China: Dongzheng Automotive Finance, CanSino Biologics Inc, Kweichow Moutai, Beijing Enterprises Urban Resources, Beauty Farm Medical and Health Industry, AIA Group Ltd, Lenovo, Agile Property Holdings and more

• It’s now official – SAIC Motor (600104 CH) has made a possible unconditional mandatory cash Offer for Dongzheng Automotive Finance (2718 HK).
• To recap: on the 19 May, SAIC acquired China Zhengtong Auto Services Hldg (1728 HK)‘s 71.04% stake in Dongzheng at a judicial auction. This triggers the mandatory Offer.
• The new news from today’s announcement is that the Offer price was reduced to HK$1.243/share – presumably on account of moves in HKD vs. RMB. The Offer price is final.

• Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry. 
• Overall, net inflow was ~US$1.1bn, split evenly (roughly) between Shanghai and Shenzhen. 
• The largest inflows were into  China Mobile (941 HK) and CNOOC Ltd (883 HK). The largest outflows were in Kuaishou Technology (1024 HK) and BYD (1211 HK).

• Inside is a recap of movements in the last week relating to the Hong Kong Stock-Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry. 
• Overall, net inflow was ~US$0.7bn, split between Shanghai (+US$1bn) and Shenzhen (-US$0.3bn)  
• The largest inflows were into China Yangtze Power (600900 CH) and Cosco Shipping Holdings (601919 CH). The largest outflows were in Kweichow Moutai (600519 CH)and CATL (A) (300750 CH).

• Beijing Enterprises Urban Resources (3718 HK) composite document is out with the MGO’s first closing date of 17 June. The IFA considers Beijing Enterprises Water Group (371 HK)‘s offer fair. 
• The MGO is conditional on the offeror and concert parties holding more than 50% of the voting rights. With the offeror currently at 44.16%, the MGO should become unconditional. 
• At last close and for a 28 June payment, the gross and annualised spread to the MGO price (including final dividend) of HK$0.81 per share is 2.5% and 31.5%, respectively.

• Beauty Farm Medical and Health Industry (BFM HK), second largest body and skin care service provider in China has filed for IPO on the Hong Kong Stock Exchange.  
• Large and growing addressable market, comprehensive service offering, nationwide store network, and sound financial position are the major strengths of the company.
• BFM’s operation faces uncertainties over COVID and related restrictions. This IPO is not expected to see listing gain unless general market condition and China’s economic growth outlook improve.

• Harding Loevner has been investing globally in high-quality, growing businesses based on disciplined industry research since 1989.
• Emerging Markets (EMs) declined sharply, primarily due to the collapse in Russian equities brought about by economic sanctions against Russia because of its invasion of Ukraine, as well as poor performance in China.
• The EM landscape is currently fogged by an exceptional confluence of risks: armed conflict in Ukraine, inflation, rising interest rates, volatile commodity prices, and concerns about food and energy security.
• Although we made only a handful of transactions this quarter, the portfolio’s profile changed significantly because of the write-down of our Russian holdings and the outsized returns of stocks benefiting from commodity price inflation.

• Harding Loevner has been investing globally in high-quality, growing businesses based on disciplined industry research since 1989.
• Emerging Markets (EMs) declined sharply, primarily due to the collapse in Russian equities brought about by economic sanctions against Russia because of its invasion of Ukraine, as well as poor performance in China.
• The EM landscape is currently fogged by an exceptional confluence of risks: armed conflict in Ukraine, inflation, rising interest rates, volatile commodity prices, and concerns about food and energy security.
• Although we made only a handful of transactions this quarter, the portfolio’s profile changed significantly because of the write-down of our Russian holdings and the outsized returns of stocks benefiting from commodity price inflation.

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. Adani Ports & Special Economic Zone
2. Yanzhou Coal Mining Company Limited H
3. Vedanta Resources
4. Indika Energy
5. Pakuwon Jati

and more…

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.