China: PC Partner, FWD Group Holdings, Burning Rock Biotech, Country Garden Holdings Co, Yashili International Holdings, Guanze Intelligent Medical Information Industry Holding, V3 Brands Asia, Shimao Property Holdings and more

• Pc Partner posted record results with revenue and profits increasing by 99%% and 1,047% respectively. The final 1.61 HKD dividend was below my 2 HKD estimate but still solid.
• Cash grew to 3.1 b HKD vs a market cap of 4.37 b HKD, or 70% of market cap. By end of FY22 cash could be 100% of market cap.
• The outlook is mixed with short-term ASP pressure into 2Q22 but longer-term optimism into 2H22. As always visibility is low but offset by a cheap valuation and large cash buffer.

• FWD, a pan-Asian life insurer founded by Richard Li, now aims to raise over US$1bn in its HK IPO after having tried to list in the US last year.
• FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia.
• In this note, we will talk about the updates from the HK filing.

• Burning Rock Biotech (BNR US) shares plunged 35% since I published bearish insight on the company in November. Weak Q3 results, slower recovery, and the U.S.-China conflict remained major overhangs.
• However, the shares are now trading at two-week high, as the company received approval for its second NGS kit in China and reported slightly better-than-expected Q4 results.
• Investors should continue to avoid Burning Rock shares for near-term and wait for COVID cases to subside in China and resolution of the U.S.-China conflict.

Country Garden’s FY 2021 results were stable, given the industry weakness. The cash collection rate remained above 90%, in line with the company’s strategy to ensure fast collection. According to management, Country Garden has CNY 181 bn of cash, of which half is available for use. We believe the company has adequate liquidity, and has access to funding.

Going forward, Country Garden will focus on maintaining stability and a good liquidity buffer. The company will seize opportunities to acquire projects and land deemed to be less risky and offering good profitability. We view positively management’s strategy, given Country Garden’s resilient performance amid the market turmoil.

• For the month of March, five new deals (firm and non-binding) were discussed on Smartkarma with an overall announced deal size of ~US$3bn.
• The average premium for the new deals announced (or first discussed) in March was ~31%.
• This compares to the average premium for all deals in 2021 (165 deals), 2020 (158 deals), and 2019 (145 deals) of 33%, 31%, and 31.5% respectively.

• Guanze relies heavily on sale of medical imaging film products in Shandong Province, and occupies a leading market position in Shandong based on its accumulation in local networks and resources.
• However, the market size in Shandong is limited, with growth ceiling.With the trend of new technology and unproven ability to expand nationwide,there’s a risk of being eliminated in long term.
• In this context, Guanze could face a lot of challenges and uncertainties. Therefore, we are conservative about the Company’s outlook at the current stage.

• V3 Brands Asia (V3 HK) is looking to raise about US$500m in its upcoming Hong Kong IPO. It was previously listed on the SGX between 2000-2016.
• V3 Brands Asia is a lifestyle and wellness firm, it is most known for its flagship massage chairs which are sold under the OSIM brand.
• In this note, we’ll talk about the not so positive aspects of the deal.

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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