Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

China Merchants China Direct Investments / Event-Driven

China Merchants China Direct Investments (133 HK)

<ul>
<li>Activist Argyle Street's approach to closed-end investment company <a href="https://www.smartkarma.com/entities/china-merchants-china-direct-investments" target="_blank" data-smartkarma-citation="entities:6862:1" rel="noopener">China Merchants China Direct Investments (133 HK)</a> (CMCDI) has a certain David Webb-like quality.</li>
<li>Apart from the deep value angle, the analysis of director Elizabeth Kan's potential conflict of interest is particularly insightful. Argle will vote against Kan's re-election at the 20th June AGM</li>
<li>Given this upcoming vote, as I've done with <a href="https://www.smartkarma.com/entities/giordano-international-ltd" target="_blank" data-smartkarma-citation="entities:13899:1" rel="noopener">Giordano (709 HK)</a> and <a href="https://www.smartkarma.com/entities/l-occitane-international-sa" target="_blank" data-smartkarma-citation="entities:6772:1" rel="noopener">L'Occitane (973 HK)</a> previously, it's useful to investigate the lesser-known shareholder register, a byproduct of investigative disclosure reports.</li>
</ul>


Activist Argyle Street's approach to closed-end investment company China Merchants China Direct Investments (133 HK) (CMCDI) has a certain David Webb-like quality.
Apart from the deep value angle, the analysis of director Elizabeth Kan's potential conflict of interest is particularly insightful. Argle will vote against Kan's re-election at the 20th June AGM
Given this upcoming vote, as I've done with Giordano (709 HK) and L'Occitane (973 HK) previously, it's useful to investigate the lesser-known shareholder register, a byproduct of investigative disclosure reports.


CMCDI (133 HK): AGM Outcome May Provide Another Leg-Up

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

Xunfei Healthcare Technology / Equity Bottom-Up

<ul><li>Xunfei Healthcare reported mixed 1H25 results.</li><li>G-end business revenue increased 87% YoY to RMB141mn, and accounted for 30.4% of our full-year forecast, exceeding the historical average of ~28%.</li><li>B-end revenue came under pressure, declining 10% YoY to RMB53mn.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Xunfei Healthcare reported mixed 1H25 results.G-end business revenue increased 87% YoY to RMB141mn, and accounted for 30.4% of our full-year forecast, exceeding the historical average of ~28%.B-end revenue came under pressure, declining 10% YoY to RMB53mn.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Xunfei Healthcare - Government Remains the Primary Driving Force of Medical AI Applications

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Hangzhou Diagens Biotechnology / Equity Capital Markets

<ul>
<li>The IPO pricing is HK$95.6-112.5 per share. If based on our forecast in 2025 and 2026, P/S is as high as 50x-59x and 21.4x-25.2x, respectively, much higher than peers.</li>
<li>The IPO valuation is far higher than traditional medical device companies, reflecting the extremely optimistic expectations for the potential of Diagens’ AI technology and high growth prospects in the future</li>
<li>The IPO pricing has “overdrawn” the growth expectations for next two years.A more comfortable valuation is 10x-15x P/S. If AI AutoVision achieves rapid growth, then 20x-25x P/S looks more persuasive.  </li>
</ul>


The IPO pricing is HK$95.6-112.5 per share. If based on our forecast in 2025 and 2026, P/S is as high as 50x-59x and 21.4x-25.2x, respectively, much higher than peers.
The IPO valuation is far higher than traditional medical device companies, reflecting the extremely optimistic expectations for the potential of Diagens’ AI technology and high growth prospects in the future
The IPO pricing has “overdrawn” the growth expectations for next two years.A more comfortable valuation is 10x-15x P/S. If AI AutoVision achieves rapid growth, then 20x-25x P/S looks more persuasive.  


Pre-IPO Hangzhou Diagens Biotechnology (PHIP Updates) - The IPO Pricing Is Expensive

<ul>
<li>The willingness of hospitals/patients to purchase medical AI products/services is still not strong enough. The real turning point for the commercialization of medical AI hasn’t arrived yet.</li>
<li>The small revenue scale reflects that Diagens’ products have not received widespread recognition from the medical system. Market education cost would be high, leading to increasing selling and distribution expenses</li>
<li>Valuation should be higher than <a href="https://www.smartkarma.com/entities/basecare-medical-device-corporation-limited" target="_blank" data-smartkarma-citation="entities:31086:1" rel="noopener">Basecare (2170 HK)</a> who just focuses on testing kits in assisted reproduction, but should be lower than <a href="https://www.smartkarma.com/entities/xunfei-healthcare-technology" target="_blank" data-smartkarma-citation="entities:40836:1" rel="noopener">Xunfei Healthcare</a>, who has better commercialization performance/channels advantage.</li>
</ul>


The willingness of hospitals/patients to purchase medical AI products/services is still not strong enough. The real turning point for the commercialization of medical AI hasn’t arrived yet.
The small revenue scale reflects that Diagens’ products have not received widespread recognition from the medical system. Market education cost would be high, leading to increasing selling and distribution expenses
Valuation should be higher than Basecare (2170 HK) who just focuses on testing kits in assisted reproduction, but should be lower than Xunfei Healthcare, who has better commercialization performance/channels advantage.


Pre-IPO Hangzhou Diagens Biotechnology - The Turning Point of Medical Imaging AI Has Not Arrived

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>We see 38 potential and close adds and 51 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.</li>
<li>There have been many new listings in the last weeks of December. Some of them are fairly large and will be added and that increases the number of potential deletions.</li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


We see 38 potential and close adds and 51 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
There have been many new listings in the last weeks of December. Some of them are fairly large and will be added and that increases the number of potential deletions.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025

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Xunfei Healthcare Technology (XHT HK)

CMCDI (133 HK): AGM Outcome May Provide Another Leg-Up

CMCDI is cheap. If small, illiquid names, with a activism angle are your thing, pick up shares here. Keep an eye on the AGM. If Kan is booted, this...

David Blennerhassett

Xunfei Healthcare - Government Remains the Primary Driving Force of Medical AI Applications

G-end business revenue increased 87% YoY to RMB141mn, and accounted for 30.4% of our full-year forecast, exceeding the historical average of ~28%.

CMB International

Pre-IPO Hangzhou Diagens Biotechnology (PHIP Updates) - The IPO Pricing Is Expensive

Diagens' IPO pricing has "overdrawn" the growth expectation for next two years, with valuation far exceeding peers.Comfortable P/S is 10x-15x,...

Xinyao (Criss) Wang

Pre-IPO Hangzhou Diagens Biotechnology - The Turning Point of Medical Imaging AI Has Not Arrived

Hospital/patients are not yet fully embracing medical AI, hindering commercialization.Diagens faces challenges in gaining recognition considering...

Xinyao (Criss) Wang

HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025

There could be 89 changes for the HSCI in March. That could result in 73 changes to the Southbound Stock Connect list and also have implications...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

CMCDI (133 HK): AGM Outcome May Provide Another Leg-Up

CMCDI is cheap. If small, illiquid names, with a activism angle are your thing, pick up shares here. Keep an eye on the AGM. If Kan is booted, this...

David Blennerhassett

Xunfei Healthcare - Government Remains the Primary Driving Force of Medical AI Applications

G-end business revenue increased 87% YoY to RMB141mn, and accounted for 30.4% of our full-year forecast, exceeding the historical average of ~28%.

CMB International

Pre-IPO Hangzhou Diagens Biotechnology (PHIP Updates) - The IPO Pricing Is Expensive

​Diagens' IPO pricing has "overdrawn" the growth expectation for next two years, with valuation far exceeding peers.Comfortable P/S is 10x-15x,...

Xinyao (Criss) Wang

Pre-IPO Hangzhou Diagens Biotechnology - The Turning Point of Medical Imaging AI Has Not Arrived

​Hospital/patients are not yet fully embracing medical AI, hindering commercialization.Diagens faces challenges in gaining recognition considering...

Xinyao (Criss) Wang

HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025

There could be 89 changes for the HSCI in March. That could result in 73 changes to the Southbound Stock Connect list and also have implications...

Brian Freitas

Diagens' IPO pricing has "overdrawn" the growth expectation for next two years, with valuation far exceeding peers.Comfortable P/S is 10x-15x,...

Hospital/patients are not yet fully embracing medical AI, hindering commercialization.Diagens faces challenges in gaining recognition considering...