Daily Brief China: Horizon Construction Development, JD.com Inc (ADR), JD Health, China SCE, Luckin Coffee, Trip.com and more

• Horizon Construction Development (1887128D HK)/HCD, a subsidiary of Far East Horizon (3360 HK), has launched its HKEx listing at HK$4.52-4.80 per share to raise up to US$223 million.
• We previously discussed the IPO in Horizon Construction Development IPO: The Bull Case and Horizon Construction Development IPO: The Bear Case. 
• Our valuation analysis suggests that HCD is fully priced at the IPO price range. Therefore, we are inclined to pass on the IPO. 

• JD reported 1Q23 revenue in-line vs. cons., while non-GAAP net income beat cons and our est. 99% and 74%, respectively.   
• It’s early to say whether JD is getting out of the puddle, as (1) revenue grew just 1.4% YoY in 1Q23,  (2) the effect of its management change remains uncertain.
• We maintain SELL, but raise JD’s 2023 non-GAAP net margin from prior 3.2% to 3.34%, and raise TP to US$ 30.  

• JDHealth (JDH) reported C1Q23 top line and non-IFRS operating profit 56% and 78% of our C1H23 estimates. 
• We now take a more positive view on JDH’s ability to at manage the issue at certain periods and certain areas;
• We raise TP from HK$44 to HK$57 and rating to BUY. Possible risks include renewed margin pressure from prescription drugs

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Softbank Group
2. Wynn Macau Ltd
3. Central China Real Estate
4. Seazen (Formerly Future Land)
5. Agile Property Holdings

and more…

• Cotti Coffee has become a head-to-head competitor of Mixue’s Lucky Cup, and to a lesser degree, Luckin. 
• But what is behind Cotti’s agenda, in our view, is its founder Charles Lu’s aspiration to return to Luckin;
• The biggest obstacle for Charles to repeat the playbook of Steve Jobs is Chinese security regulator’s refusal, so far, to allow franchised chain to list

• There are no constituent changes for the Hang Seng Tech Index (HSTECH INDEX) in June but there are some free float changes and a bunch of capping changes.
• Estimated one-way turnover is 3.2% leading to a one-way trade of HK$3bn (US$384m). There are 3 stocks with over 1 day of ADV to trade.
• Trip.com (9961 HK) has over 1x ADV to buy from Hang Seng Tech Index (HSTECH) trackers. The stock is also an add to the Hong Kong Hang Seng Index (HSI).