In today’s briefing:
- Tuhu Car IPO Trading – Lukewarm Subscription, Small Float Could Impact Trading
- Leapmotor IPO Lock-Up – US$3.3bn Lockup Expiry, Everyone in the Money, CCASS Movement to Boot
- Monthly Chinese Tourism Tracker | ‘Pent-Up’ Travel Demand — Does China Have Any? | (September 2023)
- Bank of Jiangsu – Fees -33%, Gains +64% Credit Costs -19%, Does Not Suggest Quality Earnings
- Pre-IPO Beijing Yuanxin Technology Group – Some Points Worth the Attention
Tuhu Car IPO Trading – Lukewarm Subscription, Small Float Could Impact Trading
- Tuhu Car (2007986D HK) raised around US$151m in its Hong Kong IPO.
- Tuhu is an integrated online and offline platform for automotive services in China.
- We have covered various aspects of the deal in our previous notes. In this note, we will talk about the demand and trading dynamics.
Leapmotor IPO Lock-Up – US$3.3bn Lockup Expiry, Everyone in the Money, CCASS Movement to Boot
- Leapmotor (9863 HK) (LM) raised around US$800m in its Hong Kong IPO. The stock was listed in Sep 2022, its lockup on pre-IPO investors will expire on 29th Sep 2023.
- LM is a smart EV company based in China, founded in 2015.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
Monthly Chinese Tourism Tracker | ‘Pent-Up’ Travel Demand — Does China Have Any? | (September 2023)
- August outbound travel activity surged against easy 2022 comps, but offered no surprises
- The pace of outbound capacity rebuild slowed in August — what do airlines see ahead?
- Is there really “pent-up” tourism demand among Chinese consumers? We don’t think so
Bank of Jiangsu – Fees -33%, Gains +64% Credit Costs -19%, Does Not Suggest Quality Earnings
- Fee income is down 33% in the most recent quarter which may have prompted the bank to realize gains up 63% in the period to preserve profit growth
- Quality of earnings is not strong, with more than half of the bank’s pre-tax income delta driven by realized and unrealized gains, with credit cost decline the other key driver
- Loss NPLs are now 26% of total NPLs, from 11% a few year ago, suggesting worsening credit metrics. Declining credit costs seem at odds with economy, NPL distribution.
Pre-IPO Beijing Yuanxin Technology Group – Some Points Worth the Attention
- Yuanxin’s financial performance has not improved and it is still in a state of continuous loss. At such low gross margin level, Yuanxin will find it difficult to make money.
- As China’s retail pharmacy market has entered a new era of integration as the industry growth is slowing down, the challenges Yuanxin has to face would be different from before.
- When the market pattern has been basically determined, Yuanxin has little chance to break through. Being acquired may be a better outcome. If IPO, valuation would be lower than peers.
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