Daily Brief China: Jiangsu Hoperun Software, Bossini International Holdings, China Resources Beverage, Sinopep-Allsino Bio Pharmaceutical, Horizon Robotics, Baimtec Material , Shanghai Henlius Biotech , China Vanke and more

• 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 have presented our updated rankings for Potential ADDs and DELs for the upcoming index rebal event in December 2024.

• Bossini International Holdings (592 HK), a casual apparel play, is currently suspended pursuant to the Takeovers Code. As is Viva Goods (933 HK), Bossini’s largest shareholder, with 62.91%.
• Former Olympic gymnast Li Ning holds 68.96% of Viva Goods. Viva Goods also holds a 10.37% stake in Li Ning (2331 HK).
• The double suspension is probably a pre-cursor to Viva Goods tabling a delisting Offer for Bossini. 

• China Resources Beverage (CRB HK)  is looking to raise up to US$650m in its Hong Kong IPO. 
• China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
• We have looked at the company’s past performance in our previous notes. In this note, we will talk about the IPO valuations.

• CSI Medical Service represents the top 50 largest and most-liquid stocks involved in medical devices, medical care, medical informatization and other medical theme from the Shanghai, Shenzhen and Beijing Exchanges.
• In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in December 2024.
• We expect up to five ADDs and five DELs for the CSI Medical Service index during this index rebal event based on the latest available data.

• China Resources Beverage (CRB HK), China’s largest purified drinking water company, has launched its HKEx IPO to raise up to US$650 million.
• We previously discussed the IPO in CR Beverage IPO: The Bull Case, CR Beverage IPO: The Bear Case and CR Beverage IPO: The Investment Case.
• Our valuation analysis suggests that CR Beverage is attractively valued at the IPO price range. Therefore, we would participate in the IPO.

• CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500.
• In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in December 2024.
• We currently expect 16 ADDs/DELs for CSI 300 and 50 ADDs/DELs for CSI 500. Some of these names are different from what we had in our September 2024 insight.

• Horizon Robotics (1395186D CH) is offering 1.355bn shares in its IPO at a price range of HK$3.73-3.99/share. With the overallotment option, the IPO could raise up to HK$6.2bn (US$801m).
• Cornerstone investors will take up a third of the offer. Those shares will be locked up for 6 months and will significantly reduce the free float of the stock.
• Index inclusions will commence with the HSCI in March 2025 – however, as a stock with Weighted Voting Rights, inclusion in Southbound Stock Connect will only take place in May.

• With 95% of the review period now complete, we forecast 50 changes (the maximum permitted) for the CSI Smallcap 500 Index at the close on 13 December.
• We estimate a one-way turnover of 11% at the rebalance resulting in a one-way trade of CNY17.56bn (US$2.48bn). The Information Technology and HealthCare sectors gain at the expense of Industrials.
• After drifting lower over the last couple of months, the forecast adds have outperformed the forecast deletes over the last couple of weeks. There should be more to go here.

• Fosun has a clear plan for Henlius’ future development. This seems to hint at “an internal consensus” – Fosun seems to have persuaded major shareholders to vote for the privatization.
• The privatization of Henlius will make positive contributions to Fosun Pharma’s revenue/profit, but this impact is limited.  What Fosun really wants is to obtain huge investment income from another spin-off/re-listed.
• For investors who are interested in the Share Alternative, they’re advised to figure out whether the Rollover Entities/Securities is relevant to the new entity.If not, the Share Alternative is worthless.

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.

• China Vanke
• Reliance Industries
• West China Cement