China: Yashili International Holdings, Jiangsu Recbio Technology, Meituan, China Treasury, Zhongtan Nengtou Tech, Sunac China Holdings and more

• China Mengniu (2319 HK) is in discussions regarding its holdings in Yashili (1230 HK) which may result in a number of Potential Transactions, and may include a pre-conditional privatisation offer.
• The Potential Offer would involve a cancellation price of HK$1.20/share, a 31.9% premium to last close, and a 161% premium to the undisturbed price. 
• The recent privatisation of key peer Ausnutria Dairy Corp (1717 HK) provides a guideline to the timeline from here.

• RecBio is an innovative vaccine company with a focus on HPV vaccines. The company is pre-marketing its USD 100-200 million Hong Kong listing.
• In the previous note, we looked at the company’s core products, including its HPV portfolio and the COVID-19 vaccine. Though not impressive, it does provide exposure to China HPV market. 
• In this insight, we provide our thoughts on valuation, including key assumptions.

• Central Financial Working Committee turned friendly to overseas listed internet Companies.
• We believe Meituan will be free from the pressure of anti-monopoly rules.
• Meituan stock has fallen significantly and we upgrade it to BUY.

• Foreign investments in China’s government bonds had been on the rise in recent years with the market appearing to acquire a safe-haven status as it became more accessible and liquid.
• Russia’s invasion of Ukraine may have changed this as the country is likely to default despite its large international reserves, which presents spillover risks to others, particularly China.
• After suffering heavy losses in Russian holdings, investors are likely to factor in political and geopolitical risks more explicitly going forward, which would work against China.

• China’s environmental watchdog has named and shamed four firms for faking carbon emission reports, in the latest sign that data fraud continues to threaten the nation’s green ambitions.
• The Ministry of Ecology and Environment (MEE) said the data verification agencies manipulated reports and falsified testing dates, emissions data and carbon footprint results
• Such agencies are crucial to the measurement, reporting, and verification system used to keep a lid on carbon emissions and allocate quotas to high-emission sectors such as power and chemicals

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
• Sunac China Holdings