Daily Brief Equity Bottom-Up: MEITUAN: End of Subsidies Is Food for Thought !! and more

• Meituan (3690 HK) returned to profit in 2Q26 after 3 quarters of losses.  The company had a net income of RMB 2.16B vs. a consensus loss of RMB 1.23B.
• Operating profit surged to RMB 2.69 bn, an 11-fold increase YOY, as easing competition allowed the company to reduce food delivery subsidies, improving unit economics across food and non-food categories.
• Meituan’s profit surge, combined with JD.com cutting promotional spending and Alibaba reducing sales and marketing expenses, adds to the evidence that China’s quick-commerce price war may be peaking. 

• Physical AI optionality: Yaskawa’s ¥250bn investment plan and humanoid strategy position its servo, drive and actuator businesses to benefit from the Physical AI growth cycle. 
• Earnings inflection: Management targets ¥650bn revenue and ¥90bn OP by FY2029, with margins improving toward 15% as AI robotics and data-center demand ramp.
• Attractive risk/reward: Shares are down 40% from their YTD high and trade below historical multiples, offering ~33% upside, though humanoid adoption and FA capex remain key risks.

• Total US border crossings in July 2026 were up just 0.6% Y/Y (and down 5% vs July 2024)
• July 2026 crossings by aircraft were down over 3% Y/Y, and down 2% Y/Y in US West
• The figures from peak Summer travel period seem to confirm sluggish US tourism activity

• Hua Hong Grace (1347.HK) reported Q2 2026 revenue of $717.5 million, up 26.8% YoY and 8.6% QoQ, a record high and easily beating the guided midpoint of $695 million
• Gross margin reached 16.5%, up 5.6 percentage points YoY and 3.5 points QoQ, clearing the top end of the 14-16% guide.
• Looking ahead, the company forecasted current quarter revenues of $775 million at the midpoint, a roughly 8% sequential increase. Gross margin is expected to be ~17%, marginally up QoQ.

• Shenzhen International (152 HK)‘s loss-making 1H26 is disappointing, but looking ahead, the potential profit recovery in 2H26 is more important.  
• It may potentially book a significant gain from the South China Logistics Park transformation in 2H26, possibly leading to an attractive dividend yield of 8.7%.
• Its 0.33x 12-month forward P/B, 2SD below average, has already discounted the market concerns. Stripping out Shenzhen Expressway (600548 CH) , its other assets are free. 

• The S086 (Xinchaotuo) Commercial Execution is the Real Growth Driver: Following its May 2025 NMPA approval for primary hypertension and its subsequent December 2025 inclusion in the National Reimbursement Drug List (NRDL), S086 has become Salubris’s primary growth engine. Along with Enarodustat (Enaro), innovative formulation revenues grew 26.84% year-on-year in the first half of 2026, offsetting the commoditized legacy generic portfolio.
• The JK07 Phase II Clinical Disappointment Redraws the Valuation Curve: In May 2026, the interim data release for the RENEU-HF Phase II trial of JK07 (an NRG-1 fusion protein) revealed that the primary endpoint of Left Ventricular Ejection Fraction (LVEF) improvement at 26 weeks did not achieve statistical significance over placebo. While Salubris highlighted positive subjective KCCQ score improvements, the lack of robust structural efficacy significantly increases the regulatory risk and delays both the domestic and U.S. clinical pathways.
• HKEX Listing Resubmission Points to Urgent Liquidity Needs: On September 3, 2026, Salubris resubmitted its listing application to the Main Board of the HKEX, sponsored by Goldman Sachs, Citigroup, and CITIC Securities, after its initial February 2026 filing lapsed in August. The push for Hong Kong capital is driven by a desire to fund expensive global clinical trials and provide a dedicated offshore capital runway, amidst close scrutiny from the CSRC regarding overseas capital allocations.

• OpenAI maintains clear market leadership in frontier artificial intelligence, underpinned by unmatched brand equity, expanding enterprise monetization across its API and ChatGPT Enterprise tiers, and accelerating developer mindshare as Codex B2B adoption surges ~550% YoY.
• The company’s commercial trajectory is driven by multi-tiered monetization spanning consumer subscriptions, developer compute tokens, and deep distribution partnerships, generating exponential revenue expansion while requiring massive compute infrastructure investments.
• While developer migration to next-generation models such as GPT-5.6 demonstrates immense platform pull (+300.9% MoM in GitHub mentions), high compute capex, rapid legacy model obsolescence, and aggressive rivalry from Anthropic and open-source models remain primary operational headwinds.

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• Skepticism Over Dual Privatization-Spin-Off Structure: The market’s massive discount of the share price (HK$4.10 as of September 4, 2026) against the theoretical offer value of HK$10.16 reflects deep skepticism over the concurrent execution of Skyworth Group’s delisting and the listing of Skyworth Photovoltaic by introduction.
• CSRC Filing and Listing Hurdles: The listing by introduction for Skyworth Photovoltaic requires overseas listing registration under the CSRC’s framework. This regulatory hurdle, coupled with the lack of new capital raising during the listing, makes the transaction highly complex and increases the risk of deal termination.
• Brand Contamination from Skyworth Auto: While Skyworth Auto is privately owned by founder Huang Hongsheng’s Kewo New Energy Vehicle Group, the brand licensing agreement exposes the listed entity to immense reputational risk as the marginal EV maker faces severe financial strain and dealership closures in 2026.

• Initiation of A Container Port Terminal Product introduced our rationale for covering companies that exhibit monopolistic/oligopolistic characteristics, as evidenced by their historical pricing/volume growth. We began with four companies.
• Asian Terminals (ATI PM) has since been privatized, leaving our coverage universe at International Container Terminal Services (ICT PM), Port of Tauranga (POT NZ), and Westports Holdings (WPRTS MK) 
• Results for the companies have demonstrated structural margin improvements despite a challenging environment, indicating strong pricing power. 

• Innovent Biologics Inc (1801 HK) 1H26 revenue grew over 45% YoY, as oncology segment witnessed ramp up of newly NRDL-listed products and general biomedicine portfolio expanded.
• The global innovation pipeline is progressing smoothly. Three high-potential assets have entered global Phase 3 clinical trials, with a combined potential addressable market exceeding US$ 60B.
• Ongoing product launches and robust pipeline will support the growth momentum of the company. Innovent aims to achieve RMB 20B product revenue in 2027 (~ RMB 35-40B by 2030).