Daily Brief China: China East Education , Yuexiu Property , Hutchmed China Ltd, S.F. Holding and more

• China East Education (667 HK) is interesting as it is probably the only education company with no debt. Net cash amounted to Rmb2.1bn, or 42% of its market capitalisation. 
• Earnings have bottomed out and the marginal YoY decline in 1H23 is due to upfront costs for staff recruitment. Its vocational education focus also faces fewer regulatory risks.
• We consider it a potential privatisation candidate at 0.8x P/B. Its major shareholders owned 75% of the company, leaving a free float of less than HK$1.4bn.

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.

• Yuexiu Property

• The market seems “not excited” with fruquintinib’s FDA approval.We analyzed the potential reasons behind.Beyond boosting market sentiment when license-out deal is announced initially,its practical impact on valuation could be limited.
• HUTCHMED’s financial performance is good. The deal with Takeda helps to relieve cash-flow pressure. We think HUTCHMED is a relatively safe bet for investors as eventual breakeven is drawing near.
• If based on conservative calculation, market value of about US$1,455-2,055 million is a good place to long.When market value is higher than US$3,500 million, it’s time to consider taking profits.

• In November, domestic parcel volume growth accelerated vs recent months
• International remains very strong; STO keeps taking share from Yunda
• Avoid domestic ‘ground’ segment, seek international growth in SF, CaiNiao