Daily Brief China: Vinda International, Hunan Changyuan Lico, Zai Lab Ltd, Poly Real Estate Group Co., Ltd, Dalian Wanda Commercial Properties, Yuexiu Real Estate Investment Trust and more

• Back on the 27 April, personal hygiene play Vinda International (3331 HK) announced its controlling shareholder Essity (ESSITYB SS) would commence a strategic review of its 51.59% ownership.
• That spurred, allegedly, a variety of suitors including Brazil’s Suzano, the world’s largest hardwood pulp producer, Bain Capital, CVC Capital, DCP Capital, and Indonesia’s Tanoto family.
• And the Tanoto’s have now emerged with a HK$23.50 pre-conditional Offer. The key risk is PRC regulatory approval . Elsewhere, this is a done deal. 

• STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
• In this insight, we take a look at our expectations for potential ADDs and DELs for the STAR 50 index during the March 2024 index rebal event.
• There could be up to four index changes. Some of these are high-conviction changes and some are low-conviction changes.

• Local news reported two positive developments for Zai Lab’s FcRn inhibitor Efgartigimod: (1) Rival CSPC/HarbourBio withdrew BLA for competing drug Batoclimab (HBM9161), (2) Efgartigimod was included in 2024 NDRL;
• We raise Zai Lab’s 2024 top line by 8.8% but keep non-GAAP operating loss largely unchanged；
• We raise TP by US$2 to US$20 and maintain SELL.

• The stock of Poly Development and Holdings Group Co. Ltd. jumped 7.6% Tuesday after the leading developer unveiled an up to 2-billion-yuan ($279 million) share buyback aimed at arresting its sliding equity price.
• Shares of Poly Development closed at 10.34 yuan in Shanghai Tuesday, compared with 9.61 yuan at Monday’s closing. The stock has nearly halved from the 18.59-yuan peak in April 2022 after the persistent downturn in the property market.
• Poly Development, China’s largest developer by sales this year, said late Monday that it plans to buy back 1 billion yuan to 2 billion yuan of its own shares in the next three months.

• Cash-strapped developer Dalian Wanda Group Co. Ltd. can breathe a temporary sigh of relief having reached an agreement with investors to avoid an immediate repayment of more than 40 billion yuan ($5.6 billion) for an unfulfilled flotation of its property management unit.
• Wanda faced having to repay a group of investors their 38-billion-yuan investments plus interest under a 2021 agreement if the developer failed to list its light-asset unit, Zhuhai Wanda Commercial Management Group Co. Ltd., by the end of this year.
• As Zhuhai Wanda’s listing plan failed despite four attempts, the repayment obligation became a ticking time bomb hanging over the company, which is struggling with capital drains amid plunging sales.

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.