Daily Brief China: BYD Co Ltd, BYD, Guoquan Food (Shanghai), China Shineway Pharmaceutical, Country Garden Holdings Co, T.S. Lines and more

• China granted a six-month grace period for carmakers and dealers to sell off as many as 2 million new vehicles that will be out of compliance with new emission standards taking effect July 1.
• The move is intended to ease pressure on the auto market amid slowing sales and a brutal price war.
• The government said it will allow sales of vehicles produced under the old pollution standards to continue until Dec. 31, though automakers will have to apply more stringent requirements to newly built autos starting July 1.

• Chinese electric-car giant BYD Co. got a green light from regulators to take over a bankrupt online insurance unit of the scandal-plagued conglomerate Tomorrow Holding Co. Ltd. with plans to turn it into an auto insurance provider.
• The China Banking and Insurance Regulatory Commission (CBIRC) said Tuesday that it approved BYD’s 100% acquisition of E An Property & Casualty Insurance Co. Ltd.
• Chinese authorities seized the company three years ago.

• Guoquan Food (Shanghai) (1786512D CH) is looking to raise about US$500m in its upcoming Hong Kong IPO.
• Guoquan Food (Shanghai) is a home meal solutions provider in China.
• Offering a wide variety of home meal solutions products under its Guoquan Shihui (鍋圈食匯) brand, the firm had a total of 755 SKUs as of Dec 22. 

• Shineway’s 23Q1 performance growth exceeded expectations, mainly driven by TCM formula granules products and injection products. A surge of COVID infection rate in China since 22Q4 was an important reason. 
• Based on data, revenue proportion of COVID-19 related products is not low. So, related sales growth in following quarters this year would decrease as the dividend period of pandemic ends.  
• As the growth of TCM formula granules is expected to offset the slowdown of COVID-19 TCM products, Shineway’s overall revenue growth would still be strong in 2023. Valuation isn’t cheap.

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.

• Central China Securities
• Country Garden Holdings Co
• Wynn Macau Ltd

• T.S. Lines (TSL HK) is looking to raise about US$300m in its upcoming Hong Kong IPO.
• T.S. Lines (TSL) is a container shipping firm primarily operating in the Asia Pacific (APAC) region.
• As of Dec 22, its container shipping network covers a total of 24 countries and regions, 63 major ports and 42 services globally.