China Archives | Page 66 of 154 | Smartkarma

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
• Country Garden Holdings Co
• Longfor Properties

• 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

• On Friday, MSCI announced the changes to its indices as part of the November SAIR. Most changes were expected, but there were a few surprises.
• Friday was also the review cutoff for the FTSE Dec QIR. Next Friday has announcement of changes to the Hang Seng, Sensex and FTSE indices.
• Big inflow to iShares Core MSCI Emerging Markets ETF (IEMG US) during the week as inflows to IShares Edge MSCI Min Vol Emerging Markets ETF (EEMV US) continue.

• No substantive progress is achieved on Brilliance Group’s bankruptcy restructuring so far.
• Besides estimated max Rmb6 per share, or HKD6.5 per share special dividend 2022E, shareholders may get more cash dividends in the next few years
• Our enterprise value analysis shows Brilliance China’s fair value could be as high as HHD21.9 per share, including estimated HKD6.5 per share special dividend 2022E.

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• On the IPO front,  Indian IPOs continue to trickle in, while other regions appear to be waking up from their slumber.
• There were a few GDR issuances this week, along with another placement in Axis Bank Ltd (AXSB IN) and a number of lock-up expiries. 

• 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. However, such disclosures are by no means an absolute. 
• These insights may flag those companies where shares have been pledged. Stocks mentioned include C C Land Holdings (1224 HK), Impro Precision Industries (1286 HK), and SingAsia Holdings (8293 HK).

• Lygend Resources & Technology (LR HK) is looking to raise about US$600m in its upcoming Hong Kong IPO.
• Lygend Resources & Technology (Lygend) is a nickel trading and production firm with a portfolio covering multiple areas across the nickel industry value chain.
• In this note, we will look at assumptions, and share our thoughts on valuation.

• Company fundamentals have been and will continue to be the single most critical driver for BABA’s share price, although strong US dollar and geopolitics may complicate the situation.
• Expect BABA’s bottomline to reverse an eight-quarter down trend in coming September quarter on the back of disciplined capex and cost cutting, despite a challenging macro environment still pressuring topline.
• Importantly, investors have yet fully appreciated the improving competitive landscape thanks to regulation and rivals’ maturing businesses. See 30% upside in 6-12 months. Ripe timing to buy. 

• Lygend Resources & Technology (LR HK) is looking to raise about US$600m in its upcoming Hong Kong IPO.
• Lygend Resources & Technology (Lygend) is a nickel trading and production firm with a portfolio covering multiple areas across the nickel industry value chain.
• In this note, we look at peers and undertake a peer comparison.

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 Jinmao Holdings
2. Guangzhou R&F Properties
3. Sunac China Holdings
4. Evergrande
5. Central China Real Estate

and more…

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 Jinmao Holdings
2. Guangzhou R&F Properties
3. Sunac China Holdings
4. Evergrande
5. Central China Real Estate

and more…

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

The Chinese Property Weekly focuses on providing updates in the Chinese real-estate sector, including recent regulatory and company developments, top and bottom performers, rating actions, as well as a list of bond maturities in the next 30 days.

• Wish had more conviction for writing this update. The framework for determining if the bounce is durable or if a trend reversal has occurred is not working or is not clear.
• Stocks that could see tailwinds and drivers for a sustained rally do not have the Volume to confirm the trend change.
• At the same time, stocks with massive headwinds and structural issues have high Volumes.

• Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
• Overall, net inflowover the past week was ~US$0.26bn, split between Shanghai (+US$0.08bn) and Shenzhen (+US$0.18bn).
• The largest inflows were into Midea Group (000333 CH) and Shenzhen Mindray Bio-Medical Electronics (300760 CH). The largest outflows were in China Yangtze Power  (600900 CH) and Kweichow (600519 CH).

• Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry
• Overall, the net inflow over the past week was ~HK$4.1bn, split (+HK$1.7bn) for Shanghai and (+HK$2.4bn) for Shenzhen.
• The largest inflows were in Tencent (700 HK) and Wuxi Biologics (2269 HK). The largest outflows were inKoolearn (1797 HK)and China Mobile (941 HK).

• MSCI announced the changes as part of the November SAIR. For Asia Pacific, there are 48 adds and 55 deletes (including one nationality change).
• The deletion of Wharf Holdings (4 HK) is the biggest surprise. The stock should trade weak given the large flow and days of ADV to sell.
• There are listing changes for BeiGene (BGNE US), Li Auto (LI US), Xpeng (XPEV US) and Hutchison China MediTech Ltd (HCM US) to their Hong Kong listed lines.

• Tencent are due to report earnings next week on Nov 16th
• Implied vols are bid up into the event causing an inverted term structure
• We see an opportunity to buy long calendar spreads to play a reversion in vol surface

• Chinese carmaker BYD Co. Ltd. has unveiled its first luxury brand of electric vehicles (EV), joining its peers in efforts to impress wealthy domestic buyers
• The launch marks BYD’s latest step into the high-end auto market as it tries to outgrow its image as a manufacturer of mid- to low-end vehicles
• BYD is China’s largest EV and hybrid vehicle manufacturer by sales. In October, its wholesale shipments surpassed 200,000 for the second consecutive month

• Acceleration in earnings growth at Haier Smart Home Co Ltd (6690 HK) is an encouraging trend. We are happy to see expansion in both gross and operating margin in 3Q22.
• Further channel additions for Casarte and digitalisation efforts will bring positive profitability impact. Meanwhile, we welcome HSH’s increase in engagement of suppliers in product design process.
• Overseas growth has also accelerated in 3Q22 and there are numerous opportunities for HSH to expand its high-end presence and introduce new products in developed country markets. 

• We analyzed three main factors to drive high performance growth of Tofflon in recent years, but these factors have become untenable. The remaining opportunity mainly lies in import substitution.
• Every explosive growth of Tofflon benefits from positive industry trend, whose periodicity is obvious. It’s not a good investment opportunity for long run,but a staged investment opportunity in short term.
• Tofflon is in the transition from explosive growth to steady growth. The change in industry demand would suppress valuation system. Buy low and sell high,rather than hold for long time.

• We believe the revenue growth will recover from zero in 1Q23 to 4% YoY in 2Q23.
• We believe the operating margin will improve in the following two years because the company is cutting unprofitable businesses.
• We set an upside of 43% according to other retailing giants’ price / sales ratios.

• Hangzhou Great Star Industrial Co., (002444 CH) is looking to raise around US$150m in its Swiss GDR listing. Huatai is the sole bookrunner in the deal. 
• The firm is offering 11.5m GDRs (1 GDR to 5 A-shares) for sale at a 16.1-18.7% discount to last close.
• The deal would represent just 2.3 days of three month ADV and 4.3% of the firm’s current mcap.

• Shanghai Pharmaceuticals Holding (2607 HK) reported strong result for the first nine months of 2022, with revenue increasing 8.5% to RMB174.6B. Notably, total revenue growth accelerated to 13% in 3Q22.
• With a leading market positioning and nation-wide distribution network, the company is well-positioned to benefit from the sector tailwinds. Easing of restrictions will provide a major impetus to the company.
• The company has been improving its innovative drug pipeline. It has 42 innovative products in its pipeline, six of which are in pivotal studies.

• Beijing Sinohytec Co Ltd (688339 CH) (BSH) is looking to raise up to US$400m via its H-shares listing.
• BSH provides fuel cell systems in China, focusing on the design, development and manufacture of fuel cell systems and stacks mainly for commercial vehicles, such as buses and trucks.
• In this note, we talk about the company’s past performance and other deal dynamics.

• We believe Tencent’s revenue will stop declining in 3Q22 and bounce back thereafter.
• We believe FinTech will grow fast, but online game will still be stagnant.
• We expect Tencent will have an upside of 67% for year end 2023.

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
• China Fortune Land
• Country Garden Holdings Co
• Kawasan Industri Jababeka
• Longfor Properties
• Medco Energi

• The majority revenue of Shanghai Pharmaceuticals comes from pharmaceutical distribution business, but the pharmaceutical manufacturing business has much higher gross margin,which drives up the overall profit margin of the Company.
• Due to VBP, profit margin is under pressure. Weak demand for COVID-19 vaccines, decreasing long-term profitability and concerns on synergistic effect of cooperation with Yunnan Baiyao cast doubt on outlook.
• Compared with peers, the valuation of Shanghai Pharmaceuticals doesn’t show decent upside potential. High valuation expectations cannot be supported due to industry trend. Its share prices could underperform.

• Jinke Smart Services (9666 HK)’s VGO from Boyu Capital at HK$12.00 per share has been declared unconditional. Boyu has waived the 7.71% valid acceptances condition. 
• Boyu has likely two aims for the unusual VGO – secure anti-trust approval and a re-rating by becoming the largest shareholder. Anti-trust approval was received on 8 November.  
• Acceptances of 0.0081% of outstanding shares reflect the unattractive offer. The final closing date is 22 November. At the last close price, the spread to the offer is 2.7%. 

• Back on the 27th of September, PRC-incorporated property management play Jinke Smart Services (9666 HK) announced a voluntary cash offer from Boyu at HK$12/share, a 33.04% premium to last close.
• The Offer was contingent on SAMR and 7.71% of shares out tendering. Matters were somewhat complicated by Boyu buying 7.15% of shares out before dispatching the Composite Document. 
• Jinke has now announced SAMR approval and waiving the acceptance condition. The Offer is unconditional. The final closing date is the 22nd of November. This may trade through terms. 

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
• Country Garden Holdings Co
• Kawasan Industri Jababeka

• We summarise the latest spreads and newsflow of merger arb situations covered by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads – Alliance Aviation Services (AQZ AU), 21Vianet Group (VNET US), 111 Inc (YI US), Pendal Group (PDL AU), Genex Power Ltd (GNX AU), O2Micro International (OIIM US).
• Lowest spreads – Tyro Payments (TYR AU), Nitro Software Ltd (NTO AU), Tassal (TGR AU), OZ Minerals Ltd (OZL AU), China Vast Industrial Urban Development (6166 HK), PTB.

• 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

• 3Q22 result of Kunlun Gas is weaker than expected, but this is due to lower other income and surge in non-operating expenses. Without them, profit growth is actually more encouraging.
• While there is gross margin squeeze on higher input costs, Kunlun managed to reduce operating costs by 14.1%, successfully mitigated the negative impact.
• Kunlun Gas contributed 62.5% of 1H22 net profit of Kunlun Energy (135 HK). Its solid 36.2% 9M22 earnings growth still points to healthy underlying momentum for its parent.

• Akeso has made some business progress. We analyzed the commercialization outlook/concerns on its late stage products. Akeso still stays at the level of biotech, a long way from becoming biopharma.
• The core challenge is whether bispecific antibody can bring better marginal clinical benefits than the combination of two mab, and why patients are willing to pay higher price for them?
• The sales forecast of Akeso’s late stage products could be RMB2 billion to RMB3 billion. The market value by the end of Nov 4 was just reasonable but not undervalued.

• Tencent and Alibaba are rumored to be acquired by state-owned companies.
• Tencent charges for originally free function and JD.com re-organized to cut cost.
• Autohome’s revenue stopped declining in 3Q22 and it is time to accumulate.

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.

• ABM Investama
• NagaCorp Ltd
• Times China
• Yuexiu Property

• 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. However, such disclosures are by no means an absolute. 
• These insights may flag those companies where shares have been pledged. Stocks mentioned include Cross Harbour (32 HK), C C Land (1224 HK), and Zhuguang Holdings Group Co (1176 HK).

• Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
• On the IPO front,  a number of companies in India have launched thier IPOs recently, even as HK and rest of Asia remains dormant.
• The only notable placement this week was the selldown in Axis Bank Ltd (AXSB IN) by Bain Capital.

• Since our note in April China Meidong: Back the Porsche at 20 HKD, the company is down greater than 50% despite improving fundamentals due to bearish sentiment on China.
• The stock trades at 11.3x/6.4x FY22/23e PE. Assuming an 80% payout ratio, the stock has a 7.1%/12.5% dividend yield for FY22/23e. We believe there is an upside to the payout.
• Checks with the company suggest Porsche sales are robust in the high double digits, and the company has overall accelerating revenue trends since Q1 2022. 

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. Melco Resorts & Entertainment
2. Lenovo
3. China Jinmao Holdings
4. Lifestyle International Holdings
5. Geely Auto

and more…

• Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
• Overall, net outflow over the past week was ~US$2.4bn, split between Shanghai (-US$1.15bn) and Shenzhen (-US$1.25bn).
• The largest inflows were into CATL (300750 CH) and Pylon Technologies (688063 CH). The largest outflows were in Kweichow Moutai (600519 CH) and Inner Mongolia Yili Industrial Group (600887 CH).

• Inside is a recap of movements in the last week relating to the Shanghai and Shenzhen-Hong Kong Stock Connect facilities, broken down by company and industry.
• Overall, the net inflow over the past week was ~HK$3.4bn, split (+HK$1.58bn) for Shanghai and (+HK$1.82bn) for Shenzhen.
• The largest inflows were in Tencent (700 HK) and Meituan (3690 HK). The largest outflows were in Hang Seng H Share Index (2828 HK) and Gcl New Energy (451 HK).

• Chinese social media giant Tencent Holdings Ltd. and state telecom operator China Unicom were cleared by the country’s antitrust regulator to set up a joint venture to develop data and cloud-related businesses.
• The new business, one of 15 investment deals that cleared antitrust review Tuesday, will focus on content delivery networks and edge computing.
• The partnership is another tie-up between Tencent and China Unicom after a 2017 investment in which the social media giant acquired a 5.18% stake in the telecom company.

• Tianqi Lithium (9696 HK) and JD Health (6618 HK) could be inclusions while XPeng (9868 HK) and Longfor Properties (960 HK) are near certain deletions.
• There are a few stocks that are close to the deletion threshold and could be deleted from the index if they continue to sell off over the next few weeks.
• Tianqi Lithium (9696 HK) is also a high probability inclusion to the FTSE All-World Index at the December rebalance. That will bring in additional inflows to the stock.

• The fake news about China reopen and the COVID-19 vaccine business are the major driving force for the rally of CanSino’s share price. However, such rally would not last long.
• CanSino didn’t perform well in Q3 and 2022 would be a difficult year for CanSino. The major turning point of CanSino performance still lies in MCV4, not COVID-19 vaccines. 
• CanSino’s H-share valuation has become more reasonable,but the downside risk in HKEX is hard to predict. Investors could consider offload and secure the gains. There’s better opportunity to long ahead.

• Giant Biogene has priced its IPO at HK$24.30 per share, at the lower end of the company’s indicative IPO price range of HK$24.3-27.7 per share and raised HK$495.8m (US$63.2m).
• The HK offering was oversubscribed by only 2.08 times while the international offering was subscribed by 4.22 times.
• Though Biogene’s IPO was priced attractively, we think lower demand for the company’s shares led to pricing at the bottom of the IPO price range.

• Apparently, China Communications Construction (1800 HK) has an uninspiring 3Q22, but this is mainly due to losses at concession projects and heavy credit and asset impairments.
• We estimate outstanding backlog at Rmb3.28trn, enough to cover 4.5x FY22F revenue. Expansion in 3Q22 gross margin, against declines in 1Q22 and 2Q22, is a positive development.
• Despite outperformance against major indexes YTD, CCCC still trades on 2.3x and 2.1x PERs for FY22-23. Its 0.16x P/B has overly discounted the value of underlying assets.

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
• Delta Dunia Makmur
• Greenland Holdings Corp
• Lenovo
• Melco Resorts & Entertainment
• MGM China Holdings