Daily Brief China: Nws Holdings, 4Paradigm, Hainan Meilan International Airport, J&T Express , JST Group, Luyuan Group, Alphamab Co Ltd, Azure Power Global Ltd and more

• Chow Tai Fook (CTFE) has made a voluntary cash Offer for New World Development (17 HK)‘s (NWD) 60.88%-held NWS Holdings (659 HK) at HK$9.15/share, a 22.2% premium to undisturbed. 
• CTFE and connected parties hold 45.24% of NWD, therefore the parent is effectively injecting ~US$2.75bn of cash into NWD for its NWS stake.
• The Offer is subject to regulatory approvals in Hong Kong and Bermuda. These will not be an issue given CTFE is NWD’s ultimate shareholder. 

• 4Paradigm (1764934D HK) is looking to raise about US$600m in its upcoming IPO in Hong Kong. 
• 4P is a platform-centric AI enterprise solutions provider. It was the largest player by revenue in the platform-centric decision-making AI market in China in 2022, as per CIC. 
• In our previous note, we took a look at the company’s background and financial performance. In this note, we will cover the firm’s refiling updates.

• A slew of bad news from weak China consumption, depreciating RMB to negative progress in an arbitration sent Meilan Airport stock down to below book value.
• Yet when it comes to the fundamental of the company itself, we believe concerns are over-blown and very much priced in.
• Meilan Airport is the most under-valued major airport in China airport space in our view. Patience will pay off.

• Global logistics and express delivery service provider J&T Express (1936374D CH) has filed for an IPO on the HKEx to raise about US$500m-1bn.
• J&T’s SEA operation is the only gross margin making business, however, the segment’s gross margin has been on a declining trend.
• Though the gross losses of China biz has reduced during 2020-2022, J&T continues to invest in China to capture market share which we think would delay profits.

• JST Group (1703609D CH) is looking to raise at least US$100m in its upcoming HK IPO. The deal will be run by CICC and JP Morgan.
• Jushuitan (JST) is China’s largest e-commerce SaaS ERP provider in terms of revenue in 2022, with a market share of 20.7%, according to CIC. 
• The firm offers a suite of cloud-based e-commerce SaaS products, and is able to connect merchants with over 350 e-commerce platforms in China and across the world.

• Luyuan Group (LUYUAN HK), a founder-led company and a pioneer in the e-bike industry in China, is looking to raise capital via the upcoming Hong Kong IPO. 
• Luyuan Group (LUYUAN HK) is an extremely ambitious manufacturer of electric bicycles and electric motorcycles in China. ”Luyuan” is a trusted and well-known brand in Asia and worldwide.
• I like profitable growth at scale and believe Luyuan Group IPO would be attractive to investors, given the company’s 40% y/y revenue growth and valuable brand.

• KN046’s commercialization prospects is limited if it doesn’t demonstrate better results than PD-1 in head-to-head trial. The value of KN046 still lies in its potential to treat PDAC not sqNSCLC.
• KN026 is difficult to become a blockbuster variety. JSKN003 may not have good opportunity in front of DS-8201. Many investors are unhappy with Alphamab’s credibility and information disclosure quality.
• Alphamab’s valuation is already at low level. However, considering the current pessimistic sentiment towards biotech in HKEX, investors are advised to remain cautious, and just short-term trade is recommended.

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.

• Azure Power Global Ltd
• Sino-Ocean Service