Daily Brief China: Xtep International, China Mineral Resources Group, China Jinmao Holdings, DiDi Global, Amazon.com Inc, Alteryx Inc, Best Wellness Innovation Group, Waste Management, Kwg Property Holding and more

• Group Success Investments is looking to raise up to US$133m by trimming its holdings in Xtep International (1368 HK).
• We can’t say that the deal is expected and short interest on the stock hasn’t been creeping up as well. 
• While the deal won’t be a large one, representing just 5.7 days of three month ADV, the firm’s last deal hasn’t done well.

• China’s central government formally launched a state-owned iron ore giant to consolidate China’s massive mining investments and coordinate global purchases of steelmaking materials for the world’s largest steel producing nation
• With registered capital of 20 billion yuan ($3 billion), China Mineral Resources Group was established Tuesday in the Xiongan New Area
• Creation of the enterprise is seen as part of China’s long-pursued goal of enhancing its position in the global iron ore trade

We view China Jinmao as “Low Risk” on the LARA scale. The company is one of Sinochem’s most profitable subsidiaries, and enjoys sound relationships with provincial governments. Overall, we believe Jinmao’s credit profile is supported by its SOE status. A Change of Control will be triggered under the USD notes indenture if Sinochem ceases to be Jinmao’s largest/controlling shareholder. In addition, the indenture for Sinochem’s offshore notes contain cross acceleration in the event of default by any significant subsidiary.

Our fundamental Credit Bias on Jinmao is “Negative”, on account of the industry’s prolonged sales weakness and the company’s uncertain access to offshore capital markets. T

Controversies are “Immaterial” and the ESG Impact on Credit is “Neutral”.

• The CAC of China said on Thursday that it has fined the country’s ride-hailing giant DiDi Global (DIDI US)  with RMB8.03bn (US$1.2bn) for violating data protection rules since 2015.
• According to their findings, Didi had been illegally collecting its users’ information which has been used in a manner which had endangered national security.
• In addition to the above fine on the company, CAC also has imposed two fines of RMb1m each on Didi’s Chief Executive Cheng Wei and President Jean Liu.

• Alphyn Capital Management LLC (“ACML”) is a registered investment advisor in New York. We help clients invest in high quality public companies to both preserve and grow their wealth over the long-term.
• The Master Account, in which I am personally invested alongside SMA clients, returned -14.7% net in Q2 2022, as reported by our fund administrator.
• With the threat of increasing rates, investors have renewed their focus on profits.
• I try not to take a position on a discrete event, such as interest rates or quarterly earnings, as the odds of getting these right are too low, and the costs of getting these wrong are too high.

• This is our first report on process automation player, Alteryx.
• The company had a great start to 2022 and saw increasing traction with large enterprise customers.
• The company’s brand-new, integrated Alteryx Analytics Cloud platform now offers access to its entire cloud portfolio.

• The growth in revenue and profit was mainly driven by the face mask business, but this business has ceased, which raises the concerns on future growth momentum of Best Wellness.
• Best Wellness’s weak performance of its own-brand business would prevent it from standing out in the fierce market competition in the long term. 
• Together with over-reliance on limited customers and the complex international relations, we are conservative about the Company’s outlook at the current stage.

• Waste Management Inc is the market leader in the waste management business with a dominant share in the U.S. market.
• The company’s strong performance in the initial months of the year has set the tone for the remainder of 2022.
• Among major developments, the seventeenth R&D plant in their network and the fifth created by Waste Management will be coming online shortly in Oklahoma.

• This is our first report on environmental services player, Republic Services.
• The company has had a decent start to 2022 delivering EBITDA and revenue growth and showed an increase in the generated adjusted earnings.
• Also, Republic Services continues to realize the advantages of its investments in technology.

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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