Daily Brief China: Biren Technology, Ingenic Semiconductor, Tencent, Alibaba, Zijin Mining, Tencent Music Entertainment, Lonking, Autel Intelligent Technology C, RelyEZ Energy Storage Technology and more

• The changes to a global index in August will be announced pre-market open Thursday and will be implemented at the close of trading on 31 August.
• The big market moves since the last rebalance result in many changes with the final number dependent on the day picked to compute market cap and free float market cap.
• The forecast adds have outperformed the forecast deletes over the last 1, 2 and 3 months but near-term performance has been far from awesome due to the momentum unwind.

• Ingenic Semiconductor, a fabless memory and computing IC designer, is seeking an A+H listing. GTJA is the sole sponsor.
• We look at the company’s core segments: memory ICs and computing ICs.
• We discuss our preliminary thoughts on the company’s valuation based on the A-H premium.

• Tencent (700 HK) will report earnings on August 12th. This tactical view updates the Tencent’s analysis presented on July 17th with new support and targets calculated ahead of the earnings.
• The Market expectation is framed as solid core operational delivery under margin pressure. Any minimal disappointment could lead to a (continuation of the) sell-off.
• At the end of last week our model flagged the stock as overbought. Although a continuation of the rally is possible for a third week or more, it appears unlikely.

• Alibaba’s strategic consolidation in late 2025 officially dismantled the complex “1+6+N” structure, integrating domestic e-commerce (Taobao/Tmall), Ele.me, and Fliggy into a unified China E-commerce Group to eliminate internal friction and counter PDD and Douyin more effectively.
• The domestic e-commerce monetization engine has established a structural floor, driven by the rollout of the 0.6% software service fee on Taobao and the rapid penetration of the AI-powered Quanzhantui marketing tool, offsetting the drag of lower-monetization Taobao merchant traffic.
• Cloud Intelligence margins are undergoing a structural inflection as triple-digit growth in high-end AI compute and proprietary model (Qwen) hosting offsets aggressive price cuts on commodity public cloud offerings. AI-related products now account for 30% of external cloud revenue, with AI ARR exceeding RMB 35.8 billion.
• International Commerce (AIDC) is nearing structural breakeven, with Q4 FY2026 adjusted EBITA losses narrowing to RMB 138 million. This was driven by sequential unit economics improvements in AliExpress “Choice” and deep integration with Cainiao following its IPO withdrawal.

• Since the last reshuffle (July 9), our Model Portfolio has appreciated 1.46%. MSCI Asia ex Japan index (MXASJ) has dropped 1.77%. AI infrastructure stocks primarily contributed to the portfolio drawdown.
• Focus on AI “picks and shovels” providers, industrials, defense, industrial metals and banks remain. We also like Indian automobiles. We replace Hyundai Engineering and Construction with HD Hyundai Heavy Industries.
• We are overweight on HK/China, Korea and India. We are underweight Taiwan but overweight Taiwan technology. We are Neutral ASEAN.

• 2Q26 revenue +5.8% to RMB8.93bn; music services +11%, membership accelerated to +8.1%, IP/concert engine +16%. Non-IFRS net profit +4.4%. Clean quarter, decelerating social entertainment drag notwithstanding.
• Ximalaya (closed 18 May) added RMB407mn revenue but reshapes the balance sheet: RMB13.1bn new borrowings, goodwill RMB29.8bn. Meanwhile, management repurchased US$400mn of stock at US$9.2/ADS average.
• BULLISH. ACCUMULATE maintained; FV trimmed to HKD60/USD15.40 (from HKD64), pegged to 17x FY26 PE (-1SD below mean) on ~RMB10.0bn non-IFRS earnings. ~56% UPSIDE potential. 

• The market is underestimating Lonking (3339 HK)‘s earnings, with consensus forecasts pointing to an 8.5% decline in 2H26. Instead, industry wheel loader sales grew 30.8% in Jul. 
• Its net cash surged 2.8x in the last ten years, and by end-FY26, it will reach Rmb8.2bn, or 73.9% of its current market capitalisation.
• FY26-28F average ROE will reach 12.4%, the highest in the last five years, justifying its 0.9x P/B. Ex-net cash, its FY25 ROE will instead be 23.5%.

• Autel’s core business focuses on two main areas: vehicle diagnosis solution solutions and smart charging solutions. Gross margin improved simultaneously with revenue growth, demonstrating the scale effect of platform-based business.
• If the AI business proportion continues to increase, the valuation multiple is expected to rise. Embodied intelligence commercialization progress also has big potential. However, geopolitical risk may bring valuation discount.
• Autel has a weaker ability to withstand risks compared to competitors with diversified strategies. A comfortable valuation range could be P/E of 15-24x, based on 2026 net profit forecast.

• In this edition: • TKH Group | strong performance by to be divested businesses – reiterates FY26 outlook • PostNL | Monday concentration remains a structural drag • Austrian Post | expands e-commerce footprint to Slovakia via FHB Group acquisition • E-commerce & Logistics | Shein IPO: sub-USD 30bn pitch reflects structural headwinds

• RelyEZ Energy Storage Technology Co., Ltd. is a leading integrated ESS solutions provider in China, ranking 10th by shipment volume and 4th by newly installed capacity in 2025.
• Total revenue increased from RMB434.6 million in 2023 to RMB1,867.6 million in 2025, with a 6.8 GWh total production capacity.
• Revenue was RMB1,867,611 in 2025, with gross profit of RMB300,609 and profit before tax of RMB174,937.

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