HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Since 2025, there have been 48 H-share IPOs of listed A-shares, with most seeing HA discounts widen post-listing, with only 20 narrowing.</li>
<li>Only AI-related H-share IPOs achieved meaningful HA discount narrowing (over 10pp), with non-AI names failing since May 2025.</li>
<li>The market capitalisation of these IPOs is not decisive for the HA discount change, and the overall market effect has little impact. Hence, the AI theme remains the key.</li>
</ul>


Since 2025, there have been 48 H-share IPOs of listed A-shares, with most seeing HA discounts widen post-listing, with only 20 narrowing.
Only AI-related H-share IPOs achieved meaningful HA discount narrowing (over 10pp), with non-AI names failing since May 2025.
The market capitalisation of these IPOs is not decisive for the HA discount change, and the overall market effect has little impact. Hence, the AI theme remains the key.


China Strategy: Evolution of H-Share IPO Premium/Discount

<ul>
<li>The H-share IPOs of listed A-shares since 2025 witnessed a 6.6pp contraction in HA discount, compared with only 2.7pp for the Hang Seng Stock Connect China AH Premium Index.</li>
<li>
<a href="https://www.smartkarma.com/entities/giga-device-semiconductor-inc-class-h" target="_blank" data-smartkarma-citation="entities:46238:1" rel="noopener">GigaDevice Semiconductor (3986 HK)</a>, <a href="https://www.smartkarma.com/entities/montage-technology-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:46333:1" rel="noopener">Montage Technology (6809 HK)</a>, and <a href="https://www.smartkarma.com/entities/victory-giant-technology-huizhou-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:48083:1" rel="noopener">Victory Giant (2476 HK)</a> are the only 3 with both good discount contraction, fast growth and large size.</li>
<li>
<a href="https://www.smartkarma.com/entities/contemporary-amperex-technology-co-limited-class-h" target="_blank" data-smartkarma-citation="entities:45179:1" rel="noopener">Contemporary Amperex Technology (3750 HK)</a> is large in size but not as fast in growth. <a href="https://www.smartkarma.com/entities/delton-technology" target="_blank" data-smartkarma-citation="entities:47605:1" rel="noopener">Delton Technology (1989 HK)</a>'s market capitalisation is relatively small.  </li>
</ul>


The H-share IPOs of listed A-shares since 2025 witnessed a 6.6pp contraction in HA discount, compared with only 2.7pp for the Hang Seng Stock Connect China AH Premium Index.

GigaDevice Semiconductor (3986 HK), Montage Technology (6809 HK), and Victory Giant (2476 HK) are the only 3 with both good discount contraction, fast growth and large size.

Contemporary Amperex Technology (3750 HK) is large in size but not as fast in growth. Delton Technology (1989 HK)'s market capitalisation is relatively small.  


HK Strategy: H-Share IPOs - Both Growth and Size Count Now

Equity Capital Markets

Shenzhen Transsion Holdings / Equity Capital Markets

<ul>
<li>The H-share IPO of <a href="https://www.smartkarma.com/entities/shenzhen-transsion-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:58740:1" rel="noopener">Shenzhen Transsion Holdings (2636 HK)</a>, a smart device and mobile Internet service provider, appears to provide some upside at the maximum IPO price.</li>
<li>Its earnings have recovered sharply in 1H26, and for FY25-28F, it is expected to achieve an EPS CAGR of 30.2% as it expands its market and products.</li>
<li>We value it at 12.5x FY26 PER, 10% discount to <a href="https://www.smartkarma.com/entities/tcl-electronics-holdings-limited" target="_blank" data-smartkarma-citation="entities:15654:1" rel="noopener">TCL Electronics (1070 HK)</a>, implying a fair price of HK$43.73, or 12.7% upside.  </li>
</ul>


The H-share IPO of Shenzhen Transsion Holdings (2636 HK), a smart device and mobile Internet service provider, appears to provide some upside at the maximum IPO price.
Its earnings have recovered sharply in 1H26, and for FY25-28F, it is expected to achieve an EPS CAGR of 30.2% as it expands its market and products.
We value it at 12.5x FY26 PER, 10% discount to TCL Electronics (1070 HK), implying a fair price of HK$43.73, or 12.7% upside.  


Shenzhen Transsion (2636 HK) IPO: Still Some Upside

<ul>
<li>Since 2025, four H-share IPOs of the A-shares have been trading below their listing price.  They are either of slow growth or a light HA discount.</li>
<li>
<a href="https://www.smartkarma.com/entities/foshan-haitian-flavouring-food-company-ltd" target="_blank" data-smartkarma-citation="entities:44279:1" rel="noopener">Foshan Haitian (3288 HK)</a> and <a href="https://www.smartkarma.com/entities/kin-yat-holdings-ltd" target="_blank" data-smartkarma-citation="entities:13688:1" rel="noopener">Fibocom Wireless (638 HK)</a> are burdened by slow earnings, while <a href="https://www.smartkarma.com/entities/seres-group" target="_blank" data-smartkarma-citation="entities:45945:1" rel="noopener">Seres Group (9927 HK)</a> and <a href="https://www.smartkarma.com/entities/car-inc" target="_blank" data-smartkarma-citation="entities:942:1" rel="noopener">Joyson Electronics (699 HK)</a> are weighted down by light discount. </li>
<li>
<a href="https://www.smartkarma.com/entities/shanghai-longcheer-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:36881:1" rel="noopener">Shanghai Longcheer Technology (603341 CH</a><a target="_blank" rel="noopener"> )</a>'s H-share IPO appears attractive, while <a href="https://www.smartkarma.com/entities/muyuan-foods" target="_blank" data-smartkarma-citation="entities:45241:1" rel="noopener">Muyuan Foods (MUYUAN HK)</a> may need a steeper discount given its weaker earnings.</li>
</ul>


Since 2025, four H-share IPOs of the A-shares have been trading below their listing price.  They are either of slow growth or a light HA discount.

Foshan Haitian (3288 HK) and Fibocom Wireless (638 HK) are burdened by slow earnings, while Seres Group (9927 HK) and Joyson Electronics (699 HK) are weighted down by light discount. 

Shanghai Longcheer Technology (603341 CH )'s H-share IPO appears attractive, while Muyuan Foods (MUYUAN HK) may need a steeper discount given its weaker earnings.


HK Strategy: What to Avoid in the H-Share IPO of A-Shares?

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>The Hong Kong Alpha portfolio returned -2.89% in November versus +1.72% for its benchmark index. The HK Alpha portfolio has outperformed Hong Kong indexes by 33% to 45% since inception.</li>
<li>The portfolio continues to generate 57% of its returns from alpha (idiosyncratic returns) while maintaining a Sharpe ratio of 2.19 YTD.</li>
<li>We have sold positions in the materials and industrials sectors and added positions in telecom, gold, and insurance industries at the end of November.</li>
</ul>


The Hong Kong Alpha portfolio returned -2.89% in November versus +1.72% for its benchmark index. The HK Alpha portfolio has outperformed Hong Kong indexes by 33% to 45% since inception.
The portfolio continues to generate 57% of its returns from alpha (idiosyncratic returns) while maintaining a Sharpe ratio of 2.19 YTD.
We have sold positions in the materials and industrials sectors and added positions in telecom, gold, and insurance industries at the end of November.


HONG KONG ALPHA PORTFOLIO: (November 2025)

China

Zhejiang Sanhua Intelligent Controls Co., Ltd. researches, manufactures, and sells refrigeration and air-conditioning electrical parts and auto parts. The company specializes in environmentally friendly thermal management solutions, developing HVAC systems, home appliance equipment, and thermal management solutions for new energy vehicles. It was founded in 1994 and is headquartered in Shaoxing, China.

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Sanhua Intelligent Controls (2050 HK)

Shenzhen Transsion (2636 HK) IPO: Still Some Upside

Shenzhen Transsion's IPO is priced for an 12.7% upside. 1H26 earnings have recovered, and the 3-year EPS CAGR will reach 30.2%. Conservative...

Osbert Tang, CFA

HONG KONG ALPHA PORTFOLIO: (November 2025)

We made small changes to the HK Alpha portfolio mid-month. At the close on 12/12 we sold all of First Pacific (142 HK) and added 2% to our...

David Mudd

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China Strategy: Evolution of H-Share IPO Premium/Discount

​Most of the H-share IPOs of listed A-shares since 2025 saw HA discounts widen post-listing, with only AI-related IPOs achieving meaningful...

Osbert Tang, CFA

HK Strategy: H-Share IPOs - Both Growth and Size Count Now

​H-share IPOs of A-shares since 2025 show significant HA discount contraction, with GigaDevice Semiconductor, Montage Technology, and Victory Giant...

Osbert Tang, CFA

Shenzhen Transsion (2636 HK) IPO: Still Some Upside

Shenzhen Transsion's IPO is priced for an 12.7% upside. 1H26 earnings have recovered, and the 3-year EPS CAGR will reach 30.2%. Conservative...

Osbert Tang, CFA

HK Strategy: What to Avoid in the H-Share IPO of A-Shares?

​Four H-share IPOs of A-shares since 2025 are trading below the listing price due to slow growth or a light discount. Meanwhile, Shanghai Longcheer...

Osbert Tang, CFA

HONG KONG ALPHA PORTFOLIO: (November 2025)

We made small changes to the HK Alpha portfolio mid-month. At the close on 12/12 we sold all of First Pacific (142 HK) and added 2% to our...

David Mudd

Most of the H-share IPOs of listed A-shares since 2025 saw HA discounts widen post-listing, with only AI-related IPOs achieving meaningful...

H-share IPOs of A-shares since 2025 show significant HA discount contraction, with GigaDevice Semiconductor, Montage Technology, and Victory Giant...

Four H-share IPOs of A-shares since 2025 are trading below the listing price due to slow growth or a light discount. Meanwhile, Shanghai Longcheer...