Daily Brief China: Meituan, Aag Energy Holdings, Cainiao Smart Logistics, Dongfang Electric, CIFI Holdings, Remegen, Hainan Meilan International Airport and more

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• Alibaba (ADR) (BABA US)‘s restructuring news caused some exiciting in the IPO market this week, with Hong Kong filings picking up as well. 
• On the placements front, all eyes remain on Meituan (3690 HK) and whether Prosus (PRX NA) will do a placement.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments – Rakuten Bank (5838 JP), Trial Holdings (5882 JP), PT Trimegah Bangun Persada Tbk (Harita Nickel) (2230010D IJ) and Merdeka Battery Materials (2012725D IJ) IPOs.
• Event-Driven developments  Aag Energy Holdings (2686 HK), Toshiba Corp (6502 JP), Toyo Construction (1890 JP), Liontown Resources (LTR AU), Mincor Resources NL (MCR AU), Origin Energy (ORG AU). 

• Alibaba (ADR) (BABA US)‘s multi-faceted logistics unit Cainiao Smart Logistics (1437124D HK) may seek an IPO in Hong Kong before the end of 2023, according to media reports
• In this piece we look at why CaiNiao is being spun off now, what the company actually does (and doesn’t do), what its likely comps are, and more
• CaiNiao is unique, but we can begin to understand its position and its valuation by comparing it to JD Logistics (2618 HK) and S.F. Holding (002352 CH)

• Dongfang Electric (1072 HK)‘s 35.1% increase in FY22 recurring earnings demonstrated its healthy operations. Slowdown in 4Q22 (+14.4% YoY) is more a result of pandemic disruption. 
• Record new orders of Rmb65.6bn were signed FY22 (+16.3% YoY), and 4Q22 even saw a 25% growth. End-FY22 backlog is estimated to be enough to cover 1.66x FY22 revenue.
• DEC targets a 35% growth in power generation equipment production volume in FY23. Power storage, including pumped storage, and hydrogen energy are important engines going forward.

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
• Fosun International
• Sands China
• Sino-Ocean Service
• Tata Motors ADR

• Considering DS-8201’s outstanding data and strong competing drugs, RC48 would probably contribute revenue to RemeGen mainly from GC and UC indications in China.Overseas revenue would be mainly from UC indication.
• After Pfizer acquired Seagen, there are concerns that RC48 (a “Me-Worse”) may be returned by Pfizer. If it is the case, only the revenue in China market should be considered.
• Based on 2022 annual results, we think it is time to reassess the outlook and sales forecast of RC48 and RC18, because the story has changed for RemeGen.

• FY22 results announced last week were in line excluding non-recurring items. The results provided latest evidence of monetization potential of its passenger traffic and insights into its cost base.
• We trim 2023 net profit estimate by 10% to RMB520 million and maintain RMB1 billion net profit estimate for 2025.  Expect 25%/150% return by 2023/25 respectively based on 20x P/E.
• Duty-Free concession agreement renewal in 2025 is a key positive catalyst, but we also caution potential follow-on share issuance this year could be an overhang on stock price.