Daily Brief China: L’Occitane, Alibaba Group Holding , Giant Biogene, Huafa Property Services Group, Miniso, Agile Property Holdings and more

• L’Occitane (973 HK) announced that the share alternative pre-condition was satisfied. However, The share alternative offer is at the offeror’s discretion and with the consent of the financing parties. 
• The share alternative offer poses a dilemma due to the requirement to satisfy the minimum acceptance condition while not breaching the upper limit of the share alternative offer.
• The share alternative offer is a play on higher multiples by relisting the business. At HK$50.00, L’Occitane would trade in line with its median global beauty peers’ multiples.

• In the 29th April HK$34/share VGO announcement, a share scrip alternative may be afforded if 10% of L’Occitane (973 HK)‘s disinterested shareholders expressed interest by the 15th May
• That pre-condition has been satisfied. However, we are none the wiser whether you receive shares of the levered-up Bidco, at some undetermined scrip ratio; or keep shares of L’Occitane as-is.
• Some shareholders, like Butler Hall, considered terms low-balled. They now have the option to rollover. But there are still other large activists on the register, whose intentions are not known. 

• On first look, Alibaba Group Holding (9988 HK) missed on margins in 4QFY24 as adjusted EBITA declined by 5% yoy.
• We can give the company the benefit of the doubt given that the important segments of the company are heading into the right direction.  
• Alibaba returned USD13.4bn and USD16.5bn to shareholders in FY23 and FY24, compared to the current market cap of USD197bn

• Giant Biogene (2367 HK) aims to raise up to US$205m via a top-up placement.
• We have followed the company since listing and its recent performance has been great. Although it doesn’t seem to need the cash.
• In this note, we will run the deal through our ECM framework and talk about the recent updates.

• Huafa Property Services Group (982 HK) is currently suspended pursuant to the Takeovers Code. 
• This SOE-backed property management play recently announced its highest-ever earnings.
• Shares have gained ~32% in the past fortnight, touching a three-year high. IF an Offer were to unfold, expect an Offer Price ~10% above the last close. 

• BABA reported CY1Q24 top line, GAAP operating profit and non-GAAP net income 0.9%, (4.6%) and (6.7%) vs. consensus, and in-line, in-line, (6.9%) vs. our estimate;
• Results reaffirmed our positive view as increased investment is leading to significant improvement in key businesses: (1) Taobao/Tmall stabilized, (2) overseas e-commerce accelerated along with overseas AntFin and Cainiao
• We expect pay-off from its strategy shift in 2H of the year. Spin-off, dividends,and share buy-backs provide valuation support until then.We maintain BUY and US$85 TP, implying 9.5x CY25 P/E.

• Miniso (MNSO) reported C1Q24 revenue in-line with our estimate/consensus. Non-GAAP NI beat our estimate/consensus by 4.2%/2.6%, mainly due to better gross margin from IP sales.
• Company cited pressure on profits in C2Q24 due to store expansion, yet we still believe MNSO can maintain an OPM of 20% for entire 2024
• We maintain a BUY rating on the stock and maintain TP at US$34/ADS

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.

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