Daily Brief China: Tianqi Lithium, Tencent, Shanghai United Imaging Healthcare, Road King Infrastructure, Cubic City Service Apartment Group and more

• We see 4 potential inclusions to the FTSE All-World and All-Cap indices that will be implemented at the close of trading on 16 December.
• There are a couple of other recent listings that are close to the investable market cap threshold and could be added to the All-Cap index.
• Given the lack of IPO in the April to August period, the rebalance will be quieter than usual though lock-up expiries will keep things interesting.

• The global game market can shrink in 2022, which will impact Chinese game companies’ global diversification.
• NetEase formally launched its own social networking service to compete with Tencent.
• Kuaishou announced that it would launch an e-commerce channel on its App’s homepage.

• Stock has fallen 17% since Sep 15th, and implied vols have picked up
• The fundamentals remain strong and tech momentum may be shifting
• We suggest two directional trades using options to play earnings

• United Imaging’s high valuation is driven by pandemic/policy dividends. After the impact of COVID-19 fades,the market needs new stories to judge a sustainable business model with increasing investment value.
• Although in the name of domestic substitution of high-end medical imaging equipment, most of sales still come from middle/low-end products. The real competitiveness in high-end market remains to be seen.
• United Imaging’s fundamentals and prospects hardly justify a market value of more than RMB100 billion. It’s expected that the stock price will return to rationality in the future.

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.

• Road King Infrastructure
• Vedanta Resources

• Cubic City Service Apartment Group (CCSAG HK) is looking to raise about US$500m in its upcoming Hong Kong IPO. The deal will be run by Morgan Stanley and CCB International. 
• Cubic City Service Apartment Group (CCSAG) is a rental apartment services platform, which pioneered the centralized rental apartment model in China, according to the company. 
• It provides rental apartments in centrally managed buildings with modern facilities. As of 30 Jun 2022 (1Q23), the company operates 76,190 apartments nationwide across 394 locations in 26 cities.