delivered that spike and a recent correction and multi-day test of key support has delivered an impulsive positive price response today. Target an 8.5% tactical upswing towards 63.90.

• Chinese equities have paused for breath this month underperforming most other global indices
• The outlook for the region remains strong as reopening strength gains momentum and the Government continue to announce new supportive measures
• We favour a buy the dip strategy and suggest using derivatives to play it

• Nayuki bears the most resemblance to Starbucks in that it owns its stores and provides drink, food and space, yet its appealed audience is the narrowest; 
• Shopping mall opening might hit an all-time low in 2023 and is saturated. Nayuki need to think new ways to broaden its targeted market;
• We downgrade Nayuki to SELL and lower TP from HK$13.9 to HK3.1

• To build on our earlier work on the insurance space — and as we search for beta-neutral relative value plays — we look at PICC Group-H’s SOTP valuation.
• The group’s life and health business has historically traded at a steep implicit discount to China Life-H, perhaps deservedly so. But price dislocations do occur from time to time.
• We share our cheat sheet on how we approach these opportunities, which are often good for a quick 10% trade. As usual, we highlight the potential risks as well.

• Dekon Food and Agriculture Group (DFAG CH) is looking to raise at least US$100m in its upcoming HK IPO. The deal will be run by CICC and Citibank.  
• Dekon Food and Agriculture Group (DFAG) is a livestock and poultry breeding and farming enterprise in China, focusing on the breeding and farming of pigs and yellow-feathered broilers. 
• As of 30th Sep 2022, its business footprint covered 39 cities across 12 provinces and autonomous regions in China. 

• Through continuous M&A/resource integration, Haohai has gradually established its four business segments, but such development strategy hasn’t brought ideal performance, which is disappointing if compared with Bloomage and Imeik.
• The future performance driver of Haohai still lies in the medical aesthetics business, but increasing competition and declining gross margin cast doubts on the outlook and growth potential.
• Shanghai Haohai Biological Technology-A (688366 CH) is overvalued. Due to lack of growth point with high certainty, we are not optimistic about the upside potential of Haohai’s valuation.

• The rapid adoption of cloud computing has led to China boasting the world’s second-largest cloud computing market.
• This migration to the cloud is in lock-step with global customer needs: scale, greater efficiency, and availability; together with a reduction in capex and infrastructure complexity.
• The big three PRC telcos are firmly in the mix, with each announcing 100%+ growth in revenue for their cloud businesses in 1H22. Expect that trend to continue.

• We expect that Kuaishou’s 4Q22 top line and bottom line would be 0.2%/3.7% vs cons, as major business lines are recovering with stimuli of CNY promotion campaigns. 
• However, we estimate that its 2023 top line/bottom line would miss cons. by (0.9%)/(14.2%) due to our concerns of increasing competition and internal restructuring.
• Maintain SELL rating but raise TP to HK$ 56 to reflect on-track recovering trend as the macro improves. 

• UBTech Robotics is trying to complete its IPO in Hong Kong in the coming weeks. UBTech Robotics is a leading artificial intelligence based robotics company headquartered in China.
• UBTech Robotics received very fat valuations in the past couple of years. Back in January 2021, it was reported that the company’s valuation reached as high as $7 billion.
• In China’s smart education robot based solution market, UBTech Robotics is the number one player. 

• The revenue brought by CStone’s differentiated layout of pipeline does not match the R&D investment. CStone needs to in-license more late-stage products, but the Company is not cash rich.
• CStone was incubated by WuXi Bio. Its business model is“VC+IP+CRO”. Cstone doesn’t have independent R&D capability. The increasingly low cost performance of in-licensed products has made the capital “reconsider” .
• Cstone doesn’t have the potential to be a biopharma as it licensed out the key/core candidates. Its future valuation growth would be “discounted”. Corporate governance/instability is also a concern.

• China’s swift and sudden abolishment of its Covid rules triggered across-the-board outperformance for Hong Kong stocks. The HSI is up ~13% since early December 2022. 
• A strong rebound of inbound tourism and the resumption of normalised travel between Hong Kong and the mainland should underpin the city’s recovery.
• The retail sector, notably the high street shop segment, should lead this post-Covid recovery in terms of both rents and prices. 

• The potential high-priced acquisition proposed by Wepon failed. In fact, Wepon is in a vicious circle. So, terminating the acquisition is not a bad thing for Consun Pharmaceutical (1681 HK).
• Consun kept positive momentum and its performance was strong in 22H1. Such growth is expected to continue after China reopens as non-COVID related medical demand returns to normal.
• Considering its solid business performance and large cash balance, Consun is obviously undervalued. In our view, even without Wepon’s deal as the catalyst, Consun still has investment value.

• The market seems to be expecting quite a bit from Pinduoduo (PDD US) in upcoming earnings with consensus expecting the company to make around RMB 11.4bn OP in 4Q22.
• With CCP’s anti-monopoly drive on hold, Pinduoduo may need to persuade customers and merchants a bit more than usual via sales and marketing to further improve its market position.
• TEMU was anyway going to be a significant burden on profitability. With aggressive discounting and coupons, we think that burden has gotten significantly heavier.

• HSI Index has paused for breath this month underperforming most other global indices
• The outlook for the region remains strong as reopening strength gains momentum and the Government continue to announce new supportive measures
• We favour a buy the dip strategy and suggest using derivatives to play it

We view Road King as “Medium Risk” on the LARA scale. The company has increasingly focused on growing and improving its property development business. We view favourably Road King’s geographical exposure to the Yangtze River Delta and Pan Bohai Rim regions, as well as the steady cash flow from its toll-road segment. The toll-road business has high margins, and reflects the company’s decent relationship with the government.

However, Road King has little pricing power, as tolls are regulated to avoid excessive charges. We also negatively note the company’s reliance on JV structures for the property and toll-road segments, along with its heavy use of perpetual securities. Moreover, Road King has poor disclosure compared to peers.  

Our fundamental Credit Bias is “Negative”, as Road King may not be able to deleverage in the near term, given its need to replenish the small land bank. Positively, the company has a well-spread debt maturity profile, with the next offshore bond (USD 480 mn) due in September 2024. Road King does not have to redeem its perpetuals, given the absence of coupon step-ups.

Controversies are “Immaterial” and the ESG Impact on Credit is “Neutral”. We believe the Chinese Property sector has moderate exposure to environmental and social risks. The sector is not energy intensive, but may face social issues related to construction safety and ability to meet homebuyers’ requirements. We view governance risks as being more significant, due to the sector’s generally lower transparency and weaker internal controls.

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 Vanke
• Pertamina Geothermal
• Softbank Group
• Vedanta Resources
• O-Net Technologies (Group)