Daily Brief China: Tencent, JD Health, ZJLD Group, Hong Kong Hang Seng Index, Hangzho Rokid Technology, ADICON Holdings Limited, China SCE, Shanghai Junshi Bioscience Co. Ltd., China Southern Power Grid Energy Efficiency & Clean Energy Co., Ltd and more

• On April 11, Prosus (PRX NA) made an Update on Repurchase Programme that it had repurchased shares in the market from the 3-7 April. They do so every week.
• This one said they would move 96 million shares of Tencent (700 HK) currently held in non-transferrable shares into CCASS so they could be sold. 
• The ADRs dropped in New York time. Tencent shares fell hard today. If the share price fell because of a block offering, that would be unwarranted. 

• With no changes made at the March rebalance, we are still stuck at 76 index constituents. And it’s been a year later than originally planned to reach 80 index constituents.
• We list 10 potential inclusions in June. Adding all 10 stocks will lead to around 5% one-way turnover, so there could be a mix of larger and smaller stocks added.
• There will be at least 1x ADV to trade on nearly all inclusions. Short interest is over 4% of float on some stocks and there has been a recent jump.

• ZJLD Group (ZJLD HK), a baijiu company in China, is set to launch an HKEx IPO to raise US$800-900 million next week, according to press reports.
• We previously discussed the IPO in ZJLD Group IPO: The Bull Case and ZJLD Group IPO: The Bear Case. 
• In this note, we present our forecasts and take the first look at ZJLD’s potential valuation range. 

• Hong Kong is the weak link in Asia to short. Bear wedge set to break lower after the rally failed under the 21,000 sell resistance. Similar fate for the A50.
• ASX met sub 7,400 zone to trim. Korea 327 sell zone, starting to unwind. NKY 28,300-500 sell zone at hand.
• A number of markets are approaching sell levels in Asia and Europe. Does the SPX rise may fall short of 4,200? Third week in April is when bull energy dissipates.

• Founded in 2014, Hangzho Rokid Technology (2004144D CH)  is a Chinese developer of AR glasses and AI robotics software products, and the company operates across 10 countries.
• Rokid’s glasses are mainly used for industrial purposes including in oil & gas, electric power, aviation, rail transport and others thereby creating its own niche in the AR/VR glasses sector.
• The company has just expanded into North America with further global expansion on the cards and may likely to seek an overseas listing.

• ADICON Holdings Limited (ADI HK) is looking to raise about US$400m in its upcoming HK IPO. 
• Adicon Holdings is one of the top three independent clinical laboratory (ICL) service providers in China in terms of total revenue during the Track Record Period, according to F&S. 
• In our previous notes, we looked at the company’s past performance. In this note, we talk about peer comparison.

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.

• Central China Securities
• China SCE
• Sino-Ocean Service
• Softbank Group
• Vedanta Resources

• We continue to view JUNSHI’s Phase III pipeline, consisting of Senaparib (JS109/IMP4297)(PARP), Ongericimab (JS002)(PCSK9), Bevacizumab (biosimilar) and VV116 (COVID)(RdRp) as unexciting; 
• Phase I/II drug Tifcemalimab (TAB004/JS004)(BTLA mAb) is interesting, but may not last to reach product sales;
• We acknowledge the bad news has already been priced in and raise the TP to HK$21, but JUNSHI still has unfavourable risk reward profile in our opinion.

• China Southern Power Grid Co. Ltd. has agreed to pay around $2.9 billion to acquire two Peruvian assets from Italy’s biggest utility Enel SpA, as the Chinese state-owned major deepens its footprint in South America amid a global business expansion.
• Under the agreement, a subsidiary of the Rome-based company will sell its entire 83.15% stake in distribution and supply company Enel Distribución Perú S.A.A. and 100% stake in advanced energy services provider Enel X Perú S.A.C. to China Southern Power Grid International (HK) Co. Ltd
• The deal will further strengthen the Guangzhou-based operator’s presence in South America.