China Archives | Page 33 of 154 | Smartkarma

• Shenzhen International (152 HK) is well set to post a significant YoY and HoH growth in earnings in 2H23. Our discussion with the company confirmed this.  
• Profit from Yicheng Qiwanli is expected to be booked and there will be profit upside from REIT listing with logistics hubs at Hangzhou and Guizhou as underlying assets.
• Significant reduction in USD and HKD-denominated debt will reduce its exposure to foreign exchange losses as well as high interest rate, both will be reflected in 2H23.

• J&T Global Express, a global logistics service provider, is looking to raise about US$500m in its upcoming Hong Kong IPO.
• As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
• We have looked at the company’s past performance and undertaken a peer comparison in our earlier notes. In this note, we talk about valuations.

• PAGD successfully narrowed net loss. It seems that the Company doesn’t mind “sacrificing” revenue scale, which could be considered “a necessary price” to pay for the transition to 2B model.
• PAGD mainly rely on Ping An Group channels to acquire B-end and F-end users, but based on our calculation, PAGD would encounter an obvious growth ceiling at certain revenue scale.
• Although PAGD could achieve breakeven by divesting businesses with low strategic synergies and effective cost control, the Company’s long-term growth potential and prospects remain uncertain, leading to discounted valuation.  

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.

• China Hongqiao
• Sunny Optical Technology Group
• Yanlord Land

• Back on the 26 June, Chow Tai Fook (CTFE) made a pre-conditional voluntary Offer for New World (17 HK)‘s 60.88%-held NWS (659 HK) at HK$9.15/share, a 22.2% premium to undisturbed.
• The Cheng-family-backed CTFE and connected parties held 45.24% of NWD, therefore the parent was effectively injecting ~US$2.75bn of cash into NWD for its NWS stake.
• The pre-cons are now done, with a 13 October despatch date for the Composite Document. Technically, this could be wrapped up before NWS’ final dividend ex-date. That’s worth exploring further.

• With no stocks in inclusion or deletion zone, we do not expect any constituent changes for the Hang Seng TECH Index (HSTECH INDEX) in December.
• Capping changes will result in a one-way turnover of 2.16% and that will result in a round-trip trade of US$556m.
• The impact of capping changes has doubled over the last month and there will be more changes from now till the official capping is done on 28 November.

• A new electric car powered by Huawei’s autonomous driving technology has hit the market with a bang, attracting tens of thousands of orders in less than a month and giving the telecom-equipment giant a confidence boost as it pushes further into China’s highly competitive auto market.
• As of Friday, more than 50,000 orders have been placed for the upgraded version of the Aito M7 SUV since it was launched on Sept. 12, said Richard Yu, chairman of Huawei’s smart car unit, in a social media post Saturday.
• For each order, customers paid a non-refundable deposit of 5,000 yuan ($695), according to information provided by Aito — a premium electric-vehicle (EV) brand co-developed by Huawei Technologies Co. Ltd. and automaker Seres Group Co. Ltd.

• China Tourism Group Duty Free (1880 HK) announced preliminary results for 3Q23 which came in below market expectations.
• Compared to the previous quarter 2Q23, sales declined by 1% q-o-q, while net profit margin declined from 10.4% in 2Q23 to 8.9% in 3Q23. 
• The company (H-share) is trading at 26x 2023E PE and 23x 2024E PE, still expensive as visibility is low and derating continues. 

• Lalatech has refiled for HKEx IPO and the company plans to raise around US$1bn through the IPO. This insight focuses on latest data points from the company’s new filing.
• The company has disclosed results for 1H2023 which point to notable improvement in the company’s financials including an operating profit margin of around 21% for 1H2023.
• There has been significant reduction in the company’s operating costs, merchant discounts and carrier incentives in particular, which have helped significant improve the company’s margins.

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.

• China Jinmao Holdings
• Country Garden Holdings Co

• J&T Global Express, a global logistics service provider, is looking to raise about US$500m in its upcoming Hong Kong IPO.
• As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
• We have looked at the company’s past performance and its PHIP updates in our earlier notes. In this note we will undertake a peer comparison.

• Guoquan’s model is easy to replicate.The so-called “moat” is all based on scale effects, without which Guoquan would lose competitiveness.This is why Guoquan has been striving to expand franchised stores.
• With the increasing frequency of people dining out after China reopens, the high-speed expansion in 2020 seems unsustainable. To B model has less growth space/potential than To C model.
• In such a fiercely competitive market, Guoquan’s long-term development logic is not solid. The current temporary improvement in financial performance is likely to be a flash in the pan.

• Zhongsheng Group (881 HK) is in deletion zone and could be deleted. China Unicom Hong Kong (762 HK) could be added to the index as the highest ranked non-index constituent.
• Estimated one-way turnover at the rebalance is 2.14% resulting in a one-way trade of HK$1.38bn. Meituan (3690 HK), Alibaba Group (9988 HK) and Tencent (700 HK) will be capped higher.
• China Unicom Hong Kong (762 HK) is supported on its 50/100 day moving averages and could move higher. Zhongsheng Group (881 HK) has been trading below its moving averages.

• Tianju Dihe Technology, more commonly known as Juhe Data, filed to go public in Hong Kong. The company provides standard API services through its APIHub marketplace in China. 
• Tianju Dihe Technology plans to trade on the HKSE, and CITIC Securities is leading the IPO. The company was backed by JD Technology, a fintech unit of JD.com. 
• With a market leadership position and a mission to empower the digital economy with data technologies, I have no doubt that Tianju Dihe Technology will have a successful IPO.

• WuXi AppTec’s share price has performed well recently, mainly driven by CXO’s “immune attributes” to anti-corruption campaign, investors’ bullish view of weight loss drug business, and the previous oversold rebound.
• Peptide CDMO business would contribute limited incremental performance to WuXi AppTec considering overall large business volume.Downward trend of CRO business is hard to be hedged by weight loss drug business.
• Due to higher-for-longer rate, China CXOs only have rebound value, but no reversal logic. It’s time to consider taking profits in a timely manner before the share price falls again.

• US users of the popular SHEIN and Temu shopping apps tend to be relatively young
• Compared to older Americans, younger Americans (18-34) tend to have less political clout
• What does this mean for SHEIN and Temu, and how will they respond to political challenges?

• Nearing the end of the review period, we forecast 8 changes for the ChiNext Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in December.
• Given stock selection uses liquidity as a major input, the impact of passive trading will be much larger on the deletions as compared to the additions.
• The potential adds have outperformed the potential deletes, but relative performance has been drifting lower over the last few months. There are stocks that will have flows from other indices.

• Lalatech Holdings Co Ltd (LALA HK) is looking to raise about US$1bn in its upcoming HK IPO.
• Lalatech operates via a marketplace model serving merchants and carriers. Its platform facilitates closed-loop transactions from online shipping order booking to intelligent order matching, and automated dispatching to after-sale services.
• We have looked at the company’s past performance in our earlier notes. In this note we will talk about the updates from its refiling.

• The HSI INDEX has fallen for 2 more weeks since our last insight – current CC is =-5, and Q3 support was breached last week, the index is clearly OVERSOLD.
• If the HSI bounces this week, it could be an occasion to go SHORT – take note that the index could take 3 weeks to rally before rolling down again.
• The target price area where to enter SHORT trades,to benefit from a continuation of the downtrend is: 17598-18784.

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.

• Hopson Development
• Lenovo
• Tata Steel Thailand
• West China Cement

• The pre-condition for the Nws Holdings (659 HK) voluntary general offer from the Cheng family is satisfied. The total offer (HK$9.15 + 2H dividend) is HK$9.46 per share.
• The key condition is (majority vote) approval by independent NWD shareholders. NWD’s share price decline and dependency on NWS earnings/cash flow support a NO vote.
• A reasonable offer which reduces NWD’s gearing, results in a special dividend and helps reduce the holding company discount supports the YES vote. We think that the YES vote prevails.

• Outbound daily traffic during the long holiday down -15% vs 2019, and short of expectations
• Total domestic trips up 4% vs 2019, but average daily trips -9% & average daily spending -4%
• Ten months in, the pace of China’s 2023 tourism recovery remains disappointingly sluggish

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.

• Greentown China
• Tata Motors ADR

• The YTD underperformance of Dongfang Electric (1072 HK) has put it on very attractive PER of 5.8x for FY23. More importantly, it has delivered both earnings and new order growth. 
• Financial position has improved with net cash of Rmb16.5bn and its recurring earnings soared 26.5% at 1H23. The adverse economic environment has not had an impact on its operations.
• New orders amounted to Rmb48.9bn (+33.3% YoY), a record high, and we estimate backlog at Rmb166bn. This equals 2.5x FY23F revenue and suggests forward earnings are well covered.

• Haitong International Securities Group (665 HK) announced a pre-conditional privatisation offer from Haitong Securities Co Ltd (H) (6837 HK), the controlling shareholder, at HK$1.52, a 114.1% premium to the undisturbed price.
• The pre-condition related to regulatory approvals are a formality as Haitong Securities’ largest shareholder is the Shanghai SASAC. The offer price is final.
• The key conditions are approval by at least 75% of independent shareholders (<10% of independent shareholders rejection) and headcount test. The highest HKEx takeover premium in a year facilitates approval.  

• When Haitong International Securities Group (665 HK) was suspended on the 27 September, a punchy premium was expected if controlling shareholder Haitong Securities Co (600837 CH) was launching an Offer. 
• And that is what we got: a $1.52/share Offer, by way of a Scheme, and a 114% premium to last close. Terms have been declared final.
• This is a pre-conditional Offer, requiring approvals from approvals from Shanghai SASAC, CSRC, NDRC, and the Shanghai branch of the PBOC. 

• Weight loss drug business has indeed significantly alleviated concerns about overcapacity issue in those leading CDMOs, but they do not have such a strong driving force on CROs.
• The last straw that hits an industry is often not due to the disappearance of demographic dividends/declining demand/poor financial performance of companies, etc., but rather to policy-guided capital flows.
• 3D Medicines (1244 HK) can be said a typical negative example in biopharmaceutical industry, and it is easy to be “manipulated”. We recommend investors stay away from such high-risk company.

• In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes for the Hang Seng Index in September 2023.
• The index changes for the December 2023 rebalance will be announced in mid-November (17 Nov) and implemented in early-December (with effect from 4 Dec).
• Although the Hang Seng index has a highly subjective constituent selection process and index changes are somewhat unpredictable, we will continue sharing our thoughts for each quarterly review.

• Weekly summary of vol changes and moves across Global Markets
• Analysing ATM volatility and skew changes over the last 5 days
• We suggest a few trades to take advantage of the implied vol surfaces

• Legend Biotech Corp (LEGN US) reported six-fold jump in revenue to $73M in 2Q20, driven by strong uptake of the sole commercialized drug, Carvykti, which generated worldwide revenue of $117M.
• Label expansion applications have been submitted to the FDA and EMA seeking approval of Carvykti for the earlier treatment of patients with relapsed or refractory multiple myeloma.
• Legend Biotech has 11 pipeline programs covering hematologic malignancies and solid tumors. Recent financing activities have fueled the company’s cash balance to $1.5B, which should provide cash runway through 2025.

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. AAC Technologies Holdings
2. Vedanta Resources
3. China Vanke
4. JSW Infrastructure
5. Medco Energi

and more…

• People’s Insurance (PICC) (1339 HK) is currently trading at an all-time low implied stub.
• Stripping out PICC’s 68.98% stake in PICC Property & Casualty H (2328 HK), the market is assigning HK$35.6bn less for its steady and profitable life/health insurance stub ops, year-to-date. 
• PICC is outperforming the HSI. It’s just that PICC P&C is on a hot streak, possibly driven (pun intended) by EV insurance. 

• Xinyi Glass Holdings (868 HK)‘s stable auto glass business is often overlooked, making up 39% of the company’s gross profit in 1H23.
• Given the current valuation of 7x 2023E PE and 1.3x 2023E PB, the risk reward is skewed to the upside, and downside is protected with the stable auto glass business. 
• The company’s management has been aggressively increasing stake in the company in the last 2 months, gobbling up 11 million shares.

• Tian Tu Capital (1390587D CH) raised around US$144m in its Hong Kong IPO.
• Tian Tu Capital (TTC) is a private equity/venture capital investor and fund manager with a focus on Chinese consumer brands and companies.
• We have covered various aspects of the deal in our previous notes. In this note, we will talk about the demand and trading dynamics.

• Power output for China Power International (2380 HK) is healthy in Jul-Aug, following the solid trend in 1H23. The drop in hydropower has moderated and wind and solar stayed decent.
• Capacity growth will reach 43% in FY23. With just 7.8% YoY in 1H23, most of the new capacity will be added in 4Q23, accelerating both output and profitability.
• The parent SPIC’s massive clean energy assets are candidates for potential injection. CPI’s high EPS CAGR of 28.8% means that it well deserves premium valuation multiples. 

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.

• AAC Technologies Holdings
• Tata Motors ADR

• New World Development (17 HK) nudges an all-time low P/B and implied stub; as the privatisation of NWS Holdings (659 HK) moves gradually forward. 
• Preceding my comments on NWD/NWS are the current setup/unwind tables for Asia-Pacific Holdcos
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• J&T Global Express (1936374D CH), a leading express delivery business in Southeast Asia and China, is pre-marketing a HKEx IPO to raise US$500 million, according to press reports.   
• We previously discussed the IPO in J&T Global Express IPO: The Bull Case and J&T Global Express IPO: The Bear Case. 
• The PHIP filing favours the bull case due to a return to organic growth across the main geographies, maiden profitability, stabilization in contract liabilities and declining FCF burn.

We view China Oil and Gas (COG) as “Medium Risk” on the LARA scale. This takes into account: [1] regulatory risk, with the company having experienced over three years of delays in cost pass-throughs for tariffs in Qinghai (albeit these have since been resolved); [2] COG’s exposure to oil price volatility in the small upstream oil & gas segment; and [3] the company’s track record of aggressive debt-funded acquisitions, albeit management has said that it is not keen on increasing indebtedness for expansion or acquisitions.

COG’s main asset is its 51% interest in downstream gas provider China City Natural Gas, with the remaining 49% held by Kunlun Energy, a subsidiary of SOE PetroChina. Hence, cash leakage from dividends is significant. We believe the relationship with Kunlun helps secure COG’s gas supply and improves the company’s ability to obtain gas distribution concessions. In addition, PetroChina’s parent, China National Petroleum Corporation, previously provided financing to CCNG at competitive rates.

Our Credit Bias on COG is “Stable”, given the company’s solid revenue growth from natural gas sales and distribution, despite volatilities associated with the upstream oil exploitation and production business. COG has historically maintained a sound liquidity profile and reasonable access to funding. That said, we remain cautious over the financial performance of Shandong Shengli (for which COG is the single largest shareholder at 22%). This is as COG has provided guarantees for Shengli’s banking facilities, which could impact COG’s credit profile.  

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

• Concord Healthcare Group (CHG HK)’s hospital business is not strong enough to contribute strong performance consistently, leading to unsatisfactory profit margin considering its weak hospital operation and management capability.
• The network business could face some legal risks based on our analysis. In the context of anti-corruption campaign in China healthcare, Concord’s business and patients flow could be affected.
• Together with potential policy risks such as DRGs/centralized procurement, we tend to be conservative about Concord’s outlook. In terms of valuation, Concord’s valuation should be lower than Inkon Life Technology.

• CALB Group (3931 HK) raised around US$1.2bn in its Hong Kong IPO in Oct 2022. The lockup on its pre-IPO shareholders will expire tomorrow.
• CALB undertakes design, R&D, production and sales of EV batteries and Energy Storage Systems (ESS) products in China.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• Topsports International Holdin (6110 HK) is a pure-play on Nike and Adidas retail sales in China, as it is a leading retail partner of Nike and Adidas in China.
• Nike’s Greater China sales grew 12% yoy during the most recent quarter.  During the earnings call, Nike management was bullish on the prospects of the China business.
• The company currently trades at 13x forward PE, with a forward dividend yielf of 7%. 

• Cainiao Smart Logistics (1437124D HK) has filed an application proof to list on the HKEX (388 HK) and could raise US$1bn at a valuation between US$15bn-20bn.
• Cainiao Smart Logistics (1437124D HK) could get Fast Entry to the HSCI and be included in Southbound Stock Connect once the price stabilisation period is complete.
• Inclusion in other indices will take longer with the highest probability of index inclusion in June. Earlier inclusion will depend on the IPO timing, size and allocation to strategic/cornerstone investors.

• Global logistics and express delivery service provider J&T Express’ HKEx IPO application has been approved and this insight focuses on new data points from the PHIP filings.
• SEA segment’s GPM has further declined during 1H2023, however, gross losses of the other two segments have declined significantly resulting in GPM for the company.
• Our analysis suggests that with falling SEA margins, J&T Global Express (1936374D CH) may not be able to generate operating profits in the medium-term.

• Beijing UBOX Online Technology (1741985D CH) is looking to raise up to US$500m in its upcoming Hong Kong IPO. 
• Beijing UBOX Online Technology (UBOX) is an unmanned retail operator (vending machine) in China.
• We had looked at its past performance earlier. In this note, we look at the updates from its recently filed PHIP. 

• In this insight we focus on J&T’s improved H123 performance in China and SE Asia
• How did the company achieve these gains? And do the improvements appear sustainable?
• We conclude with an updated estimate of J&T’s Enterprise Value: US$9.1 Bn

The Asia Monthly focuses on providing updates on recent events, information on new issues and spread movements, as well as summarising our top picks. The Asia Monthly is intended to broaden investors’ understanding of the Asian USD high-yield market.

• After going ex-dividend in June, Water Oasis (1161 HK) corrected and has remained rangebound at the 1.35-1.45 HKD/levels due to negative sentiment on HK/China.
• We expect FY23 results to be reported in late November/early December. We expect an increase of 19%/85%  in Revenue/PAT with a 16-cent dividend for FY23 (11.4% dividend yield).
• Stock trades at 7.6x/6.2x PE FY23e/24e, a dividend yield of 11.4%/14% FY23e/24e with 25% of the market capitalization in cash. 

• Malo’s revenue had good growth, but revenue scale is still small. At the current gross margin level, it would be difficult to generate decent profits considering the large SG&A expenses.
• Dental care expansion is difficult. Malo would face the challenging such as lack of high-quality dentists and centralized procurement. Both would drag down profits and cash flow.
• We are not optimistic about Malo’s share price performance after IPO. This industry’s profit mode is not mature. Most of chain dental services providers are still in cash-burning expansion stage.

• Luyuan Group, a pioneer in the e-bike industry in China, set terms for an upcoming IPO. The company offers ~106.7M shares at the expected price range of HK$6.00 to HK$8.00.
• The IPO price range implies a market cap of roughly HK$3B at the midpoint. Cornerstone investors have agreed to subscribe and purchase ~71% of the Offer Shares.
• Shares will begin trading on the HKSE next week. I believe the IPO will be priced at the low end of the range as e-bikes sales have slowed in Asia. 

• J&T Global Express, a global logistics service provider, is looking to raise about US$500m in its upcoming Hong Kong IPO.
• As per Frost & Sullivan (F&S), the firm is the leading express delivery business in Southeast Asia, with a 22.5% market share as per 2022 parcel volume.
• We have looked at the company’s past performance in our earlier notes. In this note we will look at its PHIP updates.

• Last week, the Cyberspace Administration of China (CAC) put forth a proposal to relax certain stringent regulations concerning the transfer of sensitive data to foreign countries.
• This could be advantageous for Alibaba Group Holding (9988 HK)‘s Cloud business, especially as a potential candidate for an IPO following the recent IPO filing of the logistics arm, Cainiao.
• Despite improved regulations, concerns about stability, leadership, and financial performance pose hurdles for Alibaba Cloud’s IPO.

• With the potential corporate action (see additional reading below) there is more interest in Haitong Securities but operationally it does not appear positive, for many reasons
• The company is seeing worse revenue growth in asset management, brokerage and investment banking, while its Haitong Bank can see far higher credit costs
• Total operating costs are now 63% of revenue, tax rate is a lot higher, litigation risks seem to be oversized, with potential impact to costs

• Yichang HEC Changjiang Pharma (1558 HK) reported a whopping 148% YoY growth in revenue to RMB3,209M in 1H23. Net profit rebounded to RMB3,209M from a loss of RMB33M in 1H22.
• In H1 2023, revenue from Kewei, approved for first-line treatment of influenza, jumped 186% YoY to RMB2,881M, representing ~90% of total revenue, mainly due to spiking flu cases in China.
• Recently, the company obtained approval for premixed Protamine human insulin injection and submitted marketing application for its self-developed product, Yiqibuvir for the treatment of chronic Hepatitis C in China.

• The Brand-Spanking New (8 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning in pairs over time, etc.
• We used to do it. We brought it back better, with lots of cool interactive tables, and charts, heat maps, and comparative data. And 47 Trade Recommendations.
• The last 7 weeks (since the start of the new Trcker and Portfolio 8 weeks ago) have seen net portfolio performance of +0.50%, +1.35%, +0.14%, +0.47%, +0.15%, +0.12%.

• Business model: how does CaiNiao get paid, and by whom, and for what?
• Key relationships with parent Alibaba and with China’s listed express companies
• Differentiators: what makes CaiNiao different from other e-comm logistics names?

• Several provinces have successively introduced policies to encourage childbirth. Increasing medical insurance reimbursement and special additional deduction standards for personal income tax would be the common direction. 
• This year is mainly a period of intensive introduction of relevant fertility support policies, so the impact on company’s performance is limited.The focus would be on next year’s financial results.
• We analyzed the performance of Livzon Pharmaceutical Group In (000513 CH),BGI Genomics (300676 CH) and Jinxin Fertility Group (1951 HK) based on their 23H1 reports, and adjusted our forecast accordingly.

• The fall in share price in the last five months have sent China Communications Construction (1800 HK) back to very attractive level. The market has misread the strong 2Q23 result.
• 2Q23 recurring net profit surged 68.5% as 2Q22 has an inflated base. Gross margin has recorded meaningful YoY recovery while capex, particularly for BOT, has scaled back significantly. 
• There should not be concerns about CCCC’s contract outlook. Its backlog is enough to cover 4.9x FY23F revenue and its PER of 2.7x has provided more than sufficient buffer.

• Shineway’s 23H1 performance exceeded expectations. High growth of injection products/TCM formula granules was commendable.But as pandemic is under control, sales of Shineway’s respiratory system prescription medications would decrease in 23H2.
• The national VBP of TCM formula granules and the anti-corruption campaign in 23H2 could be the short-term headwinds to Shineway’s performance, which could lead to lower-than-expected 23H2 performance growth. 
• China’s favorable policies will provide strong support for the development of TCM industry. Shineway’s TCM formula granules business would have outstanding future growth. So, we’re optimistic about Shineway’s long-term outlook.