China: NIO Inc, Great Wall Motor, Arrail Group, Tsingshan Holding Group, Jinmao Property Services, Bilibili Inc, Ascent ENT Group Holdings, China SCE and more

• NIO Inc (9866 HK) is expected to list on the HKEX (388 HK) tomorrow. Nearly 820m Class A shares are now held on the Hong Kong Share Register.
• We do not expect NIO Inc (9866 HK) to get Fast Entry to the HSCEI INDEX and HSTECH INDEX, though inclusion in the HSTECH could take place in June.
• NIO Inc (9866 HK) is not likely to get Fast Entry to the HSCI. The stock is not eligible for Southbound Stock Connect as a Secondary Listing.

• Great Wall Motor (2333 HK) could replace Hansoh Pharmaceutical (3692 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the June rebalance. The review period ends 31 March.
• Bilibili (9626 HK) is a close add while Sunac China Holdings (1918 HK) is a close delete. Stock prices moves over the next 3 weeks will decide on the changes.
• Passive HSCEI Index trackers will need to buy 1.74 days of ADV on Great Wall Motor (2333 HK) and sell over 3 days of ADV on Hansoh Pharmaceutical (3692 HK).

• Arrail is a leading premium dental service provider in China. The company launched book building to raise up to USD 87m via a Hong Kong listing.
• In our previous notes, we looked at the company’s background, its operation, its financials, and its expansion plan, and compared its key metrics with peers and provide thoughts on valuation.
• In this note, we provide a quick update for the book building.

• A Chinese metal giant is scrambling to manage massive losses from shorting nickel futures after the metal went on an unprecedented rally.
• Tsingshan Holding Group Ltd., one of the world’s biggest nickel and stainless steel producers, came under mounting pressure to meet margin calls for its short position
• The price of the metal, used in stainless steel and electric-vehicle batteries, surged as much as 250% in two days

• Jinmao Property Services (816 HK) raised around US$105m in its Hong Kong IPO. 
• In our view, the firm doesn’t deserve to trade at a premium to peers given its weaker margins and slower growth in FY20. 
• In this note, we will look at the trading dynamics and current valuation.

• Arrail is the largest dental services provider in China’s premium private dental service market and the third in the overall market in terms of total revenues in 2020.
• The company has filed for an IPO to list on the Hong Kong Stock Exchange and plans to raise about US$86m.
• The group has experienced strong growth despite the impact of COVID-19 and China’s growing private dental market offers large potential for the company to grow.

• Bilibili Inc (BILI US) reported 4Q2021 results last week where revenues increased 50.6% YoY to RMB 5.8bn while operating losses increased to RMB 2bn compared to RMB 903m in 4Q2020.
• This marks the lowest YoY growth in top line since 2Q2019. Though all segments experienced YoY growth in revenue, we have observed that the growth is slowing down.
• The company also has announced a share buyback of up to US$500m of its ADS over the next 24 months

• For ENT services, the number of patients and scale of ENT field are relatively stable, with growth ceiling.
• Due to the limited doctor resources in Singapore and the intensified multi-party competition faced by Ascent, there may not be exciting future growth potential.
• So, we are conservative about the Company’s outlook if it just operates the business within Singapore or without diversifying its business effectively.

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.

• China SCE
• KWG Living Group