HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/busy-ming-group-co-ltd" target="_blank" data-smartkarma-citation="entities:45154:1" rel="noopener">Busy Ming Group (1768 HK)</a>'s 3-year EPS CAGR of 43.1% places it ahead of most peers in F&amp;B retailing, including the tea beverage sector. </li>
<li>Operating on a franchise model, its 13x FY26F and 10.2x FY27F PERs are not expensive, as peers ex-<a href="https://www.smartkarma.com/entities/sun-art-retail-group-ltd" target="_blank" data-smartkarma-citation="entities:401:1" rel="noopener">Sun Art Retail (6808 HK)</a> are averaging at 15x and 12.4x. </li>
<li>It is difficult to trade at <a href="https://www.smartkarma.com/entities/mixue-group" target="_blank" data-smartkarma-citation="entities:40623:1" rel="noopener">Mixue (2097 HK)</a>'s and <a href="https://www.smartkarma.com/entities/guming-holdings-ltd" target="_blank" data-smartkarma-citation="entities:40622:1" rel="noopener">Guming (1364 HK)</a>'s ~20x, due to lower margins. Our fair value is 16.5x PER, equalling HK$300.</li>
</ul>



Busy Ming Group (1768 HK)'s 3-year EPS CAGR of 43.1% places it ahead of most peers in F&amp;B retailing, including the tea beverage sector. 
Operating on a franchise model, its 13x FY26F and 10.2x FY27F PERs are not expensive, as peers ex-Sun Art Retail (6808 HK) are averaging at 15x and 12.4x. 
It is difficult to trade at Mixue (2097 HK)'s and Guming (1364 HK)'s ~20x, due to lower margins. Our fair value is 16.5x PER, equalling HK$300.


Busy Ming (1768 HK) IPO: Not Expensive with Moderate Upside

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

DZT Research

DZT Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Equity Bottom-Up

<ul>
<li>Following our initial Sell Pop Mart note, we conducted selective offline channel checks across overseas markets, and provided updated trend indicators.</li>
<li>Our observations are consistent with the view that recent strength in Labubu-driven sales is unlikely to be sustainable.</li>
<li>In parallel, secondary-market pricing for key Pop Mart items has continued to weaken after launch, reinforcing signs of demand normalization.</li>
</ul>


Following our initial Sell Pop Mart note, we conducted selective offline channel checks across overseas markets, and provided updated trend indicators.
Our observations are consistent with the view that recent strength in Labubu-driven sales is unlikely to be sustainable.
In parallel, secondary-market pricing for key Pop Mart items has continued to weaken after launch, reinforcing signs of demand normalization.


Sell Pop Mart (9992 HK) Updates (2026 Jan): Offline Channel Checks and Trend Data

Quantitative Analysis

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jan 2nd based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Xiaomi (1810 HK), Cosco Shipping (1919 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Xiaomi (1810 HK), Cosco Shipping (1919 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jan 2nd based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Xiaomi (1810 HK), Cosco Shipping (1919 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Xiaomi (1810 HK), Cosco Shipping (1919 HK).


Hong Kong Buybacks Weekly (Jan 2nd): Tencent, Xiaomi, Cosco Shipping

<ul>
<li>Peak IP momentum risk: Labubu (~23% of revenue) shows fading hype, with resale prices and ex-China search interest normalizing, raising risk of faster-than-expected growth deceleration in 2026.</li>
<li>IP concentration and gap: No other IP has demonstrated Labubu-like scaling, increasing risk of an IP digestion period. Overseas expansion matures and supply normalization caps incremental demand.</li>
<li>Valuation/Expectations mismatch: At 14x 2026E P/E, valuation assumes durable IP growth; TP at HKD 100 to 105 with downgrade risk in 2H26.</li>
</ul>


Peak IP momentum risk: Labubu (~23% of revenue) shows fading hype, with resale prices and ex-China search interest normalizing, raising risk of faster-than-expected growth deceleration in 2026.
IP concentration and gap: No other IP has demonstrated Labubu-like scaling, increasing risk of an IP digestion period. Overseas expansion matures and supply normalization caps incremental demand.
Valuation/Expectations mismatch: At 14x 2026E P/E, valuation assumes durable IP growth; TP at HKD 100 to 105 with downgrade risk in 2H26.


2026 High Conviction: Sell Pop Mart Intl (9992 HK)

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The process in the <a href="https://www.smartkarma.com/entities/toyota-industries-corp" target="_blank" data-smartkarma-citation="entities:4500:1" rel="noopener">Toyota Industries (6201 JP)</a> transaction is egregiously bad and lacking in  transparency. This deal, as structured, is block-able, even if bumped.</li>
<li>There's been a lot of enthusiasm for HK spin-offs of late (<a href="https://www.smartkarma.com/entities/zijin-mining-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:6358:1" rel="noopener">Zijin Mining (2899 HK)</a> and <a href="https://www.smartkarma.com/entities/miniso-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:36659:1" rel="noopener">MINISO (9896 HK)</a>). I'm not convinced <a href="https://www.smartkarma.com/entities/dongfeng-motor-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:910:1" rel="noopener">Dongfeng Motor (489 HK)</a> deserves similar accolades.  </li>
<li>If you've the ability to borrow <a href="https://www.smartkarma.com/entities/aeon-co-ltd" target="_blank" data-smartkarma-citation="entities:3:1" rel="noopener">Aeon (8267 JP)</a>, this promises to be fun/interesting. If you're a long-only investor, it's more nuanced. And it depends on where you are post-tender.</li>
</ul>


The process in the Toyota Industries (6201 JP) transaction is egregiously bad and lacking in  transparency. This deal, as structured, is block-able, even if bumped.
There's been a lot of enthusiasm for HK spin-offs of late (Zijin Mining (2899 HK) and MINISO (9896 HK)). I'm not convinced Dongfeng Motor (489 HK) deserves similar accolades.  
If you've the ability to borrow Aeon (8267 JP), this promises to be fun/interesting. If you're a long-only investor, it's more nuanced. And it depends on where you are post-tender.


Last Week In Event SPACE: Toyota Inds, Dongfeng Motors, Aeon/TSURUHA, Jinke Smart, Genting Malaysia

China

MINISO is a global retailer and variety store chain specializing in design-led lifestyle and pop toy products. The company offers a wide range of household and consumer goods, including cosmetics, stationery, toys, kitchenware, home decor, and electronics, often featuring intellectual property (IP) collaborations. MINISO Group Holding Ltd. was founded in 2013 and is headquartered in Guangzhou, China.

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MINISO (9896 HK)

Busy Ming (1768 HK) IPO: Not Expensive with Moderate Upside

Busy Ming outperforms peers in F&B retailing at a 3-year EPS CAGR of 43.1%, with a cheap IPO at 13x FY26F and 10.2x FY27F PERs. The fair value is...

Osbert Tang, CFA

Sell Pop Mart (9992 HK) Updates (2026 Jan): Offline Channel Checks and Trend Data

Short Pop Mart: We conducted shop visit in the overseas market, specifically Singapore and Malaysia. What we have observed is consistent with our...

Ke Yan, CFA, FRM

Hong Kong Buybacks Weekly (Jan 2nd): Tencent, Xiaomi, Cosco Shipping

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

2026 High Conviction: Sell Pop Mart Intl (9992 HK)

Pop Mart’s valuation assumes enduring super-IP momentum. With Labubu hype fading and no clear second growth engine, earnings risk skews to the...

Ke Yan, CFA, FRM

Last Week In Event SPACE: Toyota Inds, Dongfeng Motors, Aeon/TSURUHA, Jinke Smart, Genting Malaysia

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Busy Ming (1768 HK) IPO: Not Expensive with Moderate Upside

​Busy Ming outperforms peers in F&B retailing at a 3-year EPS CAGR of 43.1%, with a cheap IPO at 13x FY26F and 10.2x FY27F PERs. The fair value is...

Osbert Tang, CFA

Sell Pop Mart (9992 HK) Updates (2026 Jan): Offline Channel Checks and Trend Data

Short Pop Mart: We conducted shop visit in the overseas market, specifically Singapore and Malaysia. What we have observed is consistent with our...

Ke Yan, CFA, FRM

Hong Kong Buybacks Weekly (Jan 2nd): Tencent, Xiaomi, Cosco Shipping

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

2026 High Conviction: Sell Pop Mart Intl (9992 HK)

Pop Mart’s valuation assumes enduring super-IP momentum. With Labubu hype fading and no clear second growth engine, earnings risk skews to the...

Ke Yan, CFA, FRM

Last Week In Event SPACE: Toyota Inds, Dongfeng Motors, Aeon/TSURUHA, Jinke Smart, Genting Malaysia

It’s Sunday! Pour yourself a coffee, grab a comfortable seat, and sift through a brief summary of insights on various events discussed during the...

David Blennerhassett

Busy Ming outperforms peers in F&B retailing at a 3-year EPS CAGR of 43.1%, with a cheap IPO at 13x FY26F and 10.2x FY27F PERs. The fair value is...