Daily Brief China: Greatview Aseptic Packaging, Meituan, PDD Holdings , Futu Holdings Ltd, Sunho Biologics, Powerlong Real Estate Holdings and more

• Back on the 27 January 2023, Jardine Matheson (JM SP) entered an agreement with Shandong Xinjufeng (301296 CH) (XJF) to sell its 28.22% stake in GAPack (468 HK). 
• That sale completed in September.  Last week, XJF requisitioned an EGM to consider appointing five new (& friendly) directors, all-but taking control of the board. 
• CEO and founder Jeff Bi holds 9.65%. The question is: what are his options?

• The stock has been declining for about three years and plummeted after the 3Q23 results.
• However, we believe MT and its corporate clients have been recovering and MT’s profits will rise by 129% in 2024.
• We set an upside of 132% and a price target of HK$209 for 2024. Buy.

• Stock rally on strong revenue growth suggests TEMU will be at center stage of the investment thesis for PDD down the road. 
• Besides soaring GMV, TEMU achieved blowout performance likely due to much higher-than-expected take-rate and disciplined marketing, resulting in narrower-than-expected losses.
• We expect the company’s growth will even accelerate in 4Q23 and generate adjusted net profit of US$12 bn for FY24, with a target market cap of US$240 bn (20xPE).

• We think FUTU is stepping into a stagnant phase in 2024. Japan is not a game changer.
• Client asset inflow from overseas is not meaningful, and growth from mainland is frozen by regulation.
• We downgrade the stock into SELL rating and cut TP to US$46/ADS, mainly due to slow progress in overseas expansion and difficulty in monetization.

• Sunho Biologics, a China-based clinical-stage biotechnology company, plans to raise up to US$100m via a Hong Kong listing.
• In this note, we examine the company’s three core products, namely IAP0971, IAE0972, and IAH0968, which target malignancies.
• A large part of the company’s pipeline is testing the unproven targets. We also think the management and pre-IPO investors are of mediocre quality.

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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