Daily Brief China: Haitong Securities Co Ltd (H), Midea Group, China Conch Venture Holdings, SGX Rubber Future TSR20, Greentown China and more

• Guotai Junan Securities (2611 HK) and Haitong Securities Co Ltd (H) (6837 HK) all-scrip merger is set at an exchange ratio of 0.62x. 
• The merger is conditional on the GJTA/Haitong shareholder vote, which is low risk. Regulatory approvals are a formality as they involve two entities with SOE backgrounds. 
• The share exchange ratio is attractive compared to historical price ratios and precedent transactions. The recent material re-rating of peers is irrelevant to the vote as the offer is all-scrip. 

• There were only 13 new listings on the Main Board of the HKEX (388 HK) in the third quarter of the year.
• Of those stocks, we only see Midea Group (300 HK) having a chance of being added to the HSCI in December.
• Midea Group (300 HK) should be added to Southbound Stock Connect next week after the price stabilisation period has ended.

• China Conch Venture (586 HK) shares are down 20% the past two days. Anhui Conch Cement (600585 CH) is down ~8% today. CCV’s implied stub is toward the historical low-end.
• Preceding my comments on China Conch/Anhui are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Huaqing Petroleum to set up plant worth US$1.39 billion in Hunan
• Linglong commences serial production at its Serbia plant 
• ZC Rubber Group cements network for supply to Nordic countries

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.

• Pt Cikarang Listrindo Tbk
• Greentown China