China Archives | Page 70 of 154 | Smartkarma

• Leapmotor (9863 HK) is looking to raise between US$800m-US$1.03bn by selling 130.82m shares at a price range of HK$48-62/share. Between 30-39% of the shares will be taken by cornerstone investors.
• The continued slide in its closest peers could put pressure on the stock post listing, though there could be some passive buying in December.
• Leapmotor (9863 HK) could be added to the HSCI and Hang Seng Tech Index (HSTECH INDEX) in December. Stock Connect could come online in December too.

• CALB aims to raise up to US$1.7bn in its Hong Kong IPO.
• CALB undertakes design, R&D, production and sales of EV batteries and Energy Storage Systems (ESS) products.
• In this note, we will run the deal through our ECM framework and talk about IPO pricing.

• Hong Kong’s leading property developer, Chinachem Group agreed to acquire a 56.15% stake in Pine Care Group (1989 HK) for HKD451.2 million ($57.5 million) from its controlling shareholders.
• Post-Acquisition, Chinachem will launch an unconditional mandatory offer for the remaining shares, which it does not hold at HKD0.89 per share, same as the purchase price.
• Considering delisting risk, limited upside potential of the shares after a huge run-up, and muted growth outlook of the company, investors should tender their holdings.  

• Jenscare is a China-based medical device company with a focus on structural heart disease. The company launched a deal to  raise up to USD 30m via a Hong Kong listing.
• In our previous note, we looked at the company’s product lines and provided a brief overview on the company’s valuation.
• In this note, we provide an update for the book building. We provide our quick thoughts on the valuation and deal dynamics.

• CALB (3931 HK) is getting ready to complete its IPO in early October in Hong Kong. The IPO price range is between HK$38 and HK$51 per share.
• Based on our valuation sensitivity analysis, our base case valuation of CALB is HK$53 per share, which is 20% higher than the mid-point of the IPO price range.
• CALB has a rare combination of surging sales growth rate, operating profitability, and increasing market share in the EV battery market globally.

• 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$1.4bn, split between Shanghai (-US$0.8bn) and Shenzhen (-US$0.6bn).
• The largest inflows were into Tianqi Lithium (002466 CH) and Midea Group (000333 CH). The largest outflows were in East Money Information (300059 CH) and Kweichow Moutai (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 ~US$1.1bn, split (+US$0.8bn) for Shanghai and (+US$0.3bn) for Shenzhen.
• The largest inflows were into Wuxi Biologics (2269 HK) and Tencent (700 HK). The largest outflows were in Geely Auto (175 HK) and HKEX (388 HK).

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.

• Lepu Scientech Medical Technology (Shanghai) (LSM HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by CICC. 
• Lepu Scientech Medical Technology (LSMT) is an interventional medical device provider in China for congential heart disease (CHD).
• It is the largest manufacturer of CHD occluder products and related procedural accessories in China, according to Frost & Sullivan.

• The controlling shareholders of Shandong Fengxiang Co Ltd-H (9977 HK),  a company engaged in chicken breeding, slaughtering, and processing, are unable to meet their debts.
• As such, these shareholders who hold 70.92% of shares out in Fengxiang, via domestic shares, have been forced into a judicial auction, the completion of which may trigger an MGO. 
• Taking pointers from Dongzheng Automotive Finance (2718 HK)‘s recent auction means we back out a possible payment around late December – on the assumption an unconditional MGO is triggered.

• Angelalign Technology (6699 HK) has reported muted H1 2022 results, which were negatively impacted by the resurgence of the COVID-19 pandemic in China and the corresponding restrictions.
• Revenue from core business of clear aligner treatment grew just 3% y/y. However, lower ASP and higher cost of sales, pulled down the gross profit margin by 930bps to 60.2%.
• Thus far in H2 2022, China has imposed lockdowns in multiple major cities. With the uncertainty over the duration of COVID, no immediate respite is seen in Angelalign’s business.

• Our base valuation of Leapmotor HKD 34.9 per share, which is 27% lower than the low end of the IPO price range of HKD 48 per share. 
• Given the steep downside of our target price (6-12 month period) relative to the IPO price range, we are Negative on  the Leapmotor IPO.
• Leapmotor is selling 130.82 million shares in the IPO at a price range of HKD 48 to HKD 62 per share, scaling back the size of the IPO considerably. 

• This is our first report on SKYX Platforms and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
• Another important fact about SKYX Platforms is that the company’s management comprises several former GE and NEC employees which is a big positive.
• We believe that there is a good chance the company’s offerings may become universally accepted in the years to come.

We view Central China Real Estate (CCRE) as “High Risk” on the LARA scale. The company’s operations are geographically concentrated in Henan, China’s third-most populous province. While this exposes CCRE to policy and political changes within the province, we believe the risks are partly mitigated by the company’s deep market knowledge, brand recognition, as well as longstanding relationships with the local government and construction companies. Our view also considers the deteriorated operating and financing environment across the Chinese property industry, which has adversely impacted CCRE and other private developers.

Our fundamental Credit Bias on CCRE is “Negative”, given the company’s weak sales, very low margins, poor liquidity and lack of access to capital market financing amid the industry turmoil. Moreover, CCRE has material non-debt liabilities. Going forward, the company’s debt repayment prospects may hinge on the development of synergies with its SOE minority investor (Henan Railway) to achieve new business and financing opportunities.

Controversies for CCRE are “Immaterial”, despite reputational risk on account of worker fatalities. This was mainly reported in the media in 2019 and 2020, with such statistics not provided in the company’s ESG reports. The ESG Impact on Credit is “Neutral”. We note positively that CCRE’s corporate governance has improved, supported by increased transparency and its willingness to honour debt obligations.

• This is our first report on Jupiter Wellness and we look to provide a detailed account of the various drivers that will be responsible for the company’s growth in the coming years.
• With all of these developments, a stock priced at 63 cents appears to be highly affordable and supports our positive outlook.
• Overall, we believe that Jupiter has phenomenal growth prospects and is an excellent investment prospect.

• Due to declining performance, lack of core competitiveness and increasing competition, the market has to re-examine the growth potential and outlook of Angelalign.The era of high margin is fading away.
• Angelalign’s low-price strategy is easily hit by similar products with lower prices. Once its price loses advantage, it will directly lead to a rapid and substantial decline in overall performance.
• Due to its worse-than-expected 2022H1 performance and economic downturn, we lowered our 2022 forecast of Angelalign. Angelalign shouldn’t be valued that much higher than Align Technology, expecting more downside ahead. 

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.

• CIFI Holdings

• Despite record losses in 2Q22, share price of Air China Ltd (H) (753 HK) has rallied 14% YTD, outperformed the 23.9% decline in HSCEI and its Chinese peers. 
• Air China’s stub value has returned to pre-pandemic level, but is primarily driven by the A-share. Cathay Pacific (293 HK) recovery is an important catalyst for narrowing H-A share discount.
• News flow over the next 12 months, mostly related to further relaxation of quarantine requirements, will be positive. The surge in demand should support elevated passenger yield.  

• This is our first report on Bruush Oral Care and we look to provide a detailed account of the drivers that will propel the stock in the near future.
• Bruush got listed recently and its stock price has been volatile but has maintained a more or less sideways trajectory in this short period of time.
• Overall, we believe that Bruush Oral Care has phenomenal growth prospects and is an excellent investment prospect.

• Leapmotor (LM) aims to raise around US$1.0bn in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
• As of end Jun 22, it had delivered a total of 104,829 cars with most of its sales coming from its mini units, T03.
• In this note, we will run the deal through our ECM framework and talk about valuations.

• Leapmotor (2007699D HK) has launched its HKEx listing at HK$48.00-62.00 per share to raise up to US$1.0 billion. Books are open from 20 to 23 September.
• We previously discussed the IPO in Leapmotor IPO: The Bull Case, Leapmotor IPO: The Bear Case, Leapmotor IPO: Look Before You Leap, Leapmotor IPO: Valuation First-Look. 
• Leapmotor, at best, should trade in line with median peer multiples. Leapmotor is fairly valued at the low end of the IPO price range. We pass on the IPO.

• Leapmotor (2007699D HK) is a leading smart EV company in China that designs and builds EVs. The company develops key hardware, software and all electronic components of the vehicles internally.
• The company has filed for an IPO on the HKEx and plans to raise about US$1bn through the IPO.
• In this insight, we analyse the company’s financials to understand the key reason behind the absence of gross profit margins compared to other players in the market.

• On 16 September, the administrator published the details for the auction of Shandong Fengxiang Co Ltd-H (9977 HK) controlling shareholder’s 70.92% stake in Alibaba Judicial Auction. 
• If the auction is successful and results in any person and a group of persons acting in concert holding 30%+ of the voting rights, it will result in an MGO.
• The base bid implies an MGO price of HK$1.563 per H Share, a 103.0% premium to the last close. The auction will be held from 10 October to 11 October.

• Onewo Space-Tech (ONEWO HK) has provided its IPO price range of HK$47.1 to HK$52.7 a piece in the IPO offering of 116.74 million shares, representing 10% of its outstanding shares.
• Our base case valuation of Onewo Spacetech is HKD27.7 per share, which represents 41% lower than the low end of the IPO price of HKD47.1 per share. 
• Our valuation analysis suggests a range of HKD25 per share to HKD33.5 per share. We would AVOID this deal due to the much lower target price relative to IPO price.

• CALB (CALBLZ CH), a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.
• We previously discussed the IPO in CALB IPO: The Bull Case, CALB IPO: The Bear Case and CALB IPO: Updates Support the Bull Case.
• In this note, we present our forecasts and take the first look at CALB’s potential valuation range. 

• TME’s shares are due to start trading on HKEx tomorrow once it carries out a secondary listing by introduction. The company neither issues new shares nor raise any proceeds.
• The company’s earnings growth has started decelerating with having to end exclusive music licensing agreements with WMG, UMG and Sony Music a year ago as part of a SAMR probe.
• TME’s 2Q2022 results show recovery in its earnings, however, we would recommend waiting until regulatory crackdown on tech platforms eases off.

• For RC18, it depends on whether RemeGen can seize this short period of strategic opportunities to further establish its leading position. The situation faced by RC48 is much more complex.
• From the current situation, it’s very challenging for RemeGen to evolve into biopharma.That is to say, RemeGen’s future positioning is still likely to remain a biotech, which limits valuation expansion.
• Even based on conservative forecast, there’s still decent upside potential. We’re bullish on RemeGen. Due to unfriendly macro, investors may need to consider the potential downside risks when going long.

• This is our first report on cloud-based solutions provider, GoDaddy.
• The company is one of the largest players in the domains, hosting and other related cloud-based solutions space across the globe.
• This quarter, the company launched its beta WooSaas solution, allowing it to reach larger customers.

• Jenscare, a China based structural heart disease focused medical device company, plans to raise up to USD 30m via a Hong Kong listing.
• In our previous insight, we discussed that there have been many TAVR companies listed in Hong Kong but we think Jenscare has a differentiated portfolio.
• In this note, we will look at updates in its latest filing and highlight massive delays in its product candidates. We also provide a quick thought on its valuation.

• Onewo Space-Tech (ONEWO HK) (OST) aims to raise upto US$784m in its Hong Kong IPO. OST is a property management service provider primarily owned by China Vanke (2202 HK). 
• As per Frost & Sullivan, amongst the residential community service providers in China, OST ranked first. It also ranked first in the commercial space integrated services market in China.
• In this note, we will run the deal through our ECM framework and talk about valuations.

• In July, Meituan’s user base exceeded Ele.me and Ele.me’s active user base decreased by 24% YoY.
• In China, Monthly active user bases of local life and food delivery recovered from May to July.
• We believe Meituan’s stock has only a downside of 6% for year end 2023.

• The fundamental changes in the population structure will lead to a decline in the growth rate of the total retail sales of consumer goods. The long logic doesn’t exist.
• Aier has hit a growth ceiling. As the endogenous demand will be stepped downward gradually, the performance of Aier will further decline. The downward elasticity of valuation is greater.
• It is still difficult for healthcare sector to have its own independent growth logic. The bottom of healthcare sector would appear after the collapse of Aier’s valuation.

• Underpinned by higher ASP and sequentially lower input costs, CPMC Holdings (906 HK) should achieve better margin in 2H22. Its 17% fall in share price YTD makes it appealing.
• Average aluminum price was down 14% so far in 2H22, vs. 1H21, good to its costs. Well-controlled selling and administrative costs will help to support profitability recovery.
• New two-piece can capacity will grow by 54% over the next three years as 5 production lines are expected to be added. Most of them already have demand lined up.

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 Vanke
• Country Garden Holdings Co

• It was a busy week with a bunch of index rebalances being implemented at the close of trading on Friday.
• We list out potential changes to the STAR50 INDEX, Philippines Stock Exchange PSEi Index (PCOMP INDEX) and SET50 INDEX at the upcoming rebalances.
• There was a large outflow from the iShares MSCI ACWI ETF (ACWI US) for yet another week.

• Times Neighborhood (9928 HK) has been a disastrous call since we first highlighted it. In this insight, we reflect upon the red flags we could have done well to spot. 
• We cover red flags ranging from the level of precise guidance, pivot in strategy, and the parent’s poor financial health, to the effect on receivables sucking cash from the company. 
• Everyone makes mistakes (we are human, after all). We would like to share our experience to educate readers to become better investors and sidestep investments in such names.  

• Onewo Space-Tech (ONEWO HK) has launched its HKEx listing at HK$47.1-52.7 per share to raise up to US$0.8 billion. Books are open from 19 to 22 September.
• We previously discussed the IPO in Onewo IPO: The Bull Case, Onewo IPO: The Bear Case and Onewo IPO: Trade-Offs Vs Peers. 
• Our valuation analysis suggests that the IPO price range is attractive compared to peers with financially sound parentco backgrounds. We would participate.

• Tencent and NetEase received new licenses from the authorities more than a year.
• Meituan’s car-hailing service joined Tencent WeChat’s traffic platform, Tencent Passenger Traffic.
• Express parcels and their revenue continued to recover in August.

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 Fortune Land
• Fosun International
• Road King Infrastructure

• Through its 43.58% ownership in lithium carbonate producer Lanke Lithium Industry, Keda Industrial Group (600499 CH) is well placed to benefit from the increase in lithium demand.
• Lanke’s capacity has recently been upgraded to 30,000 tonnes. Also, Keda is adding capacity to its own integrated anode materials factory in Fujian to capture the ever-rising demand. 
• Overseas ceramic business will see solid growth from key markets in Africa as Keda raises capacity by 65% by FY23. The stock’s valuations are inexpensive relative to peers. 

• We are Negative on Keda Industrial over the next year due to a potential downturn in the ceramics machinery market, uncompelling valuations, and concerns about expansion into lithium battery materials. 
• Keda Industrial Group is one of the world’s leading suppliers of building ceramic machinery and equipment.
• Its A-Shares listed on Shanghai Stock Exchange and it completed a private placement of GDRs listing the shares in SIX Swiss Exchange in July 2022. 

• Genuine Biotech (GBL HK) has filed for HK listing. Its Azvudine received NMPA approval for the treatment of COVID-19 in July 2022 to become the first China-made oral COVID-19 drug.
• Azvudine was conditionally approved by the NMPA for the treatment of HIV infection in July 2021. However, the drug is yet to be commercialized.
• Genuine Biotech plans to use the IPO proceeds for the commercialization of Azvudine. The company’s current cash balance can maintain its financial viability for approximately 20 months.

• 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 few large Hong Kong IPOs are rumoured to be aiming to launch their bookbuild next week.
• There was only the Atlas Arteria (ALX AU) mega entitlement offer this week, on the placements front.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments – Leapmotor (2007699D HK) and Onewo Space-Tech (ONEWO HK) will launch US$1.0bn and US$0.8bn HKEx IPOs this week, respectively. WCP (WCP KS) is bookbuilding a US$692m KRX IPO
• Event-Driven developments –Link Administration (LNK AU), Ramsay Health Care (RHC AU), Giordano International (709 HK), Xiamen International Port H (3378 HK), Frasers Hospitality Trust (FHT SP), 21Vianet Group (VNET US)

• 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 ~US$0.33bn, split (+US$0.16bn) for Shanghai and (+US$0.17bn) for Shenzhen.
• The largest inflows were into Tencent (700 HK) and China Mobile (941 HK). The largest outflows were in Hang Seng H Share Index ETF (2828 HK) and Geely (175 HK).

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. Fosun International
2. China SCE
3. CIFI Holdings
4. Vedanta Resources
5. China Jinmao Holdings

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. Fosun International
2. China SCE
3. CIFI Holdings
4. Vedanta Resources
5. China Jinmao Holdings

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.

• Onewo Space-Tech (ONEWO HK) is a leading property management service provider in China looking to raise US$2bn through an IPO on the HKEx.
• This is the Second of a series of reports on Onewo IPO and we will be discussing the company’s Commercial and Urban Space services and AIoT and BPaaS solution segments.
• We expect Onewo’s margins to remain under pressure in the medium-term as the company focuses on customer acquisition which would likely impact margins in the near-term.

• 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 inflow over the past week was ~US$1.9bn, split between Shanghai (+US$1.1bn) and Shenzhen (+US$0.8bn).
• The largest inflows were into Kweichow Moutai (600519 CH) and S.F. Holding (002352 CH). The largest outflows were in China Merchants Bank A (600036 CH) and CATL (A) (300750 CH).

• Back on the 19 May, SAIC (600104 CH) acquired China Zhengtong Auto Services (1728 HK)‘s 71.04% stake in Dongzheng Automotive Finance (2718 HK) at a judicial auction. This triggered the mandatory Offer.
• SAIC confirmed a possible unconditional mandatory cash Offer for Dongzheng on the 26 May.
• The Composite Doc has now been dispatched. The Offer is open for tendering and closes on the 16 October

• CALB (CALBLZ CH), a leading EV battery manufacturer, is seeking to raise US$2.0 billion through an HKEx IPO, according to press reports.
• We previously discussed the IPO in CALB IPO: The Bull Case and CALB IPO: The Bear Case. This note updates our view for the PHIP and recent developments.
• The 1Q and truncated 1H numbers outline the highest growth among peers, customer diversification and sequential improvement in gross margin. The IPO is worth a look.

• Dongzheng Automotive Finance (2718 HK)‘s composite document is out with the offer open from 15 September to 6 October. The IFA considers the offer to be fair and reasonable.
• SAIC Motor (600104 CH), which acquired a 71.04% stake, has launched an unconditional MGO at HK$1.2430 per H Share. SAIC intends to maintain Dongzheng’s listing status.
• At the last close and the 17 October payment, the gross and annualised spread to the MGO price is 1.1% and 13.3%, respectively.

• Lepu Medical Technology A (300003 CH) is looking to raise up to US$550m in its Swiss GDR listing. Bookrunners on the deal are CICC, Citic Securities, and Credit Suisse.
• The firm has earlier secured CSRC’s approval to list a maximum 36.09m GDRs (or 180.46m A-shares, at a 1:5 conversion). 
• As per media reports, Lepu Medical will look to launch its Swiss GDR offering soon and the eventual deal size might amount to US$300m.

• CALB aims to raise around US$1.5bn in its Hong Kong IPO.
• CALB undertakes design, R&D, production and sales of EV batteries and Energy Storage Systems (ESS) products.
• In our previous note, we undertook a peer comparison. In this note, we will talk about valuations.

• HSI INDEX is trading back down to recent lows and support levels. It looks oversold and there are potential catalysts for a bounce
• Implied vols are low and options offer a great way to play a tactical long
• We highlight a relative value vol trade vs the SPX

• The main drivers for Hong Kong stock rallies are short covering, buybacks, and China government real estate support measures announcements.
• Hang Seng Index and most of its constituents continue to read like bear porn. Without a meaningful reversal/impulse rally, it is hard to call for a reversal.
• I hear and agree the case is so bad that it must be a buy signal. The sentiment is precious, BUT it needs a price action supporting the exhaustion thesis.

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
• CIFI Holdings
• Fosun International
• Sino-Ocean Service
• Vedanta Resources

• Back on the 11 April, Chinese internet data center services provider VNET (VNET US) announced a non-binding proposal from Hina Group and Shanghai’s Industrial Bank at an utterly underwhelming US$8.00/ADS.
• Then crickets. A reported tilt from MBK Partners failed to materialise.
• VNET has now announced a preliminary non-binding proposal from founder Josh Sheng Chen, at a similarly underwhelming price of US$8.20/ADS. 

• CALB aims to raise around US$1.5bn in its Hong Kong IPO.
• CALB undertakes design, R&D, production and sales of EV batteries and Energy Storage Systems (ESS) products.
• In this note, we undertake a peer comparison and talk about the company’s expansion plans.

• Eva Precision Industrial Holdings (838 HK) is a beneficiary of EV penetration globally and in China, trading at 9.4x /5.6x FY22/23e and 3.2%/5.3% dividend yield (30% payout ratio).
• H1 2022 was groundbreaking for the company as it commenced strategic cooperation with  BYD (1211 HK) on products and bagged orders from Huwaei and Tesla, with more coming in H2.
• There is additional room for buybacks as the stock price is < 2HKD and the company only completed 3-4% of its 200 mn HKD buyback.

• 4Paradigm (1764934D HK) is a pioneer and leader in enterprise AI. Company offers platform-centric AI solutions to enterprises that can be deployed on a large scale to support decision making.
• The company was ranked the largest player in the platform-centric decision-making AI market in China in 2021 and has filed for a HKEx listing for the third-time this month.
• 4Paradigm’s top line and margins have improved since we last wrote on the company.

• CALB’s revenue surged by 266% YoY to reach 3.9 billion RMB in 1Q 2022. Its  operating profit also increased by 43.5% YoY in 1Q 2022, respectively. 
• CALB also had the highest sales growth rate of 266.5% YoY in 1Q 2022 versus 154% growth YoY for CATL and 63% growth YoY for BYD in 1Q 2022.
• CALB is one of the most interesting large cap IPOs globally in 2022. Despite horrible market conditions, the company is trying to complete its IPO in the next several weeks.

• The main bottleneck in this market in China is the severe shortage of doctors and limited qualified hospitals to carry out such surgery, leading to lower-than-expected market penetration/sales performance.
• Jenscare Scientific (JCS HK)’s products have to face fierce competition, without obvious advantage of development progress, or the progress has already lagged behind the competitors. 
• Overall, good valuation cannot be supported without promising commercialization outlook. We are not sure whether Jenscare can finally achieve the ideal return in the case of unfriendly external environment.

We view First Pacific (FIRPAC) as “Low Risk” on the LARA scale. This is primarily due to the group’s strong assets and tight control over key investee companies, which ensure reliable dividend streams to service debt. The investment holding company has a reasonable track record. Its key assets include Philippine Long Distance Telephone Company, Indofood and Metro Pacific Investments Corp. The group’s asset concentration is offset by the strength of these companies, which are: [1] leaders in their market segments; and [2] stable non-cyclical businesses. Leverage is moderate (measured as Net Debt at Holdco/Market Value of Assets). The investment portfolio has high transparency, with almost all assets (based on NAV) being listed.

Our fundamental Credit Bias is “Stable”​, due to the subsidiaries’ robust performance.

Controversies are “Immaterial” and the ESG Impact on Credit is “Neutral”. As an investment holding company, FIRPAC does not face substantial regulatory, geopolitical or ESG risks.

• Jenscare Scientific (JCS HK) is developing interventional products for the treatment of structural heart diseases. Its core product LuX-Valve is expected to become the first commercialized TTVR product in China.
• With its comprehensive portfolio and early mover advantage, Jenscare is well-positioned to capitalize on large and underpenetrated China’s structural heart diseases treatment market worth of RMB20.3 billion in 2030.
• Jenscare Scientific plans to raise $30 million (HKD234 million) in its third application for a Hong Kong IPO, with CICC and Citigroup being the joint sponsors.

• China Conch Venture Holdings (586 HK) is now at negative stub value, the low-end since 2020. This is despite a 16.4% growth in 1H22 core earnings to Rmb542m.
• The company’s waste-to-energy (WTE) capacity will increase by 25% in FY23 and its internal target calls for an earnings CAGR of 33% between FY21 and FY25 for WTE segment.
• We should not underestimate the potential from new business initiatives including cathode and anode materials and lithium battery recycling. They have good medium-to-long term exposure to China’s new energy industry.

• Due to better-than-expected VBP results, we saw a decent rally of MDG’s share price last Friday. However, all the medical products that are covered by VBP begin to lose logic. 
• Backwardness in R&D is a bottleneck restricting MDG’s future growth. MDG is more like a manufacturing/processing plant relying on labor dividends than a technology company with high product added value.
• Multiple risks (e.g.pandemic, depreciation of exchange rate against US dollar, economic downturn, etc.) will add more uncertainties to MDG’s 2022 performance. MDG’s share price could remain tepid after temporary rally. 

• The offeror and acceptances reached 46.04%, just short of the 50% minimum acceptance condition. The offeror has decided to let the Giordano International (709 HK) offer lapse.
• The offer fell short of the 50% threshold as the Cheng family mistakenly assumed that shareholders behind Halycon’s stake were friendly shares, which would support the offer.
• The downside will be muted as the shares are trading in line with the 1-year average forward P/E, minorities thought the offer was low, and David Webb is a buyer.

• 21Vianet Group (VNET US) disclosed a privatisation proposal from the founder at US$8.20 per ADS, a 2.5% premium to The Hina Group/Industrial Bank’s offer of US$8.00 (disclosed on 11 April).
• The data centre industry continues to be a hotbed for M&A. Bloomberg reported on 27 July that MBK Partners is mulling an offer for VNET. 
• The offer is unattractive, and Mr Cheng, with 28.79% of voting rights, will need the support of other substantial shareholders. This latest offer underlines the current mispricing of the shares

• CALB aims to raise around US$1.5bn in its Hong Kong IPO.
• CALB undertakes design, R&D, production and sales of EV batteries and Energy Storage Systems (ESS) products. 
• In this note, we talk about the updates from the company’s recent PHIP filings.

• Utter carnage in arb-world this week, as Frasers Hospitality Trust (FHT SP) fails, Link Administration (LNK AU) and Ramsay Health (RHC AU) are potentially next, and now Giordano (709 HK).
• 46.04%. That’s the only number that matters, which represents the total shares owned by the Cheng family plus shares tendered. 
• The Chengs are restricted from launching another Offer for 12 months. Giordano will be sold off today, however, this is a buy if it retraces to around the undisturbed levels.

• 111 Inc (YI US), an online healthcare platform operator in China, announced an unsolicited preliminary non-binding proposal from Gang Yu and Junling Liu – both co-founders and co-chairmans.
• Yu and Liu are offering US$3.66/ADS, a 20% premium to the undisturbed price. 
• Yu and Liu control 92.1% of the votes. There is no shareholder vote on this transaction should a firm Offer unfold.

• NetDragon Websoft announced that it has appointed Ms. Tang Wu (a virtual humanoid robot powered by AI) as its new CEO which would be the first ever in the world. 
• The company’s education revenue increased by 71.2% YoY to reach 2.4 billion RMB in 1H 2022. Profitability of the edtech business is also improving.
• Despite the company’s lower valuation multiples than its peers combined with catalysts including improving edtech business, we are cautious on its shares mainly due to the overall market related risks. 

• Genscript’s four business segments are the horizontal and vertical extension based on gene synthesis technology. There is also synergy between Genscript and its subsidiaries, which can promote each other’s development.
• If only from the business level, GenScript is a worthy target for investment. It has the exponential growth potential in valuation and could reach a new high in the future.
• However, our biggest worry lies in the “black swans events” . We don’t know what “new surprises” GenScript will bring us in the future. 

• China’s gaming regulator granted publishing licenses to 73 online games on Tuesday, including one for NetEase Inc (NTES US) . However, Tencent (700 HK) was excluded for the fifth time.
• Though the 9-month long new game approval freeze was lifted in April, it has been more than a year since Tencent received approval for a new title.
• Tencent’s online game revenue declined YoY for two consecutive quarters and we expect online game revenue to decline further in 3Q2022E.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

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