Daily Brief China: SHEIN Global Holdings, Guotai Junan International, Sichuan Biokin Pharmaceutical Co Ltd, Tencent Holdings (ADR), New Oriental Education & Techn, AIA Group, Ab&B Bio-Tech, Alpha Professional and more

• My base case valuation of Shein is market cap of US$26 billion, lower than the target IPO valuation range of US$30 billion to US$40 billion that the company is seeking.
• Given the lack of upside, I have a Negative View of the Shein IPO.
• I estimate Shein to generate net revenue of US$42.8 billion (up 2.3% YoY) in 2026, US$44.4 billion (up 3.7% YoY), and US$47.5 billion (up 6.9% YoY) in 2028.

• Guotai Junan International (1788 HK)/GJTAI announced a preconditional scheme offer from Guotai Haitong Securities (2611 HK) at HK$3.00, a 44.2% premium to the last close. The offer price is final. 
• HKEx privatisations, which require regulatory approvals, have recently been shunned. However, the precondition related to NDRC and Shanghai SASAC regulatory approvals is low risk. 
• While the offer is below the six-month high, it is attractive compared to peer and precedent transaction multiples. Barring a significant re-rating of peers, this should get done. 

• Sichuan Biokin Pharmaceutical Co., Ltd. is an integrated biopharmaceutical group founded in 1996, focused on developing oncology therapeutics using ADC, ARC, and TCE technologies.
• Iza-bren is the world’s first approved bispecific ADC, and the company has a global strategic license agreement with BMS, receiving US$800 million upfront.
• The company reported RMB5,821,050 thousand revenue and a 95.0% gross profit margin in 2024, alongside a RMB1,053,618 thousand net loss in 2025.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Tencent’s dominance is anchored by its Weixin/WeChat super-app, a vast ecosystem integrating social media, gaming, payments, and business services, creating a powerful network effect and high user stickiness.
• Future growth is increasingly reliant on the enterprise segment, particularly FinTech and Cloud/AI services, alongside the international expansion of its world-leading gaming division to offset maturing domestic markets.
• Significant risks persist from the stringent and evolving regulatory landscape in China, which impacts operations from gaming to fintech, and intense domestic competition from tech giants like Alibaba and ByteDance.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• In this insight we analyze SHEIN’s Marketing expenses, which rose sharply in FY25 and Q126
• We also revisit SHEIN’s Fulfilment expenses, which likely ballooned in Q226 on higher fuel
• We believe high and rising Marketing, Fulfilment expenses to smother FY26 margins

• New Oriental Education & Technology Group reported its fourth quarter and full fiscal year 2026 results demonstrating revenue growth across several core and new business segments amid a challenging economic and regulatory environment.
• The company’s total net revenue increased by 23% year-over-year to $1.53 billion in Q4, driven by progress in its core education business, overseas test preparation, adult and university student programs, and new initiatives such as non-academic tutoring and intelligent learning systems.
• Non-GAAP operating income rose 34.7% to $110 million, reflecting improved operational efficiency and margin expansion despite some one-off restructuring costs.

• Dominant Pan-Asian Leader with Strong Growth: AIA is the largest independent publicly listed pan-Asian life insurance group, operating across 18 markets. The company demonstrates robust growth, with a significant increase in the Value of New Business (VONB), a key performance metric, driven by strong demand in markets like Hong Kong, Thailand, and Singapore.
• Premier Distribution and Brand Trust: A key competitive advantage is its extensive and high-quality ‘Premier Agency’ distribution network, which is a primary driver of new business. This is complemented by a century-long brand heritage that has built significant customer trust, a crucial asset for a long-term business like life insurance.
• Favorable Structural Tailwinds vs. Macroeconomic Risks: AIA is well-positioned to capitalize on the structural under-penetration of life and health insurance in Asia, driven by rising wealth, aging populations, and increasing health awareness. However, the business faces risks from economic volatility, interest rate fluctuations, and evolving regulations across its diverse markets, including recent concerns over potential Chinese taxation on overseas policies.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Market Leader with Premier Distribution: AIA is the largest independent, publicly listed pan-Asian life insurance group, with a dominant presence in 18 Asia-Pacific markets. Its key competitive advantage, or ‘moat’, is its high-quality ‘Premier Agency’ force, which is significantly more productive than peers and has been a consistent driver of profitable new business growth.
• Structural Growth Tailwinds: The company is strategically positioned to benefit from powerful long-term demographic and economic trends in Asia, including a rapidly growing middle class, rising wealth, aging populations, and a substantial ‘protection gap’ due to limited social welfare systems.
• Strong Financial Performance and Capital Management: AIA has a track record of delivering strong growth in key metrics like Value of New Business (VONB) and operating profit. The company maintains a robust capital position and is committed to returning capital to shareholders through consistent dividend growth and share buyback programs.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Ab&B Bio-Tech is a China-based vaccine developer that successfully listed on the Hong Kong Stock Exchange in August 2025, raising approximately HK$431-518 million. The company’s primary focus is on the research, development, manufacturing, and commercialization of innovative vaccines, with its core products being a quadrivalent subunit influenza vaccine, which has been commercialized, and a lyophilized human rabies vaccine candidate in late-stage clinical trials.
• The company’s stock has been suspended from trading on the Hong Kong Stock Exchange since April 1, 2026. This suspension is due to a delay in the publication of its 2025 annual results, pending the completion of an audit into certain fund investments and consultancy payments. This raises significant corporate governance and transparency concerns.
• While the company has demonstrated strong revenue growth from its newly launched influenza vaccine, it operates in a highly competitive Chinese vaccine market. It faces pressure on pricing and demand, and its commercialization strategy has been questioned by analysts. The company remains unprofitable, and its future outlook is clouded by the ongoing audit and trading suspension.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Alpha Professional Holdings is a highly diversified investment holding company with operations in commoditized and competitive sectors, including milk product trading, logistics, property investment, and cleaning services.
• The company exhibits extreme financial volatility, with a dramatic swing from a significant net loss in FY2025 to a substantial profit in FY2026, despite a long-term trend of declining revenue. This makes future performance difficult to predict.
• Valuation presents a mixed picture: a very low P/E ratio of 0.9x suggests undervaluation, but this is contrasted by a high P/B ratio of 3.2x relative to peers and a history of no dividend payments, reflecting high investor uncertainty.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.