Daily Brief China: 111 Inc, Tencent, Innovex Medical, China SCE and more

• 111 Inc (YI US), the largest virtual pharmacy network in China, disclosed a privatisation proposal from a co-founder-led consortium at US$3.66 per ADS, a 20.0% premium to the undisturbed price. 
• For privatisation to succeed, shareholders representing two-thirds of shares present and voting need to approve the deal. The co-founders represent 92.04% of the total voting power.
• The offer price is unattractive but this is a done deal. At the last close, the gross and annualised spread for a January 2023 completion is 11.6% and 33.4%, respectively. 

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• On the IPO front, a few large Hong Kong IPOs are lining up to launch soon.
• Placements picked up this week in Japan and India with most being secondary deals.

• Tencent invested more in Ubisoft Entertainment, a French game developer.
• The monthly active users of local life recovered in China in June and July.
• NetEase will close Music Street, the social networking-oriented karaoke app.

• As one of the few companies in the world that could provide one-stop solutions including all major medical devices used in non-vascular interventional surgery, Innovex’s outlook is promising.
• About 30% overseas revenue indicates that the Company’s internationalization is on track, which could help to “hedge” negative domestic policy risks.
• In terms of the valuation, Innovex’s valuation should be higher than Scivita but lower than Aohua. However, Innovex has the potential to surpass Aohua in the future.

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
• Yuexiu Property

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
• Yuexiu Property