In today’s briefing:
- BE Clean Energy Back in the Cross Hairs of China Shandong Hi-Speed Financial Group?
- BeiGene Ltd (6160.HK/688235.CH) – There Is No Way to Retreat
- Out Bullish Outlook on Melco’s Manila City of Dreams Supported by 2021 Gains
- SITC International (1308 HK): All Priced In
- JCET (600584.CN): The 1Q22 Will Be a Lower Season, and the Recent Ukraine Crisis Did Post a Shadow.
- Morning Views Asia: Central China Securities, Hopson Development, Sino-Ocean Service, Yuzhou Group
BE Clean Energy Back in the Cross Hairs of China Shandong Hi-Speed Financial Group?
- Beijing Enterprises Clean Energy Grp (1250 HK) and China Shandong Hi-Speed Financial Group (412 HK)/CSFG have simultaneously entered trading halts today. CSFG is likely a suitor for BE Clean Energy.
- There is a track record of SOE privatisations of clean energy companies – Huadian Fuxin Energy Corp (816 HK), Huaneng Renewables Corp H (958 HK) and CP Clean Energy
- In this note, we look at CSFG’s recent failed attempt at acquiring a 22.78% stake at a price of HK$0.088, along with BE Clean Energy’s trading updates and peer multiples.
BeiGene Ltd (6160.HK/688235.CH) – There Is No Way to Retreat
- After raising over RMB70 billion,investors have much higher expectation on BeiGene than other biotech/biopharma, because BeiGene is “different”,but the real pressure will come over the next two or three years.
- Will BeiGene become China’s first truly international pharmaceutical company, or be dragged into mediocrity by the failure of key trials or the failure of commercialization to meet the market’s expectations?
- It is attractive if the market value is below US$20 billion. However, considering the Russia-Ukraine war and other potential external uncertainties, we advise investors to keep alert.
Out Bullish Outlook on Melco’s Manila City of Dreams Supported by 2021 Gains
- We have guided bullish on Melco Resorts & Entertainment as an early bet on the improving conditions for its Philippines Entertainment Zone property and other group catalysts.
- GGR in Entertainment City Zone rose 20% in 2021 to US$1.35b–pandemic easing.
- Total industry Philippine GGR for 2021 was up 14.5% to $2.2b despite a decline in government run Pagcor casinos which had more widespread lockdowns.
SITC International (1308 HK): All Priced In
- SITC International (1308 HK) achieved a record net profit which surged 2.3x in FY21, but our concern is that much of news has been well in the share price.
- While management is optimistic on its outlook, we think challenges are higher costs (port, bunker and charterhire) and little room for further significant freight rate increase.
- Its 6.7x P/B for FY22F has well reflected its quality but with ROE likely to dip back in FY22 and FY23, we think upside does not look impressive.
JCET (600584.CN): The 1Q22 Will Be a Lower Season, and the Recent Ukraine Crisis Did Post a Shadow.
- The 1st quarter is relatively a lower season. Therefore, we expect that the revenue/NM is about RMB$8. 7bn/9.0% in 1Q22 respectively, which declines ~10% QoQ and grow 30% YoY.
- To our understanding, QCOM is still the biggest client in JCET. The rest of clients have changing a bit in JCET since Huawei was being driven out.
- Overall speaking, China is devoted in developing OSAT (Outsource Semiconductor Assembly and Packaging) business, and the gap shall be close to ASEH and Amkor.
Morning Views Asia: Central China Securities, Hopson Development, Sino-Ocean Service, Yuzhou Group
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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