In today’s briefing:
- HK REITs Re-Rate On Southbound Inclusion
- HSCI Index Rebalance Preview: Robosense (2498 HK) Could Be Added in June
- Luk Fook 590.HK – Losing Its Shine?
- CIMC Enric (3899 HK): Robust Order Backlog Outshined Lower 1Q24 Revenue
- Pre-IPO Sunho Biologics (PHIP Updates) – Some Points Worth the Attention
HK REITs Re-Rate On Southbound Inclusion
- In RMB Dual Counter Trading Is Coming – This Changes AH Relationships, Travis Lundy discussed the forthcoming inclusion of RMB dual counters in the Hong Kong Southbound Connect programs.
- This is but one of the five capital market cooperation measures announced by the CSRC last Friday.
- The other four measures include ETFs, improving mutual recognition of funds, increasing China IPOs in Hong Kong, and the inclusion of REITs. This insight discusses the latter.
HSCI Index Rebalance Preview: Robosense (2498 HK) Could Be Added in June
- There were only 12 new listings on the Main Board of the HKEX (388 HK) in the first quarter of the year. More than half the listings were in March.
- Of those stocks, we only see Robosense Technology (2498 HK) having a chance of being added to the HSCI in June and then into Southbound Stock Connect.
- There is a big lock-up expiry for Robosense Technology (2498 HK) in July and that should keep the stock under pressure.
Luk Fook 590.HK – Losing Its Shine?
- March Same-Store sales in China disappoint mainly due to diamond jewellery demand
- Overall, gold demand in China continues to rise both in the retail and the official sector
- Visitor arrivals to Hong Kong pick up but are still ~40% below pre-Covid levels.
CIMC Enric (3899 HK): Robust Order Backlog Outshined Lower 1Q24 Revenue
- Although the 1Q24 revenue of CIMC Enric Holdings (3899 HK) has edged down by 6.8%, this is not a concern as its order backlog suggested a resilient pipeline.
- New orders signed increased by 35.7% with that for clean energy surged 100.2%. Order backlog of Rmb26.9bn represents a growth of 41.9% YoY and 17.8% against end-FY23.
- Management also commented that there is a marked improvement in gross margin for 1Q24 and expects this trend to continue. Its 10.8x PER is inexpensive.
Pre-IPO Sunho Biologics (PHIP Updates) – Some Points Worth the Attention
- Sunho’s pipeline has high risk and there is a long way to go to demonstrate their final clinical value. It’s highly uncertain if Sunho would bring expected return to investors.
- The entities involved in the process of reorganization were all related parties. Investment from Efung Anhe/Efung Ansheng sparked concern from CSRC. Sunho is required to explain whether there’s any benefit transfer.
- Due to the lack of strong fundamentals, there is no reason for high valuation. It’s not surprising if Sunho’s valuation finally falls below HKD1.53 billion (or even below HK$1 billion).
💡 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
