Daily Brief China: Li Auto, CALB, Fosun Tourism, Hygeia Healthcare Group, ABM Investama and more

• Currently at 69 index members, we just could reach 80 constituents at the December rebalance. That would leave the index committee to plan the move to 100 constituents in 2023.
• We list 10 potential inclusions to the index in December. One-way turnover is just under 4% and inclusions of all stocks will increase index market cap coverage significantly.
• Shorts are more than 3% of free float on five of the potential inclusions and these stocks could see some short covering ahead of the announcement of the changes.

• CALB raised around US$1.2bn in its Hong Kong IPO, after pricing its offering at the low-end.
• CALB undertakes design, R&D, production and sales of EV batteries and Energy Storage Systems (ESS) products.
• In this note, we will talk about the demand for the deal and other trading dynamics.

• Dragged by partial disposal by its parent, Fosun Tourism (1992 HK) had a bad month in Sep and its share price is now back to early-2020 level. 
• 1H22 has seen good loss reduction and 2H22 outlook is on positive trend. Booking momentum at Club Med is encouraging and operational capacity will return to the 2H19 level.
• Atlantis Sanya has experienced gradual recovery in the Golden Week after the large-scale lockdown of Sanya in Aug. Completion of Lijiang and Taicang FOLIDAY Town will boost FY23.

• Hygeia had good performance in 2022H1,mainly because its business layout is mostly in lower-tier cities and its medical services belong to rigid demand. So, the impact of pandemic was limited.
• Hygeia is better than Topchoice and Aier Eye Hospital. The business model of specialized hospital is better than that of general hospital. Among for-profit hospitals, we are bullish on Hygeia.
• We think Hygeia will keep strong growth momentum in the future due to high demand. But pandemic and policy risk would weigh on valuations/sustainable bullish sentiment. Short-term trades are recommended.

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.