Daily Brief China: Greatview Aseptic Packaging, Cosco Shipping Energy Transportation Co. Ltd. (H), Changchun BCHT Biotechnology and more

In today’s briefing:

Greatview Aseptic (468 HK): Rival Purchases And Grandstanding
COSCO Shipping Energy (1138 HK): Beware of Momentum Peaking
Pre-IPO Changchun BCHT Biotechnology – The Risk of Single-Product Dependence and Uncertain Outlook

Greatview Aseptic (468 HK): Rival Purchases And Grandstanding

After Greatview Aseptic (468 HK) was suspended on the 30 January, it emerged that Shandong Xinjufeng (301296 CH) had entered a SPA to acquire Jardine Matheson (JM SP)‘s 28.22% stake
Greatview has now confirmed the transaction. Shares were supposed to resume trading this afternoon but were immediately suspended again.
Importantly, Inner Mongolia Yili Industrial Group (A) (600887 CH), Xinjufeng’s largest customer is a main competitor of Greatview’s largest customer. That may be an untenable situation, according to the announcement.

Cosco Shipping Energy Transportation (1138 HK) rallied 12.5% in the last two trading days after issuing a FY22 positive profit alert, but we are concerned that momentum is peaking.
Its P/B of 0.92x is 4SD above average since 2016, more than sufficient to reflect rebound in FY23-24F profitability. Meanwhile, VLCC rate has plunged 80% in the last 3 months.
We believe CSET is already midway in the upcycle which normally lasts for 2-3 years. With high 4Q22 profit difficult to sustain for long, there is downside risk on earnings.

Single product structure is the biggest risk of BCHT. Varicella vaccine is hard to drive BCHT’s performance growth in the future and the sales of influenza vaccine are not ideal.
There’re concerns about the protection rate of attenuated zoster vaccine,which won’t be officially sold until 2023H2/2024. It’s not sure whether the situation can be reversed by attenuated zoster vaccine alone.
BCHT is inferior to CanSino in terms of pipeline quality and R&D capability. The investment value of BCHT is not high. We think its valuation should be lower than CanSino.

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