Daily Brief China: Tencent, MiniMax, Shenzhen Kinwong Electronic, RoboTechnik IntelligentTechnology, ASR Microelectronics, Zhejiang Taotao Vehicles, Hunan Yuneng New Energy Battery Material, Swire Properties, China Oilfield Services, Ligent Technologies and more

• Tencent (700 HK) has been active since the start of the year in selling down some of its stake in its investee companies to raise over US$3.3bn cash.
• Tencent did report a negative free cash flow quarter in 2Q26. Given the elevated spending, it might look to sell some more of its stakes.
• Tencent owned over US$66bn worth of shares in over 39 companies, with the bulk of it stemming from US, US-HK listed and overseas listed companies.

• The US outspent China 23-to-1 on private AI investment in 2025, yet the model performance gap collapsed from ~31 percentage points to 2.7% in under three years.
• Beijing is not chasing AGI. It is deploying AI as industrial infrastructure — robots, healthcare, manufacturing — backed by state capital, open-source models, and a 2030 deadline.
• A dozen Chinese AI pure-plays now trade publicly, mostly in Hong Kong, with more IPOs in the pipeline. Valuations are steep but structural tailwinds are durable.

• Shenzhen Kinwong Electronic (3228 HK) is a global printed circuit board (PCB) manufacturer, seeking to raise up to US$653 million at a maximum offer price of HK$69.88 per share.
• It makes rigid PCBs (RPCBs), flexible printed circuits (FPCs), and other PCBs for automotive electronics, smart devices, industrial control, telecommunications, and data infrastructure customers.
• The investment case is bearish: Kinwong is a price-taker in a fragmented, capital-intensive industry, with squeezed core margins, profits propped up by copper-scrap sales and heavy capex-driven cash burn.

• RoboTechnik is a global provider of manufacturing equipment and systems for the PV and SiPh industries, ranking first in intelligent SiPh equipment by revenue in 2025.
• RoboTechnik ranked first globally in intelligent SiPh manufacturing equipment by revenue in 2025 with a 20.5% market share.
• Net cash generated from operating activities was RMB232,602 for 6M2026, with cash and cash equivalents at RMB463,646 as of June 30, 2026.

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• ASR Microelectronics, a fabless designer of cellular connectivity chips and AI SoCs, is seeking an A+H listing. MS and Haitong are the joint sponsors.
• We look at the company’s three segments: wireless connectivity chips, smart device SoCs and custom ASIC solutions.
• We discuss our preliminary thoughts on the company’s valuation based on the A-H premium.

• Zhejiang Taotao Vehicles (ZTTV HK) , provider of outdoor leisure and electrified mobility solutions, aims to raise around US$250m in its H-share listing.
• Zhejiang Taotao Vehicles (ZTV) is a global provider of outdoor leisure and electrified mobility solutions.
• In this note, we talk about the company’s past performance.

• Hunan Yuneng New Energy Battery Material (301358 CH) (HYNEB), a new energy materials company, aims to raise around US$600m in its H-share listing.
• HYNEB focuses on the research and development, manufacturing and sales of phosphate-based cathode materials, primarily lithium iron phosphate (LFP) cathode materials.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• Aspirational Luxury Wipeout: A macroeconomic squeeze has erased 50m middle-class luxury consumers, devastating mainland turnover rents as megabrands like Gucci and LVMH report plunging sales.
• Hong Kong Office Contagion: Swire faces a brutal second front, with Grade A office vacancies hitting 17.5% and flagship portfolios suffering negative rental reversions up to 16% amid financial exoduses.
• Dividend Under Threat: With 7.7 bn HKD in fair value losses and sliding recurring profits, reliance on capital recycling masks underlying decay, threatening dividend growth and valuation.

• A capital cycle story with minimal supply coming online but booming demand in the pipeline
• Consolidation in the industry leading to better pricing not more supply
• COSL’s recent results show a marked improvement in the international business masked by FX translation losses

• Ligent priced at 14.5x FY27E and trades at 15.7x, below Innolight and Eoptolink on every multiple, for a third of their revenue growth and half their gross margin.
• The H-share ladder is Cambridge 12x, Ligent 16x, Innolight 20x. Hong Kong ranks quality and will not pay a leader multiple for a 24% gross margin and negative cash flow.
• We are BEARISH and think share price will be under pressure. You can start Buying below HK$27, the Cambridge-H 12x floor; sell above HK$39, the leaders’ 17.5x.