In today’s briefing:
- IRC Limited (1029 HK): Closing Date Extended as the Risk/Reward Turns Unattractive
- Quiddity Leaderboard SSE50/180 Jun 24: US$1.3bn One-Way; Some New Names in the Expected Changes List
- China Consumption Weekly (15 Jan 2024): Tencent, Douyin, Alibaba, JD.com, Dada, Meituan
- Mainland Connect NORTHBOUND Flows (To 12 Jan 2024): Renewable Energy-Related Names Sold
- Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – January 2024
- HK Connect SOUTHBOUND Flows (To 12 Jan 2024); High Div SOEs Still the Biggest Buys
- Wuxi Biologics (2269.HK) – Dramatic Changes in Management Forecasts Fail to Bring Back Confidence
IRC Limited (1029 HK): Closing Date Extended as the Risk/Reward Turns Unattractive
- Irc Ltd (1029 HK) notes that the offeror (Nikolai Levitskii) and acceptances reached 35.77% at the first closing date, materially short of the 50% minimum acceptance condition.
- The offeror has extended the closing date by 39 days (30 business days) to 20 February, the last day the offer can become or be declared unconditional.
- The rise in iron ore prices and a light offer pose challenges. The risk/reward profile is unfavourable as the upside (5.4% spread) outweighs the downside (20.5% to the undistributed price).
Quiddity Leaderboard SSE50/180 Jun 24: US$1.3bn One-Way; Some New Names in the Expected Changes List
- SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
- In this insight, we take a look at our expectations for potential index changes for SSE 50 and SSE 180 during the June 2024 index rebal event.
- I continue to expect 5 changes for SSE 50 and 18 changes for SSE 180 but some of the names have changed since my last insight.
China Consumption Weekly (15 Jan 2024): Tencent, Douyin, Alibaba, JD.com, Dada, Meituan
- Tencent will allow Douyin to broadcast the game Honor of Kings after a four-year ban.
- Dada’s stock plunged after the company released its suspicious auditing result.
- Alibaba’s mobile office app, Dingding, has accumulated 120,000 paying users.
Mainland Connect NORTHBOUND Flows (To 12 Jan 2024): Renewable Energy-Related Names Sold
- The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
- Last week saw NORTHBOUND net SELL RMB 2.4bn of A-shares on decent average activity.
- Renewables and Kweichow Moutai (600519 CH) were the big net sells on the week.
Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – January 2024
- We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
- Our top picks: Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and The Keepers Holdings (KEEPR PM).
- We recently added Plover Bay Technologies (1523 HK) to our list of companies under coverage. We believe there are some excellent near-term catalysts in the name.
HK Connect SOUTHBOUND Flows (To 12 Jan 2024); High Div SOEs Still the Biggest Buys
- SOUTHBOUND flows showing momentum tendencies this past week on a single-stock basis, still.
- SOUTHBOUND saw HK$6.8bn of net OUT-flows in the week to 12 Jan 2024. Total flows were HK$118bn.
- SOUTHBOUND saw large net selling of ETFs (unwinding Week 1) and large net buying of high-div SOEs like CNOOC, China Mobile/Telecom/Unicom, and coal names.
Wuxi Biologics (2269.HK) – Dramatic Changes in Management Forecasts Fail to Bring Back Confidence
- WuXi Bio’s optimism about new orders failed to generated expected surge in its stock price. Many investors raised great doubts about the credibility and professionalism in communication of WuXi Bio.
- It’s easy/cost-effective for WuXi Bio to “adjust” order number. However, it’s more difficult to inflate revenue/cash flow. We have to wait for future financial results to know the real situation.
- XBI is essentially “a bond”.Recent surge of XBI is driven by the expectations of Fed’s rate cut + US soft landing, rather than virtual improvement of external environment.Much remains unclear.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
