Daily Brief China: Koolearn, Tian An China Investment, Mobvoi, JD Health, Hopson Development, Dalian Wanda Commercial Properties and more

• The June rebalance of the KraneShares CSI China Internet ETF (KWEB US) will take place at the close of trading today.
• There are a couple of deletions and one inclusion. Plus there will be capping changes on the other stocks, but the impact of those changes is not large.
• The stocks have already been moving in the right direction during the day and the pre-positions could be flipped to the ETF at the close.

• Allied (373 HK) took Allied Properties (H.K.) (56 HK) private in 2020, followed by SHK Hong Kong Industries (666 HK) in 2021. Now it’s Tian An China (28 HK)‘s turn.
• Preceding my comments on Tian An and AGL are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Google-backed Chinese artificial intelligence company Mobvoi Inc. filed Tuesday for an initial public offering on the Hong Kong Stock Exchange.
• The Beijing-based startup, valued at $756 million in its last round of fundraising three years ago, didn’t disclose the size of the IPO.
• Bloomberg reported that the company aims to raise $200 million to $300 million, citing people familiar with the matter.

• In May, JD Health made a voluntary announcement that the company has made operating income of RMB795.4m (5.7% of revenues) in 1Q2023 vs RMB61.6m (0.7% of revenues) reported in 1Q2022.
• JD Health’s share price been down more than 25% despite the company announcing strong 1Q2023 results, as the market has become concerned over the company’s ability to sustain its profits.
• Our quantamental analysis proves that JD Health may not be able to generate OPM in excess of 2-3% as there is very little room for GPM to improve.

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. China SCE
2. China Hongqiao
3. Times China
4. Greentown China
5. Seazen (Formerly Future Land)

and more…

• Dalian Wanda Group Co.’s property management unit expects to scrape up enough cash to pay off a 2 billion yuan ($281 million) note due this Saturday, the company said.
• But with 8.9 billion yuan of domestic notes and offshore bond due within two months, Dalian still needs to dump some of its shopping malls and hotels.
• The troubled property-to-entertainment conglomerate was reported to be considering such moves earlier this week.