China Archives | Page 49 of 154 | Smartkarma

• Growatt Technology (1833969D CH) is looking to raise about US$400m in its upcoming Hong Kong IPO, after downsizing from an earlier US$1bn float in Nov 2022.
• Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption, as well as energy digitalization. 
• In this note, we will provide a quick peer comparison update and our latest thoughts on valuation.

• China Communications Construction (1800 HK) should see more valuation upside as it narrows the discount to book through more asset disposal, spin-off, restructuring and securitisation.
• Healthy 1Q23 earnings demonstrated underlying business strength. We expect new contract growth to accelerate in the rest of this year. Backlog estimated to cover 4.7x FY23F revenue.
• Gross margin has stabilised in 1Q23 when compared with 1Q in previous years. Contribution from concessions will improve as traffic recovers and projects get mature. 

• We expect Hua Hong to report C1Q23 top-line, IFRS operating income, and IFRS net income in-line, 14.1% and 19.1% vs. consensus, respectively. 
• Our sample of 1Q23 A-share fabless balance sheets showed that inventory days rose, which we expect will lead to a slowdown in wafer orders beginning in 2Q23.
• Despite near-term weakness, we are positive the longer-term benefits of (1) localization, and (2) EV demand. We maintain BUY and raise TP to HKD35.

• China Fortune Land Development Co. Ltd said it successfully restructured more than 80% of its 219 billion yuan ($31.7 billion) debt overhang.
• The cash-strapped private developer returned to profitability after two years of liquidity crisis
• Hebei province-based China Fortune Land signed agreements with creditors to restructure 180.6 billion yuan of debts through various means by the end of 2022, accounting for 82.4% of total outstanding debt

• Luckin Coffee 1Q23 revenue beat is due to higher-than-expected store expansion, while SSSG is in-line with our estimate. 
• The normalized of RMB9.9 per cup campaign is expected to generate minor impact on Luckin Coffee’s profitability. 
• We maintain the stock as BUY and maintain TP at US$41.

• Minth’s stock price has been weak in the past year but its improving fundamentals started to reflect in the results in 2H22. 
• 2023 revenue growth will be supported by the overseas auto market recovery and fast-growing battery housing business. 
• Minth’s valuation is near historical low and is at a discount to its peers

• Urbanization and brand premiumization are Focus Media’s two long term structural drivers which will keep broadening its audience and advertiser base.
• 1Q23 results end a 5-quarter streak of profit decline and  mark the start of new profit cycle. This will usher in a meaningful stock re-rating if history is a guide.  
• We expect at least 30% upside by the end of 2023 by applying 25x P/E (still at large discount to last profit cycle) on RMB4.9 billion net profit for 2023. 

• Meituan has recently implemented three strategies to compete with Douyin: a low-price strategy, the addition of more video/live streaming content, and a management reorganization.
• The low-price strategy has already shown some promising results, as seen in the slowdown of Douyin’s local service GTV and the number of new merchants joining its platform.
• However, the effectiveness of the other two strategies, particularly Meituan’s push to add more video content, remains unclear.

• The cloud hospital platform services serve as “the entry point” of Neusoft Xikang’s overall solutions, but the restrictions imposed by cities would affect the scalability of business.
• The variety of 2B objects and the diversity of medical scenarios covered would be conducive to the transformation to 2C business, resulting in stronger user stickiness and more monetization opportunities.
• Xikang’s 2B business is weaker than ClouDr. Financial performance would finally reflect the effectiveness and rationality of business model. Xikang’s valuation should be lower than ClouDr and Ping An Good Doctor.

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.

• Adaro Energy
• Azure Power Global Ltd
• ENN Natural Gas
• Vedanta Resources

• In my previous insight in Mid-March 2023, we had a look at the potential index changes and the resultant capping flows for the HSTECH Index in June 2023.
• Since then, our flow expectations have changed with changes in prices and/or float and total share counts.
• Here are our latest flow expectations based on the current prices.

• In my previous insight in Mid-March 2023, we had a look at the potential index changes and the resultant capping flows for the HSCEI Index in June 2023.
• Since then, our flow expectations have changed with changes in prices and/or float and total share counts.
• Here are our latest flow expectations based on the current prices.

• Aag Energy Holdings (2686 HK)’s latest AGM results show a strong dissent from minorities. The number of NO votes per resolution varied from 590.9-652.5 million or 17.40%-19.22% of outstanding shares.
• The AGM voting shows that Xinjiang Xintai Natural Gas (603393 CH) will struggle to pass the scheme even if the record date is changed and some NO votes are invalidated.
• The risk-reward profile remains unfavourable as the downside to a scheme fail (12.1% to 17.0% downside) is greater than the upside to a scheme pass (+12.1% to HK$1.85 offer).

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.

• In unprecedented fashion, AAG Energy Holdings (2686 HK)‘s board adjourned the Court Meeting on the 27 April due to some voting instructions not being duly processed.
• That reasoning had a whiff of nonsense. And just under a week later, there has been no update. Perhaps this is moot though.
• At yesterday’s AGM, disinterested shareholders turned up in record numbers to vote against stock-standard resolutions. If a similar turnout were present at the Court Meeting, the Scheme would have failed. 

• Taste Gourmet (8371 HK) will report FY23 (March YE) results on June 23rd. Channel checks indicate strong momentum in Q4 Vs. Q3 FY23.
• Based on our estimates of 72/112 mn HKD for FY23/24e, the stock trades at 8x/5x FY23e/FY24e with a 7.6%/11.9% dividend yield assuming a 60% payout ratio.
• The company has 114 mn HKD of cash (20% of market cap), which is earmarked for restaurant expansion by 6-10 outlets and dividend payout (50-60% of earnings) in HK/China.

• Aier’s performance slowed significantly in 2022, with revenue and net profit growth rates at their lowest in nearly a decade.Although performance rebounded in 23Q1, the growth rate lags behind peers.
• In front of increasing competition and difficulty of finding good acquisition targets, Aier’s poor operational capabilities and endogenous growth cannot support rapid growth. The beautiful story has shown obvious cracks.
• Future single-digit growth is inevitable. Aier is significantly overvalued due to problematic long logic. It should be noted that there would be four further holdings reductions for Aier this year.

• While meeting expectations in 1Q23, Sinotrans (598 HK) has relied on a 105.2% surge in other income, mostly government subsidies. Without them, pre-tax profit would have dropped 21%.
• For most business areas, volume has come down YoY and QoQ, highlighting challenging operating environment. JV contribution, mostly DHL-Sinotrans, has also declined 11.5% YoY.
• While we like its long-term fundamentals and undemanding multiples, we have concerns on near-term headwinds and weakened earnings quality; and risks of profit downgrades.  

• We believe JD’s growth rate will continue to slow down and its margin will continue to improve in 1Q23.
• However, we also believe revenue growth will recover from 2Q23.
• We set a price target of HK$256, implying an upside of 85%. Buy.

• The government has started to encourage social capital to run hospitals. By entering the market that haven’t been fully covered by public hospitals, LDP has large development space theoretically.
• The current gross profit margin of LDP isn’t satisfactory. Together with continuous expansion of new hospitals with large investment, LDP could face either continuous loss or very low profit margin.
• China’s high degree of regulation depresses medical service price.The benefit chain of hospitals is complicated.In essence, an industry with low level of terminal payment is hard to generate high profits.

• Alibaba (ADR) (BABA US) Cloud will cut prices for its elastic computing services using Arm and Intel-based chips by 15-20% and Nvidia’s V100 and T4 graphics processing units by 41-47%.
• It seems like the company is trying to combat increasing competition in the only way it knows how, by further subsidizing its already-subsidized cloud services.
• Price may not be the main reason for companies to avoid using Alibaba Group (9988 HK)‘s Cloud services. Government initiatives to nationalize the cloud-computing market could be a bigger factor.

• 4Q22 result beat and 1Q23 result was roughly in line
• Revenue growth to accelerate and margin to improve in 2023
• Long-Term targets remain unchanged and the valuation becomes attractive now

• The market should be happy with the 43.9% YoY growth in recurring earnings at Dongfang Electric (1072 HK) in 1Q23. Gross margin of 18.7% is the highest since 2Q21.
• New orders surged 26.1% YoY and 92.4% QoQ to a record Rmb22.6bn in 1Q23. We estimate backlog equals to 1.42x FY23F consensus revenue, meaning a very secured pipeline.
• While EPS dilution is a concern, this has already been reflected in share price. The acquisitions of subsidiaries will enhance FY23 earnings. Its 8x PER and 0.8x P/B are inexpensive.

• Giant Biogene raised around US$70m in its Hong Kong IPO, after having downsized the deal and priced it at the low-end. Its six-month lockup will expire soon.
• GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

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.

• Central China Securities
• Japfa Comfeed Indonesia

• In 2022, Hygeia maintained stable revenue growth but with lower-than-expected profit performance. We think Hygeia’s profitability would improve gradually in the future as more and more new hospitals become break-even.
• Different from Aier/Topchoice, Hygeia’s acquired hospitals would be directly incorporated into the listed company, which means all aspects of consideration would be prudent. This is clearly more beneficial for investors/shareholders.
• Hygeia’s business model has proven to be replicable.The implementation of DRG policy has no significant impact on profitability. Hygeia is expected to have higher valuation than Aier/Topchoice in the future.

• We expect SMIC to report C1Q23 top-line, IFRS operating income, and non-IFRS net income (2.6%), (31%), and (29%) vs. consensus, respectively.
• Our sample of 1Q23 earnings for A-listed fabless firms found that (1) inventory days grew 18% QoQ to 191 days, and (2) revenues declined 9% QoQ. 
• Despite potential earnings miss, SMIC’s BUY case is strengthened positive externalities. We maintain BUY and raise TP to HK$24.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments – Yuexiu Property (123 HK) rights issue and ADICON Holdings Limited (ADI HK), Horizon Construction Development (1887128D HK), Mankind Pharma (6596876Z IN) IPOs.
• Event-Driven developments – Blackmores Ltd (BKL AU), United Malt Group Ltd (UMG AU),  Aag Energy Holdings (2686 HK), HKBN Ltd (1310 HK), Metro Pacific Investments Co (MPI PM), Lian Beng.

• We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads – 111 Inc (YI US), Estia Health (EHE AU), United Malt Group Ltd (UMG AU), Aag Energy Holdings (2686 HK), HKBN Ltd (1310 HK), Origin Energy (ORG AU).
• Lowest spreads – Healius (HLS AU), Liontown Resources (LTR AU), Lian Beng (LBG SP), Mincor Resources NL (MCR AU), Pushpay Holdings (PPH NZ), Blackmores Ltd (BKL AU).

• Southbound will close for 3 days due to holiday, we view it as a good time to buy the stock on short-term momentum
• Investment thesis for CNOOC is similar to China Mobile: Strong southbound flows and A/H premium to narrow to support H share price
• Valuation is attractive.  Potential share buybacks and trading dual counter (to narrow AH gap) are the upcoming catalysts

• Friday marked the end of the review cutoff for the MSCI, CSI300, CSI500, STAR50, SSE50, ChiNext and a bunch of other indices for the upcoming rebalances in May and June.
• There are no major index events coming up this week as a lot of markets are shut on different days.
• There were big inflows to mainland China ETFs during the week, while there was a big redemption from the iShares MSCI ACWI ETF (ACWI US). 

• It is relatively low-hanging fruit to “further propel the renmimbi’s internationalisation” and for HKEX, it will “cement HK’s position as the premier offshore renmimbi financing center.”
• The Conundrum: the more active investors decide they like Fast Retailing (9983 JP), the more there is to sell. That creates interesting opportunities.
• Short Yuexiu Property (123 HK) now, or soon. The dynamics of this is that there WILL be selling when the rights come out. 

• The real foothold of a pharmaceutical company lies in  “Development” rather than “Research”. After the clinical development has reached the first-class level, what remains is the vision of the leaders.
• For China biotech, we think they would go through four stages- Stage 1 (2015 – 2019), Stage 2 (2019 – present), Stage 3 (2026-2028) and Stage 4 (starting from 2030).
• If without Merck’s deal, Kelun’s profit improvement was mainly due to effective cost control. If Kelun could maintain double-digit revenue growth, with net profit margin around 10%, it’s already good.

• 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

• Tissue-Maker Vinda International (3331 HK) closed down 6.4% yesterday, recovering from a 13.8% fall intra day.
• Vinda said its 1Q23 operating profit declined 85.4% to HK$65mn. Vinda also announced its controlling shareholder Essity (ESSITYB SS) will commence a strategic review of its 51.59% ownership.
• A long-term shareholder potentially seeking a possible divestment, shortly after a company announces poor results, is not a great look.

• Adjusted net profit at China Education Group (839 HK) grew 15.1% in 1H23, accelerated from 5% in 2H22. We are delighted to see resumption of interim DPS at Rmb0.164.
• FY23 outlook will be underpinned by higher education student enrollment and tuition increase. Strengthened financial position offers opportunities for both organic and M&A growth.
• Potential upside will also come from completion of for-profit conversion at Jiangxi University of Technology. We consider its 7.9x PER, 1x P/B, 13.3% ROE and 5.5% yield attractive.

• We think the coffee price competition, mainly between Luckin and COTTI, is temporary, and will have little impact to Luckin’s gross margin. 
• We also think COTTI’s low pricing strategy is unsustainable, and its franchisees are keen for price hike.  
• We maintain the stock as BUY and maintain TP at US$41.

• Tencent will report 1Q2023E earnings on 17th May. Online gaming revenues have declined YoY for 4-consecutive quarters while social networks revenue has been down for the last two quarters.
• Our app data analysis suggests that grossing ranks of some of Tencent’s key domestic titles have dropped during 1Q2023 while international titles show an improvement during the quarter.
• Our regression model suggests that Tencent’s internet value-added services biz’s revenues would grow at lower single digits in 1Q2023E and is still playing catch up with its own self.

• The 27 April vote was adjourned as Aag Energy Holdings (2686 HK) Board was notified by “certain beneficial owners indicating that their latest voting instructions were not duly processed.”
• The meeting would not be adjourned if the YES vote was going to sail through. A delay helps the offeror as these owners will vote YES and deal fatigue sets in. 
• Risk-Reward is still unfavourable at the last close. The deal break fair value range is HK$1.37-1.45 per share, with 16.0%-11.0% downside. This compares to the 13.5% upside from the offer. 

• With 1 trading day left in the review period, we forecast 10 changes for the Chinext Price Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in June.
• Passive trackers are estimated to trade around +/-0.5 days ADV on most of the potential adds/deletes, though there are some deletes that will have over 1 day ADV to sell.
• The potential inclusion to one or both indices have outperformed the potential deletes by a huge margin in the last month. We’d be inclined to trim positions.

• Recent research conducted by industry players – most notably OpenAI – about the impact of generative AI on labor markets provides a framework for gauging its monetization potential.
• We take a small step forward to apply them to two specific occupations in China including translators and computer programmers, which combined represent RMB1,400 bn TAM.
• For China’s internet giants such as Alibaba, generative AI could result in cost savings of up to RMB20 bn, or 14% of its FY2023 net profit.

• Alibaba Group Holding Ltd. slashed prices for its core cloud services by as much as 50% and offered free trials of some cloud products for as long three months, fueling competition in an already crowded market. 
• Through the price cut, Alibaba Cloud hopes to make the cost of its cloud services significantly lower than costs offered by other data centers
• The valuation of cloud companies is generally based on the price-to-sales ratio rather than the price-to-earnings ratio

• At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. •1) Response to key levels. •2) Price action. •3) Momentum confirmation.
• Since peaking in January 2023, Tencent Holdings Ltd (700 HK) has produced a meaningful ABC correction that is yet to confirm its completion.
• We anticipate the correction confirming a MT bottom in the 302/330 range, ahead of a renewed multi-month uptrend. Our bullish multi-month target at 451.95 remains firm. 

• Air China Ltd (H) (753 HK)‘s 1Q23 result demonstrated a significant YoY and QoQ reduction in losses. At Rmb2.9bn, this is the smallest losses in last six quarters.  
• We witnessed a solid spike in overall yield and sharp margin recovery in the quarter. There is also encouraging performance in operating cash flow which turned around YoY to positive.
• Its associate Cathay Pacific Airways (293 HK) has seen Mar capacity returned to 50% of pre-pandemic level with over 90% load. More resumption of international flights will drive 2H23.

• Tianneng Power International (819 HK) is a supplier of Chinese EV 2-wheelers and has enjoyed decent growth in the past few years. 
• The correlation of top-line growth with its customers suddenly turned negative, a warning sign.
• Is it really cheap at 0.6x PBV? Maybe not, given the current status and the lead time before the recycling business is fully operational. 

• Singapore-based Cosmose AI said it has received an undisclosed sum from nonprofit Near Foundation to build a payment system that allows users to shop with cryptocurrency at low transaction fees.
• The deal bumped Cosmose AI’s valuation to US$500 million from US$100 million at the time of its series A round.
• Using smartphone data, Cosmose AI analyzes foot traffic and engages consumers online, providing insights into offline shopping habits and driving footfall across 20 million venues in Asia.

• Founded in 2015, CloudMinds (CMDS US) Robotics is a globally renowned creator, producer and operator of cloud robot systems and services.
• Its flagship product “CloudMinds Operating System” is a powerful AI platform that enables robots to communicate with the cloud and perform tasks that require advanced AI capabilities.
• CloudMinds previous attempt to list in the US was withdrawn due to security concerns, however, the company is said to be exploring a Hong Kong IPO in the near future.  

• Hang Seng Indexes has started a consultation on the eligibility of Foreign Companies in the Hang Seng Index, a review of the seven Industry Groups and number of HK constituents.
• We agree that foreign companies should be added to the index, no change needed to the Industry Groups, and the cap on the number of HK constituents should be removed.
• There are a few potential adds due to the removal of the cap on HK companies, while there are potential foreign company additions later this year or in 2024.

• ZJLD Group (ZJLD HK) raised around US$676m in its Hong Kong IPO.
• ZJLD Group (ZJLD) is a Chinese liquor company primarily producing baijiu.
• In this note, we will talk about the trading dynamics and valuation.

• ZJLD Group (ZJLD HK) priced its IPO at HK$10.82 per share to raise net proceeds of HK$5.0 billion (US$636 million). The shares will start trading tomorrow.
• We previously discussed the IPO in ZJLD Group IPO: The Bull Case, ZJLD Group IPO: The Bear Case and ZJLD Group IPO: Valuation Insights. 
• We expect a muted debut as A Share baijiu peers have derated since the release of the prospectus. The shares remain attractive at the IPO price. 

• The review period for the June rebalance ends 28 April. We expect the changes to be announced 26 May with the implementation taking place after the close on 9 June.
• Using a 12-month minimum listing history results in no index changes. Using a 6-month minimum listing history results in two changes – we think this is what will be used.
• The potential adds have outperformed the potential deletes but both sets of stocks have underperformed the SSE STAR50 (STAR50 INDEX) and the CSI Smallcap 500 Index – Shanghai (SH000905 INDEX). 

• JD Industrials is looking to raise about US$1bn in its upcoming HK IPO. 
• JD Industrials (JDI) is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
• In this note, we talk about the not-so-positive aspects of the deal.

• With 2 trading days left in the review period, we see 7 potential adds/5 potential deletes in June. However, there can be a maximum of 5 changes at a rebalance.
• We estimate one-way turnover of 5.58% at the June rebalance leading to a one-way trade of CNY 4.22bn. Index arb balances could increase the impact on the stocks.
• The potential adds have outperformed the potential deletes over the last couple of months and have underperformed over the last week.

• Horizon Construction Development (1887128D HK)/HCD, a subsidiary of Far East Horizon (3360 HK), is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.
• In Horizon Construction Development IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
• The key elements of the bear case rest on core business margin decline, unexplained headcount reduction, cash burn, long receivable days and stretched balance sheet.

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.

• Country Garden Holdings Co
• Tata Motors ADR
• Xiaomi Corp

• Horizon Construction Development (1887128D HK) is looking to raise US$250m in its upcoming Hong Kong IPO.
• HCD is an equipment operation service provider in China. It provides services covering the full cycle of projects.
• In our previous note, we looked at the company’s past performance. In this note, we take a look at the company’s refiled PHIP updates.

• We estimate that BILI’s 1Q23 rev./adj. net income are 3%/11% vs cons. 
• We raise gaming/ads revenue starting from 2Q23 because of 1) an increasing number of newly approved games; and 2) increasing possibilities that pre-roll ads could be launched. 
• Yet, we still maintain SELL rating and TP unchanged because of concerns about its content ecosystem. Our TP implies 1.7X PS in 2023.

• We’re down to the pointy end of AAG Energy Holdings (2686 HK)‘s Scheme. And at a gross/annualised spread of 15.6%/318%, all is not well.
• The uncertainty is not without substance. A derisory Offer, one that is rejected by a proxy advisor; together with a silent, large shareholder no one seems to know.
• Shareholders go to the vote this Thursday, the 27th April. Currently trading 5% below the undisturbed price.

• This insight is a short note that aims to ride on short term momentum for the stock
• Since April, southbound trade contributes to 72% of China Mobile H-share turnover.  So, southbound trade is the major share driver
• For entire market, A-share is trading at 40% premium to H-share.  For China mobile, the A/H premium is currently at 80%. Strong upside for H-share if premium is to narrow

• We estimate that Tencent 1Q23’s rev./non-IFRS net income beat cons. by 3.6%/4.5%. We forecast that VAS/ads/others will have 6.5%/15.3% /17.6% YoY growth in 1Q23. 
• We maintain BUY rating for Tencent because of 1) video account, especially the rapid growth of Wechat Beans (微信豆); and 2) recovery of ads revenue from Ecommerce and gaming.
• We remove Tencent from our top buy ideas because: 1) current consensus has been high; 2) lack of hit title in upcoming pipeline; and 3) launch of DNF casts shadow

• Lalatech Holdings Co Ltd (LALA HK) is a technology driven logistics transportation platform with a global footprint. The company has filed for an IPO and plans to raise about US$1bn.
• The company’s financials have shown significant improvement over the last 2 years with the company turning profitable at the operating profit line in 2022.
• Huge drop in selling and marketing costs have helped cut down losses which seems too realistic and the company hasn’t provided sufficient explanation on these cost cuts.

• With three trading days left in the review period for the CSI 500 Index (SH000905 INDEX) June rebalance, we forecast 50 changes at the close on 9 June.
• There is a big sector skew in the potential changes. We estimate a one-way turnover of 10.77% at the June rebalance resulting in a one-way trade of CNY 6.28bn.
• The potential adds have outperformed the potential deletes but there has been a big selloff in the last couple of weeks as the market has headed lower.

• Horizon Construction Development (1887128D HK)/HCD, a subsidiary of Far East Horizon (3360 HK), is pre-marketing an HKEx IPO to raise US$200-250 million, according to press reports.
• HCD is the largest equipment operation service provider in China in terms of revenue in 2021, according to Frost & Sullivan.
• The key elements of the bull case rest on market share gains, an anticipated post-COVID recovery boost, high revenue visibility, stable operating margin and young equipment life.

• The census and statistics department data for watches and jewelry showed a sharp rebound for HK in Jan-Feb 2023 (up 63% YoY). China sales, we estimate, continue to be resilient.
• Over the last month, secondhand watch pricing has also shown an uptrend of 3-4%. This leads us to believe that demand is having a decent uptick in April. 
• The stock trades at 7.2x PE FY23e, with >50% of the market capitalization in cash and a 15% dividend yield (assuming a 100% payout ratio). 

• At TMA we deliver high probability outcomes by focusing on our 3 pillars of technical analysis. 1) Response to key levels. 2) Price action. 3) Momentum confirmation.
• Throughout Q4 2022 / Q1 2023 each material turning point has been confirmed by a definitive weekly reversal pattern. Last week produced a definitive bearish weekly reversal pattern. 
• Long-Term charts imply that MXEF has entered a sustainable multi- quarter uptrend. Last week’s bearish weekly confirmation however, confirms risk of a further counter-trend correction in the coming weeks.

• We see the recent sell-down of CIMC Enric Holdings (3899 HK) unjustified. 1Q23 revenue grew a healthy 19.6%, and management indicated excellent margin expansion as well. 
• New orders signed accelerated in Mar to 21.6%, from just 10.7% in Jan-Feb. Its order backlog reached Rmb18.9bn (+22.3%). For hydrogen business, new orders even grew 61%. 
• Guidances are for double-digit revenue growth in FY23, and besides better gross margin, lower tax rates have benefited net margin. We estimate 1Q23 profit may have increased ~50%.

• UMP Healthcare (“UMP”) is Hong Kong’s leading private medical service network. Its network spans 1100+ service providers, 1mm+ scheme members, 2000+ contract customers, and over 1.13mm+ annual clinic visits.
• Despite the consistent track record, UMP trades at a 61% discount to its IPO price, 6x PE, and 8% yield with 45% of its market cap in net cash. 
• We see ingredients in place for a multi-year re-rate, backed by HK’s new Healthcare Policy and the company’s strategic tilt towards higher margin service lines supporting future profit growth.