China: Hangzhou Tigermed Consulting (H), Cimc Enric Holdings, Kwg Property Holding and more

• Despite solid growth in 2021, if seen from prior years, the revenue YoY growth rate and net profit YoY growth rate showed a state of divergence, which is “interesting”.
• Since half of Tigermed’s net profits were from investment income,it’s not logical to apply the valuation methods of traditional CXO to Tigermed. Its CRO and investment should be valued separately.
• The poor IPO sentiment, risk of recession and the domestic healthcare rational return would make investors reconsider if Tigermed’s “CRO + PE/VC business model” would be a safe play.

• Cimc Enric Holdings (3899 HK) has an encouraging 1Q22 with 24.9% revenue growth. If not the impact of the pandemic and lockdowns in Mar, growth would even reach 35.2%.
• Total new orders increased 23.2% in the quarter even in a period disrupted by lockdowns. Backlog stands at Rmb15.5bn, enough to fully cover FY22 revenue with 7% growth.
• Hydrogen energy business, though still small, witnessed 80.5% revenue growth. Good demand drives new orders to Rmb105.4m; and its backlog of Rmb180m equals to 5x of 1Q22 revenue. 

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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