Daily Brief China: Hong Kong Television Network, PDD Holdings, Li Auto , Kuaishou Technology, Contemporary Amperex Technology (CATL), Shanghai Cell Therapy Group, SJM Holdings and more

• Hong Kong Television Network (1137 HK) has launched a share buyback to acquire a maximum of 100.0m shares (11.25% of shares) at HK$2.15, a 20.8% premium to the undisturbed price.
• The offer is conditional on approval by the requisite majority of shareholders and the approval of the whitewash waiver. There is no minimum acceptance condition, and the offer price is final.
• The offer is unattractive and is an inefficient use of cash to increase the co-founders’ grip on the shares. Nevertheless, the EGM vote is likely to get up.   

• Total revenue rose by 131% in 1Q24 with advertising up by 56% YoY and commission up by 327% YoY.
• In 1Q24, both the operating profit and the operating margin reached record highs.
• The historical price / sales ratios suggests a significant upside. Buy.

• LI Auto’s decision to push out its BEV launch to 2025 is a delay of multi-faces at a time when China’s EV market is chaotically.
• We keep rating @BUY because LI still possesses the SUV niche, enjoys a healthy margin and have ample cash. 
• We cut TP from US$40 to US$25 and maintain BUY.

• In 1Q24, revenue grew by 17% YoY and e-commerce GMV grew by 28% YoY.
• Both the operating margin and the operating profit reached historical highs in 1Q24.
• We set an upside of 47% and the price target at HK$86.00. Buy.

• Making EV itself doesn’t make money, which is why independents like Nio and XPeng are thinking alternative ways to breakeven;
• Tesla envisioned to make money through scale, of which BYD bettered. Tesla also envisioned to make money from autonomous driving (ADS);
• Nio plans to sell its battery swapping service while XPeng is selling ADS to Volkswagen. Both are experiments aiming at breakeven. Both also have new models to launch.

• The biggest problem of cell therapy in China is the uncertain prospect of commercialization. Medical practitioners also have reservations regarding the usefulness of cryopreserved cells for clinical application.
• Shanghai Cell Therapy could be in a long-term loss making state, and both of its R&D and commercialization capabilities need to be verified. Then, how would investors obtain expected returns?
• Post-Investment valuation already reached above RMB7.1 billion after Series D financing. However, market value of comparable companies are quite low, which makes us worry about stock price performance after IPO.

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.

• SJM Holdings
• Softbank Group
• Yankuang Energy Group