In today’s briefing:
- WM Motor Holding IPO – The Negatives – Has Ample Issues to Contend With
- HSI Properties, Link RIET, HSI Financials, China Merchants Bank, and ICBC
- Sinotrans (598 HK): Still a Very Decent Performance
- Road King – Earnings Flash – H1 FY 2022 Results – Lucror Analytics
- Morning Views Asia: Guangzhou R&F Properties
WM Motor Holding IPO – The Negatives – Has Ample Issues to Contend With
- WM Motor Technology Co Ltd (WMT CH) (WMM) is looking to raise about US$1bn in its upcoming Hong Kong IPO.
- WM Motor is a smart EV player in China. As of the latest practicable date, it had a total of four main EV models.
- In this note, we talk about the not-so-positive aspects of the deal.
HSI Properties, Link RIET, HSI Financials, China Merchants Bank, and ICBC
- At the beginning of the week, I was determined to have this post with a more bullish tone. Maybe it is a contrarian indicator.
- But as of yesterday’s market, I see that my efforts were rather over-optimistic.
- The note is what is in front of me rather than speculating we are at the change in trend.
Sinotrans (598 HK): Still a Very Decent Performance
- Recurring profit for Sinotrans (598 HK) increased 16.4% in 1H22 and improved to 16.6% in 2Q22. The declaration of an interim dividend also highlights management’s confidence.
- We expect a pick-up in 2H22 as negative impact of the lockdowns faded. Also, contribution from DHL-Sinotrans should return to growth as international express regain momentum.
- Strong financial position should allow for higher dividend payout, and currently it is already yielding 10.4%. Its 3.6x PER and 0.4x P/B are cheap, especially relative to ROE of 11.3%.
Road King – Earnings Flash – H1 FY 2022 Results – Lucror Analytics
Road King’s H1/22 results were acceptable in our view. The company reported robust EBITDA growth and strong margin expansion, likely supported by deliveries of the higher-margin Hong Kong projects sold in FY 2021. Net debt improved marginally, in line with the stronger earnings.
That said, Cash/ST Debt was inadequate at 0.8x. Road King may face a funding gap for repayment of its USD 358 mn bonds in February 2023, though it should be able to bridge the gap through better cash collections in H2/22 or potential external financing (asset sales or equity issuances). Positively, the company has a well-spread debt maturity profile, with only one offshore bond coming due in 2023 and the next (USD 480 mn) due in September 2024.
Morning Views Asia: Guangzhou R&F Properties
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.
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