China Archives | Page 54 of 154 | Smartkarma

• China Shenhua Energy Co H (1088 HK) could replace Country Garden Holdings Co (2007 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the June rebalance.
• Short interest on China Shenhua Energy Co H (1088 HK) is pretty small while the short interest on Country Garden Holdings Co (2007 HK) is large and possibly getting bigger.
• The change could result in a big increase in the fair value for the HSCEI 2023 dividend futures. Currently, we estimate an increase of up to 9 DIPS.

• After rallying a fair bit at the beginning of 2023, we have seen sharp pullbacks in Eva Precision Industrial Holdings (838 HK) and China MeiDong Auto (1268 HK) share prices.
• We believe the price cuts highlighted by Victoria Li in her insight China Auto: ICE Price War Triggered by Dongfeng, JV Players Under Pressure are a significant cause. 
• While we like both stocks and they are cheap, we feel both companies will face short to medium-term pain in their businesses and share prices as the saga unfolds.

• Questionable marketing practices and cheap counterfeits could make TEMU a legal nightmare for Pinduoduo (PDD US).
• Meanwhile, SHEIN doesn’t seem ready to give in easily to the competition. Thus, TEMU could be a significant burden on Pinduoduo’s profitability in the medium-long term.
• Considering the discounts, advertisements and promotional spending done by TEMU in the fourth quarter, we think it is unlikely that Pinduoduo will meet the 4Q22 consensus OP of RMB 11.7bn.

• ZKH Group (ZKH US) is looking to raise about US$300m in its upcoming US IPO.  
• ZKH Group is a leading maintenance repair and operations (MRO) procurement service platform in China, according to CIC, providing one-stop MRO procurement and management services and digital and fulfillment solutions.
• ZKH Group’s revenue has been primarily driven by its product sales segment during the track record period. However, its GMV growth slowed dramatically and its sales growth doesn’t appear sustainable. 

• NWD has the highest gearing among all HK real estate names.  It has significantly underperformed since the rate hike cycle begun.  Now it has the biggest potential to rebound
• The stock is trading at attractive valuation, 0.27x P/B, like a distressed Chinese developer.  The major market concerns are potential earnings downgrade and dividend cut
• I am quite convicted on the stock for rebound given 1) company has clear de-leveraging plan 2) no plans for equity-raise 3) lots of corporate actions ahead to unlock value

• PAGD intends to switch from 2C model to 2B model and to reduce losses ASAP at the expense of revenue scale, so as to prove its profitability to the market. 
• B-End corporate customers with high quality and sufficient budget are limited. Once the growth of B-end corporate customers meets a bottleneck, its performance may face another decline.
• Despite the improving financial performance in 2022, we still think that we need to further observe the effect of strategic transformation and future performance of PAGD before making judgments.

• Recent pullback of Trip.com (9961 HK) has made this China’s tourism recovery play even more attractive.  Since end-Feb, consensus earnings forecasts have been upgraded by 19-20%.
• It is best positioned to capture the revival in China’s domestic and outbound travels. Forward booking data has pointed to very solid momentum over the next few months.
• We anticipate good margin expansion going forward, and its resilient financial position provides opportunities for value-enhancing M&As. These all justify a premium valuation over peers. 

• ADICON Holdings Limited (ADI HK) is looking to raise about US$400m in its upcoming HK IPO. The deal will be run by Morgan Stanley and CICC. 
• Adicon Holdings is one of the top three independent clinical laboratory (ICL) service providers in China in terms of total revenue during the Track Record Period, according to F&S.
• It offers comprehensive testing services primarily to hospitals and health check centers through an integrated network of self-operated laboratories across China. 

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.

• Fosun International

• Grizzly Research LLC publishes a short selling report on ZTO.
• Meituan plans to shift car hailing from direct operation to a platform for third-party operators.
• Dada, which was acquired by JD.com last year, posts good 4Q22 results.

• Several news media outlets reported last week that Meituan (3690 HK) is restructuring its ride-hailing services business to cut down costs as top line growth is slowing down.
• Meituan launched ride-hailing services as a stand-alone app in 2017, it was merged into Meituan Super App in 2019. Relaunched as a stand-alone app in 2021 following Didi’s app removal.
• Meituan has increased its headcount to compete with Douyin while has started hiring riders to launch services in Hong Kong which would likely to further drag down margins.

• Total revenue increased by 41% YoY and revenue from external customers increased by 69% YoY in 4Q22.
• We believe total revenue will grow by 26% in 2023 and 17% in 2024.
• We also believe the stock has an upside of 58% and a price target of HK$20.

• Several original shareholders reduced their holdings of Mindray, which indicates that the senior executives and major shareholders aren’t optimistic about Mindray’s outlook, putting the Company’s long-term growth under scrutiny.
• Mindray’s performance in overseas markets could be under pressure, which is an uncertain factor to drag down this year’s performance growth. Supply chain issue would hinder Mindray’s breakthrough in high-end fields.
• Performance slowdown could continue if without breakthroughs in new growth points or internationalization. Our forecast on 2023 growth is about 15%-18%. Mindray’s valuation may fall back to 30-35 PE TTM.

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.

• Adani Transmission
• Country Garden Holdings Co

• We are concerned that BZ will incur higher sales marketing cost to maintain its increasingly sluggish MAU growth. 
• We expect BZ to post C4Q22 revenue 2% higher than consensus, but with non-GAAP net margin 5.7ppt lower, due to lower GM and higher S&M.
• We downgrade BZ from BUY to SELL rating, and cut TP to US$12.4, imply 51x PE in 2023, and the stock currently trading at 76x PE in 2023.

• The review period for the June rebalance ends 30 April. We expect the changes to be announced 26 May with the implementation taking place after the close on 9 June.
• We expect the index committee to continue using a 6-month minimum listing history resulting in two changes to the index.
• One way turnover is estimated at 1.6% resulting in a one-way trade of CNY 1,442m. The impact on the deletions will be larger than that on the inclusions.

• Based on our recent checks, we expect that Tmall sales in the march promo were weaker-than-expected, especially in apparel and beauty make-up. 
• Meanwhile, we maintain our prior forecast for Douyin’s overall eCommerce growth, and we expect that Douyin Mall’s share of Douyin eCommerce GMV is now higher than we previously estimated.
• We cut the GMV growth of Taobao and Tmall from 4.4% YoY to 1.4% YoY in FY24, and cut BABA’s TP to US$ 100, implying 12.6x FY23 PE.

• As a background, can I refer the reader to Substack Note No One Cares 有中国特色 Real Estate Liquidity Spiral to Solvency Challenge 31st October 2022 ?
• It bottoms ticked recovery in the highly leveraged Real estate Index Hang Seng Mainland Property Index (HSPMI) and rallied 103% from trough to peak 27th January 2023.
• The mainland listed Index CSI 300 Real estate (CSI300RE) trough (1^st November) to peak (27^th November) was 43.5%.

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
• Road King Infrastructure
• Sunny Optical
• Vedanta Resources
• Yanlord Land

• Bloomberg reported that PAG and other parties have expressed interest in taking ASM Pacific Technology (522 HK) private. PAG also sounded out several lenders.
• ASMPT has three substantial shareholders (Asm International Nv (ASM NA), FIL Limited and Schroders PLC (SDR LN)) which suggests a requirement for a reasonable takeover premium.
• ASMPT previously denied a privatisation rumour in 2020. Nevertheless, peers and historical multiples imply a fair price range of HK$82-97 per share, 11-31% premium to the last close.  

• After two months of zero buybacks under their HK$4bn buyback programme, on Friday Swire Pacific (A) (19 HK) | Swire Pacific (B) (87 HK) again bought back shares.
• Ostensibly, it was as Swire A shares fell below HK$60/share. They were 65% of B volume and 51% of A volume on Friday – not shy about their return.
• Assuming participation patterns normalise and the shares don’t bounce back above the self-imposed limit, the buyback will probably last 6-7 weeks more. The div arb is real if you hold. 

• Dai Nippon Printing (7912 JP) is a range trade. The juice is in the speed of the Corporate Buyback and how excited people get.
• With the renewal of the gaming concession in the bag and Melco Resorts (MLCO US) up 128% in the past six months, Melco (200 HK) has extracted ~HK$2.5bn from MLCO.
• Hosokawa Micron (6277 JP)‘s current PER of 9.9x ignores that net cash and securities holdings is about half of market cap. This is a cheap stock.  

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• IPO activity appears to be picking up across the region, with deal in Japan, Hong Kong, US and Indonesia being lined up.
• Placements as well picked up pace, despite the ongoing Japan Post Bank (7182 JP)‘s mega deal set to suck liquidity out of the system for a while. 

• 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

• Melco Resorts & Entertainment (MLCO US) has entered into a share repurchase agreement with a wholly-owned entity of Melco International Development (200 HK) to repurchase (and cancel) 40.37mn shares for US$169.8mn.
• Melco’s effective holding will decline to 51.7% from 53.1% currently. This is the second parent/sub repurchase agreement in the last 7 months. 
• MLCO’s previously announced US$500mn share repurchase program remains unaffected by this privately negotiated transaction, with US$412mn still available for future repurchases under the program.

• Playmates Toys (869 HK) just published its FY22 results showing a decrease in revenues of 19% but a consistent dividend of 2c HKD
• More importantly, it shared more details about the TMNT upcoming movie launch
• Reiterate thesis that upon TMNT relaunch Playmates toys could be a major beneficiary

• In C4Q22, JD reported in-line total revenue and beat in profit. We trimmed down our forecast on C1Q23 total revenue by 4% due to slower-than-expected rebound in retail spending. 
• JD is shifting its strategy to be more focused on low price and user, and we suggest that the repositioning period could be painful for the company.
• We cut our revenue forecast by 5%. Our estimates on top and bottom lines in 2023 are (6%) and (28%) below cons. Maintain SELL rating and cut TP to US$27.

• Through operating luxury shopping malls in China, Hang Lung Properties is the only HK-listed stock that provides exposure to the China luxury consumption story.  It is trading at attractive valuation.
• Major concerns are 1) leakage of retail sales after re-opening and 2) impact on luxury consumption from negative wealth effect.  Most of the risks are priced in at current valuation.
• Short-Term, China consumption will recover post-COVID as consumer sentiment rebounds.  Long-term, the structural story of China consumption remains intact, supported by growing middle class and increasing disposable income and savings.

• In C4Q22, JDL reported in line results for both revenue and profit. In C1Q23, we expect JDL’s topline growth continue to decelerate due to decline of parcels. 
• JD has adopted the low-price strategy, which hinders the growth of JDL. The price competition in eCommerce negatively affects JDL but benefits ZTO.
• We cut our 2023 revenue forecast by 6%, which is (5%) below cons. Downgrade JDL to SELL with TP of HK$10.

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. China SCE
2. Road King Infrastructure
3. Sino-Ocean Group
4. Greentown China
5. Anton Oilfield

and more…

• Following Jehoshaphat’s allegations that profits are inflated dramatically over a decade with manipulative accounting, Techtronic Industries (669 HK) has issued a rebuttal clarifying that the accusations are without any merit.
• TTI’s beyond comparison performance is due to world class brands such as Milwaukee, Ryobi and Hoover which have helped top line grow at 13% CAGR over the past 13 years.
• Nevertheless, we have assessed some of the company’s clarifications here which seemed too good to be true.

• There were some positive takeaways from Swire stable’s set of FY22 accounts; however, the Hong Kong office segment faces increased vacancy rates, and new supply in 2023.
• Preceding my comments on Swire 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%.

• JD’s revenue growth rate reached its historical low in 2022, but we believe it will recover in following two years.
• JD’s operating margin hit its historical high in 2022 and we believe the improvement will continue.
• We believe EPS will grow by more than 100% in 2022 and the stock has an upside of 42%.

• Shougang Fushan Resources (639 HK) trades at 4.5x/5.1x FY22e/23e with 50% of the market cap in cash and a 17.8%/15.8% FY23e/24e dividend yield (based on an 80% payout ratio).
• Since our call in FY21, close to 64 cents of the share price (25% of the current share price value) has been returned as dividends making it a dividend machine. 
• We forecast at least another 70 cents of dividend for H2 FY22 and FY23, bringing the dividend in 3.5 years to more than half the current share price. 

• Yashili International Holdings (1230 HK) announced that the pre-condition is satisfied – around 10 months since the 6 May 2022 announcement of China Mengniu Dairy Co (2319 HK)’s HK$1.20 offer. 
• Yashili has received an extension for the despatch of the scheme document to a date no later than 31 August. We think the scheme document is despatched by early April.
• The scheme risk is low. At the current price and for a late May payment, the gross and annualised spread is 2.6% and 12.2%, respectively.

• Fangda Carbon New Material Co, Ltd. (600516 CH) is looking to raise around US$124m in its Swiss GDR listing. Huatai is the sole bookrunner in the deal.
• The firm is offering 13.91m GDRs (1 GDR to 10 A-shares) for sale at US$8.63-8.9/GDR, or at a 8.3-11.1% discount to last close on the A-share leg.
• As per the firm, it plans to use the net proceeds from the offering to support its business expansion, repay debt, supplement working capital and for general corporate purposes.

• JF Wealth Holdings (9636 HK) raised around US$129m in its Hong Kong IPO.
• JF Wealth (JFW) is an online investment decision-making solution provider in China, focusing on the online investor content services market.
• We have covered various aspects of the deal in our previous notes. In this note we will talk about the demand and trading dynamics.

• After giving up the IPO plan late last year, DPC Dash (1405 HK) has restarted its IPO with hopes of capitalising on China’s reopening boom.
• DPC Dash is not positioned to benefit from the ending of lockdowns. It also didn’t outperform Pizza Hut when dine-in demand was absent.
• Therefore, DPC Dash is likely going to remain a minor player in a segment dominated by Pizza Hut.

• The 25% stake sale/acquisition in Yashili International (1230 HK) was expected five business days after the Dumex China Disposal  – and that is what transpired. This satisfies the Scheme conditions. 
• After ten months, Danone (BN FP) offloaded its chilled dairy business, acquired Yashili’s Dumex China baby formula ops, and offloaded its 25% stake in Yashili to China Mengniu (2319 HK).
• Now Yashili minority shareholders will get their chance to vote for China Mengniu’s Scheme, potentially in early May. 

• What may appear duplicative asset segment in MGM actually spreads risk and improves overall margin of safety for both stocks.
• MGM China is a pure Macau play while MGM Resorts International is a strong bet on global reach of its gaming properties.
• Buying both is insurance against a possible recession downside because of the geographically and demographically diverse customer bases of both enities.

• In early February, Link REIT (823 HK) announced it would do a 1 for 5 rights offering, with the Exercise Price well below TERP.
• The REIT units dropped in price as the already unlevered REIT was not seen to be needing further deleverage and early debt repayment in a rising rate environment.
• Units went ex-Rights on 24 February. The rights start trading tomorrow. That means flows. Of multiple kinds. Worth thinking about.

• The HSCEI 2023 dividend futures have moved up over the last few months though there was a sharp move lower in the last couple of weeks.
• With results and dividends scheduled to be announced in the next few weeks, we take a look at the fair value estimate for the 2023 dividend futures.
• We also list out the things to watch for over the next few weeks and months that could impact the 2023 dividend futures and the 2023/24 dividend steepener.

• JD Health’s dependence on direct sales business wouldn’t change. But the gross profit of prescription drugs is low. If JD Health increases its revenue proportion, overall gross margin would decline.
• The business supporting JD Health’s high growth in the future is more dependent on the second growth point, but we haven’t seen any new business with high certainty so far.
• The essence of JD Health’s business is “product sale e-commerce” rather than “a comprehensive online healthcare platform” at the current stage, which cannot support high valuation in our view.

• Shum Yip Property Operations Group (SYPOG HK) is looking to raise about US$200m in its upcoming Hong Kong IPO.
• Shum Yip Property Operations Group (SYPOG) is a property management, commercial operational and city services provider in China.
• As per Frost & Sullivan (F&S), the firm was eighth among comprehensive property management, commercial operational and city services providers in China as per 2021 revenue.

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
• Stocks mentioned include Lenovo (992 HK), CLP Holdings (2 HK), GoFintech (290 HK), and North Asia Strategic Holdings (8080 HK).

• DPC Dash (1405 HK) aimed to raise around US$75m in its Hong Kong IPO in December. The company is now back with a revised PHIP which incorporates its FY22 performance.
• The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 562 stores across 13 cities, as of Nov 2022.
• In this note, we talk about the updates from its refiled PHIP.

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 SCE
• Greentown China
• Lippo Malls Indonesia Retail Trust
• Road King Infrastructure
• Sino-Ocean Service

• The March rebalance of the HSI, HSCEI and HSTECH indices will use today’s closing prices to cap the index constituent weights at 8%. This will lead to large flows.
• The largest inflows will be on Li Auto (2015 HK), Meituan (3690 HK), XPeng (9868 HK), JD.com (9618 HK), Alibaba (9988 HK), BYD (1211 HK) and Kuaishou Technology (1024 HK). 
• The largest outflows will be on Tencent (700 HK), HSBC Holdings (5 HK), Baidu (9888 HK), Xiaomi Corp (1810 HK), NetEase (9999 HK), CNOOC (883 HK) and SMIC (981 HK).

• On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.
• At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares. Its value has since declined to US$17bn.
• In this note, we talk about the implications of the deal and what one can glean from looking at the previous dividend payout for JD.com.

• From the time of Tencent (700 HK) announcement of the in-specie dividend, Meituan (3690 HK) has underperformed Tencent (700 HK) and Alibaba Group (9988 HK) by around 35%.
• Surprisingly, short interest on Meituan (3690 HK) has dropped in the last few months as the stock has continued to drop.
• As with JD.com Inc. (9618 HK), Prosus (PRX NA) could sell Meituan (3690 HK) in the months following settlement. Or they could remove the overhang by placing a block.

• On 24 February 2023, the Hang Seng Indices released their changes for the March rebalance. No changes in HSI, which was unexpected, and small changes elsewhere.
• Capping flows and the rule changes on treatment of Dual Primary Listed stocks are responsible for the interesting flows. Yesterday’s closing prices are used for final capping.
• Li Auto (2015 HK) and XPeng (9868 HK) are the interesting trades. Still. 

• JD launched “10bn subsidy” campaign on March 5th. Smartphone and electronics is the main product category and the prices for comparable products are relatively the same as PDD. 
• We estimate that total GMV generated from subsidized products may reach to about 1.5% in 2023, and the incremental cost will be about RMB5bn in 2023.
• We cut our forecast of JD’s non-GAAP net income to RMB21bn in 2023, which is 34% below cons. Maintain SELL with an updated TP of US$42, which implies 22x P/2023E.

• 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.
• The 2021/2023 period has produced definitive evidence of bullish LT trend change. We see this in both trend structure and also LT momentum triggers.
• Since 2015, peaks have been in the 8.50/11.00 range. Conservatively, the 2023 uptrend targets the top of the parallel uptrend channel in the 7.25/7.45 range (20%+), likely in H2 2023.  

• We expect NIO to see a share loss in 2023 due to 1) late delivery of its key models; 2) conservative channel expansion plan; 3) uncompetitive pricing. 
• We see headwinds for NIO’s 2023 GPM, including 1) ~10% discount on its legacy models in Q1; 2) weaker product mix toward low-price ET5 into Q3.
• 3) limited expansion of scale economy due to diminished momentum. ● DG to SELL for weak momentum and ongoing margin pressure into 3Q22.

• AISpeech is a high-tech start up specializing in computer speech recognition and AI chip design in China.
• The company is developing intelligent voice interaction technology designed to improve human-machine interaction. It is also developing human-computer dialogue operating system and artificial intelligence chip modules to improve speech recognition.
• AISpeech is in the process of listing in the Shanghai Star Market, aiming to raise about US$1.5 billion.

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.

• Anton Oilfield
• Central China Securities
• Yuexiu Property

• JD’s “10bn subsidy” program mainly subsidizes uncleared stale (avg. 339 days since launch) Xiaomi smartphone inventory for JD’s 1P/3P distributors but is not conductive for incremental Xiaomi unit demand. 
• Although JD subsidies help clear stale inventory, Xiaomi itself doesn’t benefit as these devices were sold last year and were already considered a sale.
• JD’s program is not conductive of unit volume sell-through for new Xiaomi phone sales given its shallow breadth of stale SKU.  Re-iterate our SELL rating and HK$7.3 TP.

• Chinese carpooling platform Dida (DIDA HK) has refiled for an IPO on the HKEx for the second time (in 2020 and 2021) and could raise around US$200m through the IPO.
• Dida’s last two attempts were not successful and some news media outlets reported that Dida has got assurance from regulators to go ahead with the IPO.
• In this insight, we take a look at the new data points from the company’s latest IPO filings.

• Two JD.com departments began to try fresh food front-line warehouse again.
• Radio and Television Administration plans to clean the content in short video.
• Herman Yu, Baidu’s chief strategy officer and formerly CFO, just resigned.

• BILI’s 4Q22 top line was basically in line, while non-GAAP net loss beat cons. by 8.28%. We largely dial down 2023 revenue forecast. 
• Moreover, we also suggest that recent meeting by the National Radio and Television Administration (NRTA) to curb short video addiction for minor protection would heavily impact BILI.
• Maintain SELL and cut TP to US$ 15.4, which implies 1.85X PS in 2023.

• Luckin Coffee reported its 4Q22 revenue, non-GAAP operating income, and non-GAAP net income (9.1%), (11.4%), (57.9%) lower than our estimate. 
• The store temporary close due to Covid impact is the main reason for revenue miss, and the higher income tax payment is the reason for the miss on NI.  
• We expect Luckin to catch up the store expansion schedule in 1Q23 at 730 new stores, and reach to 10,500 total stores by the end of 2023. 

• Mobvoi uses AI technology to improve the next generation human-machine interaction. The company’s key partners include Google and Volkswagen.
• Mobvoi provides full-stack AI solutions for various hardware-software integration, voice interaction technology and engineering capabilities. The key sectors served include IoT, finance, telecommunications, F&B, and auto. 
• Since the founding of the company in 2012, the company has raised US$253 million in funding. Major investors in the company include Sequoia Capital, ZhenFund, SIG, and Google. 

• MP1000 has strong technical strength, setting it apart from Toumai. SP1000’s advantages are more obvious and the competitive landscape is also better than multi-port surgical robots, indicating corner overtaking opportunity.
• With favorable policy support, Shenzhen Edge Medical (SEM HK) is embracing a golden opportunity. But the commercialization outlook of surgical robots in China is actually not optimistic.
• As a later-comer in surgical robots industry, without the synergy from parent company, Edge’s future sales performance could be even weaker. So, its valuation should be lower than Medbot.

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
• Lippo Malls Indonesia Retail Trust
• NagaCorp Ltd
• Times China

• HKEX (388 HK) has announced that the expansion of Northbound Stock Connect eligible stocks will take effect from the start of trading on 13 March.
• 598 stocks listed on the Shanghai Stock Exchange and 436 stocks listed on the Shenzhen Stock Exchange will be added to Northbound Stock Connect.
• Currently, we see 43 stocks being added to the MSCI China Index in May (inflows of US$1.42bn), further increasing China’s weight in the MSCI Emerging Markets Index. 

• 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  21Vianet Group (VNET US),Alliance Aviation Services (AQZ AU), 111 Inc (YI US), Toyo Construction (1890 JP), Origin Energy (ORG AU), HKBN Ltd (1310 HK),  Jiangnan (1366 HK)
• Lowest spreads – Ihara Science (5999 JP), Nitro Software Ltd (NTO AU), GK Goh Holdings (GKG SP), Boustead Projects (BOCJ SP), Techno Associe (8249 JP), Nissin Electric (6641 JP).

• It’s unrealistic to turn losses into profits by relying on BRUKINSA alone. BeiGene needs to have three blockbuster products with US$1 billion sales, which is difficult considering current pipeline situation. 
• If investors are optimistic about BeiGene, to some extent, they are betting on the success of BeiGene’s model, but of course, they should also bear the corresponding risks and costs. 
• BeiGene is overvalued, and its current market value has already priced in all positive factors. In this position, we think the risks far outweigh the benefits, because miracles don’t always happen.   

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
• China Vanke
• Hopson Development