Daily Brief China: Great Eagle Holdings, JD Property, Tencent, Guangzhou R&F Properties and more

• Ever since Lo Ying-shek, the founder of Great Eagle (41 HK) passed away in 2006, as invariably happens, family relations deteriorated as the children sought to assert control over GE.
• Matters reached a crescendo when Lo’s wife brought legal action against HSBC International Trustee in 2016 as executor of a large % of shares into GE. 
• That plaintiff action failed, as did subsequent appeals. The latest battle centers on a judge’s ruling which extensively incorporated (read copied) the defendant’s submission in his final decision. 

• JD Property (JDP HK) is looking to raise about US$1bn in its upcoming Hong Kong IPO.
• JD Property (JDP) develops and manages modern infrastructure, consisting primarily of logistics parks, as well as business parks and other assets in China and in Asia.
• We had looked at the company’s past performance and undertaken a peer comparison in our earlier notes, in this note we will discuss our initial thoughts on valuation. 

• JD Property (JDP HK)/JDP, a leading modern infrastructure provider in Asia, has filed for a US$1 billion HKEx IPO. JD.com Inc (ADR) (JD US) owns a 74.96% stake.
• In JD Property IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The key elements of the bear case rest on the low Fund AUM mix, declining fee rate, EBITDA flattered by FV changes, EBITDA lagging revenue growth, and high cash burn.

• Recently, there has been an increase in discussions about Wechat Video Accounts (known as “ShiPinHao”) on local Chinese media and social networks. 
• Overall, merchants acknowledge the potential of Video Accounts and are willing to give it a try, but the results vary significantly among different businesses.
• We expect that Wechat Video Account will remain to have a high speed growth in the next several quarters, but the market expectation is also high.

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.

• Guangzhou R&F Properties