Daily Brief China: Leapmotor, Bilibili, Onewo, China Datang Corp Renewable Power, CNY, Joinn Laboratories (H), CIFI Holdings and more

• Leapmotor (9863 HK) raised around US$800m in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
• As of end Jun 22, it had delivered a total of 104,829 cars with most of its sales coming from its mini units, T03.
• In this note, we will talk about the demand for the deal and other trading dynamics.

• Earlier today, Bilibili (9626 HK) announced the voluntary conversion of its Secondary Listing on the HKEX (388 HK) to a Dual Primary Listing effective 3 October.
• Though the timing is tricky, this could result in the stock not being deleted from the Hang Seng China Enterprises Index (HSCEI INDEX) at the December rebalance.
• This could also lead to inflows at the December rebalance from Hang Seng China Enterprises Index (HSCEI INDEX) and Hang Seng Tech Index (HSTECH INDEX) trackers.

• Onewo (2602 HK) (OST) raised around US$733m in its Hong Kong IPO. OST is a property management service provider primarily owned by China Vanke Co Ltd (H) (2202 HK) . 
• As per Frost & Sullivan, amongst the residential community service providers in China, OST ranked first. It also ranked first in the commercial space integrated services market in China.
• In this note, we will talk about the demand for the deal and other trading dynamics.

• Leapmotor (9863 HK) priced its H Share at HK$48.00 per share to raise net proceeds of HK$6,057.4 million (US$772 million). The H Share will start trading tomorrow.
• The H Shares of peers posted no first-day gains and are currently below the listing prices. Market sentiment on peers has remained weak since the release of the prospectus.
• Leapmotor, at best, should trade in line with median peer multiples. Leapmotor is fairly valued at the IPO price. We continue to remain on the sidelines.

• Onewo (2602 HK) priced its H Share at HK$49.35 per share to raise net proceeds of HK$5.6 billion (US$713 million). The H Share will start trading tomorrow.
• Notwithstanding the industry headwinds, the H Shares of peers with financially sound parentco backgrounds are trading above the listing prices.
• Despite peer multiple derating, the IPO price remains attractive compared to peers with financially sound parentco backgrounds. 

• Leapmotor (9863 HK) has priced its IPO at HK$48 per share, at the lower end of the indicative IPO price range of HK$48-62 per share. 
• At the above price, the company raised net proceeds of approx. HK$6,057.4m at a market capitalisation of HK$54.9bn and a post-money EV of HK$45.9bn.
• The HK offering was undersubscribed while the international offering was initially oversubscribed by 2.33x and the unsubscribed portion of the HK offering was later reallocated to international offering.

• Low valuation against peers in China albeit China Datang Corp Renewable Power (1798 HK) is one of the few pure-play wind farm operators in HK. 
• Its free cash flow reached its highest in more than 10 years. 
• The challenging equity market makes China Datang Renewable Power looks even more attractive.

• The monkeys have become Joinn Laboratories (H) (6127 HK)’s important profit growth point based on the logic chain of “monkey supply shortage – monkey price rise – Joinn’s performance increase”. 
• Faced with doubts about the future prosperity of CXO, we don’t think Joinn is immune as a part of this industrial chain. Joinn is hard to achieve the V-shaped rebound.
• Valuations are hard to increase by when the industry is very mature.For investment logic, my favorite is the industry beta, followed by industry beta+alpha. The last is low P/E ratio.

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.

• AAC Technologies Holdings
• CIFI Holdings