HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

CXMT Corporation / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/cxmt-corporation" target="_blank" data-smartkarma-citation="entities:44129:1" rel="noopener">CXMT Corporation (688825 CH)</a> concluded its IPO price at Rmb8.66, and we estimate this equals 5x PER for FY26 and 3.4x for FY27.</li>
<li>It is inexpensive relative to global peers, as they are trading at an average of 8.1x and 6.1x, respectively. Normally, A-shares trade at a higher multiple than global peers. </li>
<li>Applying the Hang Seng AH premium on the IPO, there is a 74.5% upside. Aggressively, if GPU companies are used as references, it may even provide a 3x upside.</li>
</ul>



CXMT Corporation (688825 CH) concluded its IPO price at Rmb8.66, and we estimate this equals 5x PER for FY26 and 3.4x for FY27.
It is inexpensive relative to global peers, as they are trading at an average of 8.1x and 6.1x, respectively. Normally, A-shares trade at a higher multiple than global peers. 
Applying the Hang Seng AH premium on the IPO, there is a 74.5% upside. Aggressively, if GPU companies are used as references, it may even provide a 3x upside.


CXMT Corporation (688825 CH) IPO: Valuation Insight

Shanghai Enflame Technology / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-enflame-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:50657:1" rel="noopener">Shanghai Enflame Technology (ENFLAME CH)</a>, one of the "Four Domestic GPU Little Dragons", has just been approved by the CSRC to list on the STAR market, aiming to raise Rmb6bn.</li>
<li>The company's strengths lie in its comprehensive product portfolio, differentiated architecture (DSA vs. GPGPU), strong shareholder backing, and position for China's AI self-sufficiency.</li>
<li>At 27.1x P/S for FY26 (10% share capital enlargement), Enflame is inexpensive relative to A-share peers, <a href="https://www.smartkarma.com/entities/shanghai-biren-technology-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:39934:1" rel="noopener">Biren Technology (6082 HK)</a> and <a href="https://www.smartkarma.com/entities/shanghai-iluvatar-corex-semiconductor-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:46193:1" rel="noopener">Iluvatar CoreX (9903 HK)</a>. </li>
</ul>



Shanghai Enflame Technology (ENFLAME CH), one of the "Four Domestic GPU Little Dragons", has just been approved by the CSRC to list on the STAR market, aiming to raise Rmb6bn.
The company's strengths lie in its comprehensive product portfolio, differentiated architecture (DSA vs. GPGPU), strong shareholder backing, and position for China's AI self-sufficiency.
At 27.1x P/S for FY26 (10% share capital enlargement), Enflame is inexpensive relative to A-share peers, Biren Technology (6082 HK) and Iluvatar CoreX (9903 HK). 


Shanghai Enflame (燧原科技) Pre-IPO: Key Investment Thesis

Technology / Semiconductor / Internet Research

Nicolas Baratte

Equity Bottom-Up

<ul>
<li>We’re going thru another iteration of the “AI peak” theory, driven by Hyperscalers’ declining Free Cash Flow. Coinciding with an “AI bubble” narrative, following the April-May stock rally.  </li>
<li>Stocks aren’t expensive. Semiconductors are trading at average PEx (17.7x forward EPS), Hyperscalers at -1 standard deviation (21.1x forward EPS). No valuations bubble. Expectations bubble? Consensus forecasts look reasonable.</li>
<li>Hyperscalers’ declining Free Cash Flows is true. Increasing Debt issuance is true. Also true: Cloud revenues are accelerating, margins are expanding. Most extraordinary is the increase in Remaining Performance Obligations.</li>
</ul>


We’re going thru another iteration of the “AI peak” theory, driven by Hyperscalers’ declining Free Cash Flow. Coinciding with an “AI bubble” narrative, following the April-May stock rally.  
Stocks aren’t expensive. Semiconductors are trading at average PEx (17.7x forward EPS), Hyperscalers at -1 standard deviation (21.1x forward EPS). No valuations bubble. Expectations bubble? Consensus forecasts look reasonable.
Hyperscalers’ declining Free Cash Flows is true. Increasing Debt issuance is true. Also true: Cloud revenues are accelerating, margins are expanding. Most extraordinary is the increase in Remaining Performance Obligations.


AI Is a Bubble, Again? Stocks Aren’t Expensive. Hyperscalers’ Future Revenue Tells a Different Story

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing) (TSM US)

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>The SOX is up ~55% since March ’26, on the back of massive earnings. Valuations are  average. Within the SOX, there is a wide divergence in performance and valuations.</li>
<li>Memory sector is, at the same time: highest earnings growth, highest stock performance, and yet the lowest valuations. </li>
<li>Within the big caps, NVDA and TSMC are now abnormally cheap.</li>
</ul>


The SOX is up ~55% since March ’26, on the back of massive earnings. Valuations are  average. Within the SOX, there is a wide divergence in performance and valuations.
Memory sector is, at the same time: highest earnings growth, highest stock performance, and yet the lowest valuations. 
Within the big caps, NVDA and TSMC are now abnormally cheap.


What to Do with Semi Stocks? The SOX Rally Is Not a Crazy Bubble.

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

<ul>
<li>
Sub-8nm foundry license mix surged from 47.6% to 79% in 1Q26, a real-time read on advanced-node platform demand across TSMC, Samsung, and the leading-edge foundry stack.</li>
<li>
A Tier-1 US foundry engagement (likely Intel Foundry or TSMC Arizona in our view) could be confirmed 2Q26, a leading indicator of which US fab attracts external fabless customers first.</li>
<li>
First 3nm royalties landed in 4Q25; sub-16nm royalty +~700% YoY in 1Q26, confirming the AI accelerator supply chain's transition to leading-edge nodes is now live.</li>
</ul>



Sub-8nm foundry license mix surged from 47.6% to 79% in 1Q26, a real-time read on advanced-node platform demand across TSMC, Samsung, and the leading-edge foundry stack.

A Tier-1 US foundry engagement (likely Intel Foundry or TSMC Arizona in our view) could be confirmed 2Q26, a leading indicator of which US fab attracts external fabless customers first.

First 3nm royalties landed in 4Q25; sub-16nm royalty +~700% YoY in 1Q26, confirming the AI accelerator supply chain's transition to leading-edge nodes is now live.


TechChain Insights Q&A: Inside TSMC, Intel and SMIC's Advanced-Node Pipeline - M31 (6643 TT)

United States

Intel Corporation designs, manufactures, and sells computer components and related products.  The Company's major products include microprocessors, chipsets, embedded processors and microcontrollers, flash memory products, graphics products, network and communications products, systems management software, conferencing products, and digital imaging products.

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Intel Corp (INTC US)

CXMT Corporation (688825 CH) IPO: Valuation Insight

CXMT Corporation (688825 CH) has announced it will start trading on the Shanghai Stock Exchange's STAR Market next Monday (27 Jul 2026).

Osbert Tang, CFA

Shanghai Enflame (燧原科技) Pre-IPO: Key Investment Thesis

CSRC has just approved Shanghai Enflame Technology's application to list on the STAR market, with an aim of raising Rmb6bn. Its FY26F P/S ratio is...

Osbert Tang, CFA

AI Is a Bubble, Again? Stocks Aren’t Expensive. Hyperscalers’ Future Revenue Tells a Different Story

AI peak theory revisited as Hyperscalers' declining Free Cash Flow sparks "AI bubble" narrative. Valuations not bubble, expectations not inflated....

Nicolas Baratte

What to Do with Semi Stocks? The SOX Rally Is Not a Crazy Bubble.

The SOX index has surged 55% since March on strong earnings. Wide divergence in performance and valuations. Memory sector: high growth but low...

Nicolas Baratte

TechChain Insights Q&A: Inside TSMC, Intel and SMIC's Advanced-Node Pipeline - M31 (6643 TT)

Advanced-node platform demand on the rise, with sub-8nm licenses dominating 1Q26. Tier-1 US foundry engagement could be confirmed 2Q26, signaling...

Vincent Fernando, CFA

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CXMT Corporation (688825 CH) IPO: Valuation Insight

CXMT Corporation (688825 CH) has announced it will start trading on the Shanghai Stock Exchange's STAR Market next Monday (27 Jul 2026).

Osbert Tang, CFA

Shanghai Enflame (燧原科技) Pre-IPO: Key Investment Thesis

CSRC has just approved ​Shanghai Enflame Technology's application to list on the STAR market, with an aim of raising Rmb6bn. Its FY26F P/S ratio is...

Osbert Tang, CFA

AI Is a Bubble, Again? Stocks Aren’t Expensive. Hyperscalers’ Future Revenue Tells a Different Story

​AI peak theory revisited as Hyperscalers' declining Free Cash Flow sparks "AI bubble" narrative. Valuations not bubble, expectations not inflated....

Nicolas Baratte

What to Do with Semi Stocks? The SOX Rally Is Not a Crazy Bubble.

​The SOX index has surged 55% since March on strong earnings. Wide divergence in performance and valuations. Memory sector: high growth but low...

Nicolas Baratte

TechChain Insights Q&A: Inside TSMC, Intel and SMIC's Advanced-Node Pipeline - M31 (6643 TT)

Advanced-node platform demand on the rise, with sub-8nm licenses dominating 1Q26. Tier-1 US foundry engagement could be confirmed 2Q26, signaling...

Vincent Fernando, CFA

CSRC has just approved Shanghai Enflame Technology's application to list on the STAR market, with an aim of raising Rmb6bn. Its FY26F P/S ratio is...

AI peak theory revisited as Hyperscalers' declining Free Cash Flow sparks "AI bubble" narrative. Valuations not bubble, expectations not inflated....

The SOX index has surged 55% since March on strong earnings. Wide divergence in performance and valuations. Memory sector: high growth but low...