FSMOne SG - Research Highlights

2021-10-20 03:31:34 Stock Idea

With its focus on oncology, China’s largest pharma company is set for further growth

——————————————————

• Jiangsu Hengrui Medicine is China’s largest listed pharmaceutical company, and a notable name in the Chinese oncology market.

• As part of its “Made in China 2025” industrial plan, the Chinese government is determined to build a strong and competitive domestic healthcare industry, focusing on innovation and home-grown R&D.

• China is faced with a cancer crisis as roughly 50% of the global gastric cancer, liver cancer, and esophageal cancer burden is diagnosed from patients in China.

• Moving forward, Jiangsu Hengrui's sales growth is likely to be robust, fuelled by the strong uptake and pipeline of oncology drugs.

• Our 2023 target price for Jiangsu Hengrui Medicine is CNY 68, and this translates to an upside potential of 33%.

: Read the full article here
: Jiangsu Hengrui Medicine (SHA:600276) Open / Comment

2021-10-13 13:01:58 Stock Idea

Will Semiconductor: A chance to make 60% returns with China’s largest image sensor manufacturer

——————————————————

• Will Semiconductor is the third largest CMOS image sensor (CIS) manufacturer in the world. Its products are used in a variety of applications, such as smartphones and autonomous vehicles.

• With many smartphone manufacturers moving towards multi-camera smartphones and higher resolution cameras, demand for higher quality CIS should increase.

• The rise of autonomous driving is another source of demand, as cameras are a critical component of autonomous vehicles.

• Our target price for Will Semiconductor is CNY 361, which translates to an upside potential of close to 60%.

: Read the full article here
: Will Semiconductor (SHA:603501) Open / Comment

2021-10-13 03:30:51 Tuan Sing boasts the best credit profile when compared to some Singapore property developers or construction companies, and they've just announced a new 3NC2 bond: https://bit.ly/3uZTVHW

In this week’s Bond Market Monitor, the Bloomberg Barclays USD Asian High Yield Bond Index fell 4% as Chinese credits were under selling pressure, and other updates: https://bit.ly/3oQ4AUL Open / Comment

2021-10-12 03:40:58 Macro Research

How will Evergrande’s fallout affect the global bond market?

——————————————————

• Credit spreads and underlying fundamentals suggest that Evergande’s fallout is likely domestic, contained within China's high yield bond market. We currently see little risk of spillover to China investment-grade bonds given the absence of funding stress.

• Within China's high yield bond market, credit stress is largely contained within the property sector. Yields of property bonds have surged, reflecting mounting risk, while those of non-property bonds remain largely unaffected.

• We expect minimal spillover to global credit market given the limited exposure to China bonds. Additionally, most markets are not showing material signs of stress after the Evergrande fallout while spillover fears are gradually abating.

• Amongst major credit markets, Asian HY bonds are more at risk given the higher underlying exposure. However, at the moment, we are not overly concerned given the smaller direct exposure to Evergrande bonds and our expectation that risk will be contained within China's property sector.

: Read the full article here Open / Comment

2021-10-11 03:33:48 Stock Idea

Thinking of investing in Tencent? Now may be the right time.

——————————————————

• Tencent’s shares have slid by nearly -40% from its peak this year as the Chinese government continues to tighten regulations on the tech sector.

• Limits on in game spending and game time for minors are unlikely to have a significant impact as minors only account for less than 3% of Tencent’s games revenue.

• A vast portfolio of existing games (e.g. Honor of Kings, PUBG), along with growing international revenue, can help to cushion any negative impact stemming from the slower game approvals.

• Tencent’s advertising and fintech businesses remain resilient, with plenty of room for growth, supported by megatrends such as rising smartphone adoption rates and e-commerce.

• Based on the sum-of-the-parts methodology, our target price for Tencent is HKD 747, which translates to an upside potential of close to 60%.

: Read the full article here
: Tencent (HKEX:700) Open / Comment

2021-10-08 05:16:38 StanChart is proposing to re-align the terms of their old perpetual AT1 bonds with recent issues through a consent solicitation exercise: https://bit.ly/3BhFNw9

Stress within the Chinese real estate sector continues to compound with Fantasia’s default this week. Read our answers to your Top 10 questions from last week’s webinar on Evergrande and its impact: https://bit.ly/3oG4iPW

Evergrande: Adhoc committee to hold USD bondholder meeting on 8 October at 6:30pm HK time by Kirkland & Ellis (K&E) and Moelis & Company, the legal and financial advisors of the committee. Bondsupermart will be providing updates as soon as we can. Open / Comment

2021-10-06 13:48:49 Chinese property developer Fantasia defaults on US$206 million bond: https://bit.ly/3mtgnW0

From having a weak credit profile to undergoing privatisation, here’s a list of reasons why we do not recommend Soilbuild REIT’s notes: https://bit.ly/3ouw7uF Open / Comment

2021-10-05 03:32:28 As Evergrande’s downward spiral continues, how have actively managed funds been affected? https://bit.ly/3iv6I04

In this week’s Bond Market Monitor, China Evergrande sells stake in Shengjing Bank for nearly RMB 10b, and other updates: https://bit.ly/3irldSw Open / Comment

2021-10-04 13:37:19 Fund Update:

A property crisis affecting the financial system – Evergrande’s impending default has brought about comparisons to the Lehman Crisis of 2008. Is financial contagion inevitable and what should investors do?

——————————————————

• While an Evergrande default is a near-certainty at this point, we believe that the risks of a Lehman-esque spillover into the financial system are well overblown.

• Preventing full-blown financial contagion will be the priority for the Chinese government, as it would undo much of its work in its push for sustainable growth and common prosperity.

• Instead, we believe that the Chinese authorities are backing themselves to resolve this issue. In the recent past, the Chinese government has dealt with multiple high-profile defaults, and we expect a similar approach here - with a combination of government intervention, debt restructuring, and various entities being requested to step in and conduct “national service” as the likely method of resolution.

• Thus far, the government’s behaviour has backed this up – they have pledged to ensure social stability and have moved accordingly - injecting liquidity into the banking system as well as supporting smaller regional banks that have outsized exposure to Evergrande.

• For the final segment of this update, we provide a quick update on some of our recommended funds that are invested in the Chinese markets: the Eastspring Asian High Yield Fund, the Fidelity China RMB Bond Fund, the Allianz China A-shares Fund, the Manulife APAC REIT Fund, the JPMorgan China Fund, and the UBS Greater China Equity Fund.

: Read the full article here Open / Comment

2021-10-01 15:05:51 Sembcorp Industries is issuing its maiden 10.5 years sustainability-linked bond, allowing greater flexibility where the focus is meeting the sustainability performance target: https://bit.ly/3mqbo8P Open / Comment