Daily Brief China: China Traditional Chinese Medicine, Haitong Securities Co Ltd (H), UMP Healthcare, BYD, Tasly Pharmaceutical Group, BenQ BM Holding Cayman Corp., JD Industrial Technology , Horizon Robotics, Genting Bhd and more

• China Traditional Chinese Medicine (570 HK)’s monthly update notes that the consortium has secured SAMR approval and made progress in obtaining the other regulatory approvals. 
• As expected, the precondition will not be satisfied before the 18 October long stop date. Unexpectedly, whether the consortium members will consent to the extension remains uncertain.
• The extension will be forthcoming as the delay is procedural, there is a reputational risk from a deal break, the time investment is significant, and the warning was legally required.

• Back in March, the CSRC said it aimed to “form two to three investment banks and institutions with international competitiveness and market leadership by 2035″.
• Last week’s announced merger between China’s leading state-backed brokerages, Guotai Junan Securities (2611 HK) and Haitong (6837 HK), is a move in that direction. Expect more scrip mergers to follow. 
• There have also been some media reports that the GJS/Haitong terms disadvantage holders of other Hong Kong broker stocks if potentially acquired in a merger. It’s not quite that simple. 

For our next Corporate Webinar, we are glad to welcome UMP Healthcare’s Chief Financial Officer and Company Secretary, Patrick Cheung. 

In the upcoming webinar, Patrick will share a short company presentation after which, he will engage in a fireside chat with Smartkarma Insight Provider, Sameer Taneja. The Corporate Webinar will include a live Q&A session.

The webinar will be hosted on Wednesday, 23 October 2024, 15:00 SGT/HKT.

About UMP Healthcare

• China Traditional Chinese Medicine (570 HK) (TCM) will fall today. Perhaps a lot.
• With two days left on the clock to secure the pre-conditions (18th October), the Offeror said “it remains uncertain” whether it can secure an extension from the investor group.
• Such wording could be viewed as boilerplate SFC legalise. I would argue the use of “uncertain” is superfluous, unhelpful, and for investors, downright worrying. 

• BYD’s deliveries growth accelerated to 36% YoY in Aug and 46% YoY Sep.
• The whole domestic NEV (New Energy vehicle) market has been accelerating for for the entire third quarter.
• We believe the EU and the US market are not concerns, as both domestic and other emerging markets are promising.

• Since Tasly’s performance growth has long stagnated and Yan Kaijing has no better way to turn the situation around, selling Tasly to SOE and cashing out becomes a good choice.
• Upon completion of all approvals (e.g. the SASAC, SAMR, shareholders’ meeting of CR Sanjiu, etc.), the deal aims to be completed in 25Q1. We think the deal will get up.
• Tasly’s share price should be at least higher than RMB14.85/share based on the cash transfer price. Its P/E would reach 30 in the future after the integration with CR Sanjiu.

• BenQ BM Holding Cayman Corp. (BBHC HK) is looking to raise at least $US100m in its upcoming Hong Kong IPO. 
• It is a leading private for-profit general hospital group in mainland China, operating two general hospitals – Nanjing BenQ Hospital and Suzhou BenQ Hospital.
• In this note, we look at the firm’s past performance.

• JD Industrial Technology is looking to raise about US$1bn in its upcoming HK IPO.
• JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
• We have looked at the company background and provided our initial thoughts on valuations in our previous notes. In this note, we will talk about the refiling updates.

• Horizon Robotics is looking to raise up to US$696m in its Hong Kong IPO. 
• Horizon Robotics (HR) is a provider of advanced driver assistance systems (ADAS) and autonomous driving (AD) solutions for passenger vehicles, empowered by its proprietary software and hardware technologies.
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

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.

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