Daily Brief China: Haidilao, China Traditional Chinese Medicine, Hang Seng China Enterprises Index, Central China Real Estate and more

• Haidilao (6862 HK) intends to spin-off its 90% holding in Super Hi International Holding (SHI HK) with an ex-date of 16 December.
• Super Hi International Holding (SHI HK) will be deleted from the Hong Kong Hang Seng Index and Hang Seng China Enterprises Index at the close on listing day.
• There could be nationality changes and selling from MSCI and FTSE trackers as well, though the timing is uncertain at this point.

• China TCM’s privatization rumor led to large fluctuation of its share price last week. Since there have been related rumors twice, this may not be completely over yet.
• China TCM’s performance may not rebound quickly due to short-term challenges in concentrated TCM granules business. 
• However, the decline in the revenue side could be a temporary phenomenon. After a difficult period, if the Company’s business could recover as expected, share price would rebound. 

• Our long in H shares is looking stretched and we need to fine tune an exit strategy with counter balance pivots. HSI is the short on strength at trendline.
• A50 13,400 intermediate resistance stands out to cap near term strength and USD/CNH 9.0/01 is our USD buy support that aligns with an A50 top.
• Consensus is now bullish China (wrinkles to work through) as we face a more uncertain global cycle in Q1. HSI faces wedge and trendline resistance!

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.

• Central China Securities
• Kawasan Industri Jababeka
• Sunac China Holdings