Daily Brief China: Hygeia Healthcare Group, ESR Group , NIO , Samson Holding, Dbg Technology, Distinct Healthcare Holdings, Xiaomi Corp and more

• There are a bunch of stocks listed in Hong Kong that have underperformed the HSCEI INDEX and their peers and could be deleted from global passive portfolios in August.
• The deletion from passive portfolios will lead to a liquidity event at the end of August where passive trackers will need to sell multiple days of ADV.
• There has been a big jump in cumulative excess volume in some stocks and the A/H premium on a lot of the names has jumped over the last few months.

• Andrew Walker hosts the podcast and introduces John Haskell, CIO at Ulta Global Management
• Ulta Global focuses on international public real estate investing, particularly in emerging markets
• Despite negative perception and underperformance in emerging markets, there are opportunities for value investing in international real estate

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• Chinese auto brands commands 61% market share in May 2024, up from 7% in 2021. Its premium car market share has also risen to 25% from nothing  
• The transition towards EV, swift adoption of technology and sleek designs has made traditional car makers (including luxury marquees) look antiquated and out of fashion compared to the Chinese brands  
• Premium Chinese automakers LiAuto and NIO will benefit over long-term, whilst the foreign dealers and local-foreign JV OEMs will suffer over the long term. 

• Furniture trader Samson Holding (531 HK) has announced a Scheme from Shan Huei Kuo, Samson’s Chairman. 
• The Cancellation price is $0.48, a 50% to last close. The premium is more pronounced if going back a month. The price is final.
• This looks done. But Samson is an illiquid micro cap.

• The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
• The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
• In this insight, we take a look at our latest rankings for ADDs and DELs for the upcoming index rebal event in December 2024.

• Due to industry characteristics, it would be difficult for Distinct Healthcare to scale up. The Company is more of “a supplementary role” in the entire medical service system in China.
• Profit margin is not satisfactory and cost side is also difficult to reduce. Even if Distinct Healthcare successfully turns losses into profits, it’s hard to generate good returns for investors.
• Post-Money valuation was US$510 million after Series E financing. For a company that would encounter bottlenecks in both revenue and profit growth, it would be difficult to achieve high valuation.

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.

• SM Investments
• Xiaomi Corp