Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>The materials sector continues its outperformance in Hong Kong, however the recent sharp pullback showed a weakening in strength and momentum.</li>
<li>Mainland investors continued to buy Hong Kong listed stocks heavily during the market pullback earlier this month.</li>
<li>
<a href="https://www.smartkarma.com/entities/zhejiang-sanhua-intelligent-controls-co-ltd" target="_blank" data-smartkarma-citation="entities:45277:1" rel="noopener">Zhejiang Sanhua Intelligent Controls (2050 HK)</a> quashed market rumors about a large robotic order from Tesla (TSLA US); however, it continues discussions on cooperation opportunities.
</li>
</ul>


The materials sector continues its outperformance in Hong Kong, however the recent sharp pullback showed a weakening in strength and momentum.
Mainland investors continued to buy Hong Kong listed stocks heavily during the market pullback earlier this month.

Zhejiang Sanhua Intelligent Controls (2050 HK) quashed market rumors about a large robotic order from Tesla (TSLA US); however, it continues discussions on cooperation opportunities.



The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (October 20)

Thematic (Sector/Industry)

<ul>
<li>China is rapidly integrating artificial intelligence (AI) and robotics into its industrial sector to cement its position as a global leader in high-tech manufacturing.</li>
<li>With technological prowess, a large, established manufacturing base, and government support, Chinese factories will dominate automated manufacturing globally for the foreseeable future.</li>
<li>We look at a basket of Chinese manufacturers who are benefiting from automation with AI and robotics.  All the companies export a substantial portion of their products.</li>
</ul>


China is rapidly integrating artificial intelligence (AI) and robotics into its industrial sector to cement its position as a global leader in high-tech manufacturing.
With technological prowess, a large, established manufacturing base, and government support, Chinese factories will dominate automated manufacturing globally for the foreseeable future.
We look at a basket of Chinese manufacturers who are benefiting from automation with AI and robotics.  All the companies export a substantial portion of their products.


CHINA: Industrial Manufacturing Companies Up Their Game With Robotics!

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Foxconn Industrial Internet / Technical Analysis

<ul>
<li>We remain near-term bullish SPX and ACWI since 4/22/25, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.</li>
<li>We discussed in our July 31, 2025 Int'l Compass how $128, $125-$126, and $123-$123.50 were short-term supports to watch on ACWI-US, and ACWI-US found support at $128 the next day.</li>
<li>Europe (EURO STOXX 50) is the last of the major countries (from a global market cap perspective) to break out; we expect it to be next</li>
</ul>


We remain near-term bullish SPX and ACWI since 4/22/25, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.
We discussed in our July 31, 2025 Int'l Compass how $128, $125-$126, and $123-$123.50 were short-term supports to watch on ACWI-US, and ACWI-US found support at $128 the next day.
Europe (EURO STOXX 50) is the last of the major countries (from a global market cap perspective) to break out; we expect it to be next


Europe Next to Break Out?; Bullish Outlook Intact; Remain Overweight Korea, Greece, and the U.S.

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Changzhou Xingyu Automotive / Equity Capital Markets

<ul>
<li>Automotive lighting industry is currently in a period of product iteration driven by "electricization" and "intelligence".Value of individual vehicle lamps is on the rise, but price competition is equally intense.</li>
<li>As growth of the automotive lighting business approaches its ceiling, Xingyu is striving to create a new development narrative.But the overall embodied intelligence field is in early stage of industrialization</li>
<li>The valuations of the top-notch companies in the Hong Kong stock market's automotive parts sector are generally between 10x and 20x P/E. We think Xingyu’s A/H discount would be 15%-30%.   </li>
</ul>


Automotive lighting industry is currently in a period of product iteration driven by "electricization" and "intelligence".Value of individual vehicle lamps is on the rise, but price competition is equally intense.
As growth of the automotive lighting business approaches its ceiling, Xingyu is striving to create a new development narrative.But the overall embodied intelligence field is in early stage of industrialization
The valuations of the top-notch companies in the Hong Kong stock market's automotive parts sector are generally between 10x and 20x P/E. We think Xingyu’s A/H discount would be 15%-30%.   


Pre-IPO Changzhou Xingyu Automotive Lighting Systems (A/H Listing) - The Business and the Outlook

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.

Ningbo Tuopu Group   / Equity Capital Markets

<ul>
<li>Ningbo Tuopu, a leading automobile part manufacturer, is seeking an A+H listing. CITIC and UBS are the sponsors.</li>
<li>We look at the company's core segments: interior functional components and chassis systems.</li>
<li>We discussed our preliminary thoughts on the company's valuation based on A-H premium.</li>
</ul>


Ningbo Tuopu, a leading automobile part manufacturer, is seeking an A+H listing. CITIC and UBS are the sponsors.
We look at the company's core segments: interior functional components and chassis systems.
We discussed our preliminary thoughts on the company's valuation based on A-H premium.


Ningbo Tuopu (拓普集团) A+H Pre-IPO: Early Thoughts

Taiwan

Minth Group is a global automotive parts manufacturer specializing in the design, development, and production of exterior and structural components for passenger cars, including aluminum battery cases, trims, and body structural parts. The company also develops components for intelligent exteriors and electric vehicle motor systems. Headquartered in Taipei City, Taiwan, Minth Group was founded in 1992.

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Minth Group (425 HK)

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (October 20)

The materials sector continues its outperformance in Hong Kong, however the recent sharp pullback showed a weakening in strength and momentum.

David Mudd

CHINA: Industrial Manufacturing Companies Up Their Game With Robotics!

China is rapidly integrating artificial intelligence (AI) and robotics into its industrial sector to cement its position as a global leader in high...

David Mudd

Europe Next to Break Out?; Bullish Outlook Intact; Remain Overweight Korea, Greece, and the U.S.

Europe Next to Break Out?; China and Japan Remain Attractive and a big focus since our July 3rd report titled "China and Japan Breaking Out;"...

Vermilion Research

Pre-IPO Changzhou Xingyu Automotive Lighting Systems (A/H Listing) - The Business and the Outlook

Automotive lighting industry is now in a period of product iteration/price competition; Xingyu face challenges in early stage of embodied...

Xinyao (Criss) Wang

Ningbo Tuopu (拓普集团) A+H Pre-IPO: Early Thoughts

Ningbo Tuopu is seeking an A+H listing. In this note, we look at the company's business, its industry context and provide our early thought on...

Ke Yan, CFA, FRM

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