China: Perfect Medical Health, Giordano International, Deewin Tianxia, Weilong Delicious Global, CIFI Holdings and more

• Perfect Medical Health (1830 HK) is a recovery play for HK/China beauty trading at 11.8x PE FY23, with a dividend yield of 8.5% (assuming a 100% payout).
• With net cash (including investments) of 565 mn HKD ( > 10% of market cap ), the company is primed for M&A in an environment where restrictions have weakened competitors.
• The chairman’s recent buying of shares ( representing a 0.41% stake ) and the company share repurchase ( representing 0.08%)  indicate the company’s confidence in its prospects. 

• Giordano International (709 HK)’s 1H22 net profit is expected to be in the range of HK$91-101 million, which represents YoY growth of 52-68%. Interims will be out in early August.
• The clear sign of a retail recovery diminishes the prospect of the Cheng family’s low-ball offer of HK$1.88 per share hitting the 50%+ minimum acceptance threshold.
• The offer price has not been declared final suggesting that the Cheng family retains some room to test shareholder appetite with an improved offer.   

• Deewin Tianxia (2418 HK) is looking to raise up to US$147m in its Hong Kong IPO.
• Deewin Tianxia (DT) is a service provider in the commercial automobile service industry in China. 
• Listing sentiment hasn’t been the greatest as of late and the tepid cornerstone list doesn’t help. 

• Weilong Delicious is a is a leading spicy snack food company in China with a market share of 6.2% and ranked first among all spicy snack food enterprises in China.
• The company’s application for a HKEx IPO has been approved and plans to raise proceeds of about US$500m.
• Our analysis on the company’s financials reveal that its top line growth is slowing down while margins have come under pressure. We discuss the details below.

• After the close of trading yesterday, Giordano International (709 HK)  announced a positive  profit alert
• Giordano expects an interim net profit of HK$91mn-HK$101mn, a 52%-68% increase over the corresponding period.
• The Cheng family’s HK$1.88/share Offer was low-balled from the onset. Substantial shareholder David Webb agrees. This deal is dead without a bump.

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.

• CIFI Holdings
• Lippo Malls Indonesia Retail Trust
• Times China