In today’s briefing:
- Cayman Islands: Headcount To Be Decapitated On 31 August
- HSI Leads Bear Move in Asia
- Hong Kong CEO & Director Dealings – 1st August 2022
- Miniso’s Word Against Short Seller Blue Orca’s Facts
- Tencent/Netease: Increasing Pressure with Zero Approval in August Batch & Thoughts on Trading
- China Tourism Group A/H Listing – Updates from Revised Filing and Quick Thoughts on Valuation
- WuXi AppTec (603259.CH/2359.HK) 2022H1 – The Concerns Behind and the Outlook
- Kingsoft Cloud: Thoughts on HK Dual Primary Listing
- Morning Views Asia: Pan Brothers, Sino-Ocean Service, Vedanta Resources
- Chipotle Mexican Grill Inc.: Expansion of the Loyalty Program & Other Developments
Cayman Islands: Headcount To Be Decapitated On 31 August
- The Companies (Amendment) Act 2021 of the Cayman Islands (Amendment Act), which will come into force on 31 August 2022, will abolish the current ‘headcount test’.
- Those companies incorporated in the Cayman Islands, and subject to a members’ Scheme of Arrangement, were previously required to satisfy the headcount test under section 86 of the Companies Act.
- This development clarifies previous uncertainty/ambiguity which could arise, with ‘take private’ deals of Cayman-incorporated, Hong Kong-listed companies, where a Scheme is the favoured privatisation path.
HSI Leads Bear Move in Asia
- HSI remains a top short bet from the C wave dual top at 22,500, the break below wedge support and now the bear triangulation support breach targets new lows.
- A50 weakness is weighing on HK. HSI clear break down will lead the upcoming risk off cycle in Asia.
- We like adding to a short on upticks with near resistance at 20,500. 19,700 is the pivot support to break below that will open the way to 18,200.
Hong Kong CEO & Director Dealings – 1st August 2022
- 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 also flag those companies where shares have been pledged, both recently and ongoing.
Miniso’s Word Against Short Seller Blue Orca’s Facts
- Blue Orca issued a damning short-seller report on Miniso (MNSO US) on the 25th of July 2022, stating that the company’s asset-light and high-margin franchise business is mostly a lie.
- Miniso responded rather quickly but its response lacks evidence and does not do anything to contradict the facts presented by the short seller.
- Thus, it is Miniso’s word against Blue Ocra’s facts and it is quite obvious which side investors should take.
Tencent/Netease: Increasing Pressure with Zero Approval in August Batch & Thoughts on Trading
- China just announced game approval for August batch. More games were approved in August compared to July and June.
- Pace of China game approval continued to pick up albeit at a much slower pace than pre-tightening.
- Both Tencent and Netease will be under increasing pressure as the duo continue to score zero in August, making it the fourth time with no games approved since resumption .
China Tourism Group A/H Listing – Updates from Revised Filing and Quick Thoughts on Valuation
- China Tourism Group Duty Free Corporation Limited (CDF) now aims to raise US$2-3bn in its H-share listing in Hong Kong.
- As per Frost & Sullivan, CDF had 92.3% market share by retail revenue in China duty-free merchandise sales in 2020.
- In this note, we will talk about the recent updates from its revised filings and revisit valuations.
WuXi AppTec (603259.CH/2359.HK) 2022H1 – The Concerns Behind and the Outlook
- It seems that Mr Market was not satisfactory with WuXi AppTec’s 2022H1 performance. If excluding COVID-19 projects (which are regarded as a one-time increment), the performance growth was not high.
- Considering that the CXO preliminary bid winning has declined largely in the US, domestic CXO would not begin to gradually reflect the slowdown of newly added orders until Q4.
- We are concerned about WuXi AppTec’s performance in 2023. As an old generation CXO, it’s hard to achieve V-shaped rebound. So, 2022 is a good time to offload the Company.
Kingsoft Cloud: Thoughts on HK Dual Primary Listing
- Kingsoft Cloud (KC US) is the largest independent cloud service provider in China in terms of revenue in 2021 and its clientele includes the likes of ByteDance and Xiaomi.
- KC is listed in NASDAQ and has filed for a dual primary listing on HKEx and has not disclosed the amount that it plans to raise from the stock issuance.
- We are broadly positive on the company’s growth prospects and discuss the details below.
Morning Views Asia: Pan Brothers, Sino-Ocean Service, Vedanta Resources
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.
Chipotle Mexican Grill Inc.: Expansion of the Loyalty Program & Other Developments
- Chipotle Mexican Grill has been in the news for an amazing rebound in its stock price after delivering a robust set of results surpassing Wall Street expectations in terms of earnings.
- The in-restaurant sales increased while digital sales were also up and the management added 51 new restaurants in 42 locations.
- We provide the stock of Chipotle Mexican Grill with a ‘Hold’ rating with a revision in the target price.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars