China: 51 Job Inc Adr, Hang Seng China Enterprises Index, Jiangsu Recbio Technology, Sinotrans, Shenzhen International, V3 Brands Asia, Anton Oilfield, Central China Real Estate, Greenland Hong Kong Holdings and more

• On the 1 March, 51 Job Inc (JOBS US) said it had entered into a revised merger agreement at US$61.00/share, 22.8% down from the initial terms. 
• 51job has now announced that it has called an extraordinary general meeting of shareholders to be held on April 27.
• Despite regulatory opacity, this transaction appears done. Separately, 51job’s FY21 financials will be released tomorrow.

• The EGM to approve the 51 Job Inc Adr (JOBS US)’s privatisation offer of $61.00 in cash per ADS will be held at 9 am (Shanghai time) on 27 April.
• The transaction is expected to close during the second quarter of 2022. The continuing shareholders represent 56.2% of the voting rights according to the proxy statement.
• Based on 67.5 million ADS entitled to vote at the EGM, around 21% of disinterested shareholders are required to vote in favour to meet the two-thirds voting threshold.

• Most companies have announced their final dividends for 2021 and most of those have announced ex-dates. Banks and oil companies have announced higher dividends than last year.
• CNOOC Ltd (883 HK) has not declared a dividend yet due to its IPO, while Sunac China Holdings (1918 HK)‘s suspension could lead to index deletion in June or July. 
• Using current/proforma index compositions and conservative estimates for interim dividends, we estimate fair value at 240.73 DIPS for 2022. This is a sell at the last close or higher.

• Jiangsu RecBio raised HKD 672m (USD 86m) from its global offering and will list on the Hong Kong Stock Exchange on Thursday, March 31st.
• In the previous note, we looked at the company’s core products, including its HPV portfolio and the COVID-19 vaccine. 
• In this note, we provide an update for the IPO before trading debut.

• Sinotrans (598 HK) has a record year in FY21 with recurring earnings increased 44% YoY. Margin for 4Q21 has shown some improvements against 9M21. 
• Management is generally cautiously optimistic for this year, but also highlighted weaker visibility for the outlook given high base, sporadic COVID-19 outbreak and geopolitical uncertainties. 
• We expect slower earnings growth in FY22, with e-commerce segment being the best-performing. We see lesser credit and asset impairments, and it is cheap at 3.7x PER and 10% yield. 

• Shenzhen International (152 HK) posted 11% profit decline for FY21, with Shenzhen Airlines the main drag. Stripping this and one-off items out, its bottom line would have grown by 46.6%.
• Logistics growth pipeline is highly visible, and this adds to potential gains from logistics park transformation and strategic offload of matured and suitable projects through REIT or private fund.
• The stock remains a deeply undervalued asset play at just 0.48x P/B. Its willingness to share gains with investors has put its dividend yield at 10.4% on current share price.

• V3 Brands Asia (V3 HK) is looking to raise about US$500m in its upcoming Hong Kong IPO. It was previously listed on the SGX between 2000-2016.
• V3 Brands Asia is a lifestyle and wellness firm, it is most known for its flagship massage chairs which are sold under the OSIM brand.
• It has also recorded a bounce back post-COVID as average revenue per store surged. Margins have expanded as well owing to operating leverage and the firm’s partnership with Daito-OSIM.

Anton Oilfield’s FY 2021 results were in line with expectations, with higher profitability offsetting a revenue decline as the company focused on quality and profitable orders. The financial risk profile has improved and guidance for 2022 is very positive. Liquidity appears to be adequate, considering that the company may have just enough cash to pay back the USD 2022 notes (USD 177 mn outstanding). Once the notes have been repaid, leverage should improve significantly.

We move our recommendation to “Buy” from “Hold” on the ANTOIL 7.5 22.

Central China Real Estate’s (CCRE) FY 2021 results remained weaker than expected, albeit slightly improved from H1. The company’s net debt deteriorated y-o-y, and it has now breached all of the regulator’s Three Red Lines thresholds. Moreover, liquidity is inadequate and Cash/ST Debt has fallen below 1x.

Going forward, we expect CCRE to focus on reducing leverage and increasing cash flows. We view positively Chairman Wu Po Sum’s intention to receive his dividends in shares instead of cash, as well as management’s improved transparency and disclosures over the last six months. CCRE is optimistic that it can generate sufficient cash collections to repay the USD 500 mn bonds due in August, on the back of supportive measures recently implemented by the Henan government.

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.

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