China: Hong Kong Hang Seng Index, Oriental Watch, Beijing Capital International Airport (BCIA), MicroPort NeuroTech, Guangzhou R&F Properties, Meituan and more

• China A shares has been our top long pick but near 14,700 is due to reverse. Taiwan and Korea were top shorts followed by India (lagging Asia’s decline).
• Near A50 14,700 resistance would bring the HSI back into our top short group. HSI and H shares display slowing upside momentum.
• USD/JPY near our 137 PT is set for a tactical top/pullback while a JGB fade could see the Nikkei jolt lower.

• Oriental Watch (398 HK) profit alert for >350 mn HKD affirms our conviction on the increasing dividend (74 HKD cents for FY22, implying a 15.7% dividend yield). 
• Lockdowns in China (accounting for 67% of the revenue) cast doubt around how H1 2023 will shape up. 
• With cash > 50% of market capitalization, we remain positive on the company maintaining its high dividend payout for FY23 despite weakness in H1. 

• Share price of Beijing Capital International Airport (BCIA) (694 HK) underperformed that for Air China Ltd (753 HK) by wide margin in this year, which we believe is not justified.
• Removal of lockdowns in various districts in Beijing and the revival of international passengers will be the major driver for BCIA to close the valuation gap.
• The gradual relaxation of inbound international passengers at Beijing and the potential for a full border opening in early next years are the catalysts for BCIA’s performance.

• The advantages of NeuroTech are mainly reflected in the comprehensive product portfolio and stable product performance, with higher gross margin, stronger cost control ability and first-mover advantage than its peers.
• The major concerns here are the domestic shrinking market size due to the centralized procurement, the fierce market competition and the pain points on its sales model.
• In terms of valuation, our view is that NeuroTech’s valuation could be higher than that of the peers such as Zylox-Tonbridge, HeartCare Medical, Peijia Medical and Sino Medical.

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.

• Country Garden Holdings Co
• Fosun International
• Greenland Holdings Corp
• Guangzhou R&F Properties
• Lippo Malls Indonesia Retail Trust

• Hong Kong’s Link Riet has excellent assets, but the fears of further lockdowns and rising interest rates do not make for a good combination.
• They seem to be leading other mall operators despite higher quality assets (mostly low-end and necessities).
• Globally none of the delivery services has a cost-effective, scalable model, as they hit the regulatory challenges and hiring costs increases for every scaleup.