China: JD.com Inc (ADR), Jinko Solar, Li Ning, Green Tea Group, Arrail Group, Yuzhou Group and more

• Revenue grew rapidly by 23% in 4Q21 and we believe revenue will grow by 18% in 2022.
• We are not concerned about the zero net margin, because operating cash flows were still strong in 2021.
• We believe the stock has a price target of US$73, which is 18% over last closing price.

• There could be 3 or 5 changes to the STAR50 INDEX in June depending on the minimum listing history (6 months or 12 months) used by the index committee.
• Jinko Solar (688223 CH) is a high probability inclusion while Shanghai Microport Endovascular MedTech (688016 CH), ArcSoft Corp Ltd (688088 CH) and DBAPP Security Ltd (688023) are high probability deletions.
• The March rebalance will be implemented at the close tomorrow. The adds have outperformed the deletes post announcement and there could be a reversal from next week.

• Norges Bank excludes Li Ning (2331 HK) from its list due to poor labor practices/human rights issues.
• Today’s share price could be a telltale sign of the near-term prospect, down when the majority are up. 
• Will the other international shareholders follow suit on dumping the shares because of the human rights abuse? Potentially yes. 

• Green Tea Group (GT HK) received the Hong Kong Stock Exchange approval to launch its IPO on 7th March 2022, almost a year after filing its first application.
• The company expects to raise around US$100-200m via an IPO jointly sponsored by Citi and CMB International.
• Growth prospects look decent with plans to open 75-100 new restaurants each year. However, We aren’t excited about the IPO as the Company’s business model seems significantly weaker than peers.

• Arrail, the largest dental services provider in China’s premium dental service market has announced the terms for its IPO.
• The company plans to raise net proceeds of approx. HK$590m (US$75.9m) through issuing 46.5m at a price of HK$14.62 per share.
• Cornerstone investors have agreed to purchase approx. US$65m worth of shares and these investors include Abax, Harvest, Hudson Bay, OrbiMed and TVHKL.

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.

• Fosun International
• Times China
• Yuzhou Group