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

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

Xunfei Healthcare Technology / Equity Capital Markets

<ul>
<li>Medical industry characteristics are the seriousness of diagnosis/treatment and the irreversibility of the process, which are the difficulties in implementing technology. The value that AI can provide is limited. </li>
<li>Xunfei’s business model is not To C, but To G (government) model. It’s not possible for SOE customers to pay high price for Xunfei’s AI model/products, leading to questionable profitability.</li>
<li>Pre-IPO valuation has reached RMB8.4 billion. Without sustainable growth and stable profitability, valuation/liquidity of Xunfei after listing wouldn’t be good. We think Xunfei’s valuation could be similar to Yidu Tech.</li>
</ul>


Medical industry characteristics are the seriousness of diagnosis/treatment and the irreversibility of the process, which are the difficulties in implementing technology. The value that AI can provide is limited. 
Xunfei’s business model is not To C, but To G (government) model. It’s not possible for SOE customers to pay high price for Xunfei’s AI model/products, leading to questionable profitability.
Pre-IPO valuation has reached RMB8.4 billion. Without sustainable growth and stable profitability, valuation/liquidity of Xunfei after listing wouldn’t be good. We think Xunfei’s valuation could be similar to Yidu Tech.


Pre-IPO Xunfei Healthcare Technology (PHIP Updates) - Profitability Are Always the Pain Points

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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

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

Pre-IPO Xunfei Healthcare Technology (PHIP Updates) - Profitability Are Always the Pain Points

Challenges in implementing AI technology in medical industry will lead to low value. Xunfei's To G model faces profitability issues. High...

Xinyao (Criss) Wang

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

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

Pre-IPO Xunfei Healthcare Technology (PHIP Updates) - Profitability Are Always the Pain Points

​Challenges in implementing AI technology in medical industry will lead to low value. Xunfei's To G model faces profitability issues. High...

Xinyao (Criss) Wang

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...

Challenges in implementing AI technology in medical industry will lead to low value. Xunfei's To G model faces profitability issues. High...