Daily Brief China: Alibaba Group, Deewin Tianxia, Vedanta Resources and more

• According to Reuters, Alibaba Group (9988 HK)’s supermarket chain Freshippo is seeking to raise around $400-500m from a fresh funding round which values the loss making company at $6.0bn.
• The fact that Alibaba is willing to dilute ownership at a significant discount to its expected valuation is an additional sign that Alibaba could be running into some financial difficulties.
• Having slashed spending budgets of its smaller investments and more down rounds expected in ventures that are considered too big to fail, we anticipate a challenging time ahead.   

• Deewin Tianxia (2418 HK) raised around US$123m in its Hong Kong IPO.
• DT’s subscription rates had been lackluster with weak coverage on the institutional tranche and the retail portion being undersubscribed.
• Given its smaller size, in our view, the firm should come in at a discount to its peer average.

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.

• Vedanta Resources
• Yankuang Energy Group