Smartkarma Daily Briefs

We analyzed the changes in short interest of TWSE Stocks as of Feb 28th which has an aggregated short interest worth USD21.7bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
We highlight short interest changes in Elite Material, Lotes, Chung-Hsin Electric & Machinery Mfg, Pharmaessentia, Global Unichip.

KRX Foreign Holding Weekly (Feb 28th): Kakao, Samsung Electronics, SK Hynix, Hyundai Motor

We analyzed the changes in foreign holdings of KRX stocks as of Feb 28th which has an aggregated holding worth USD482.2bn.
We estimate that foreign flows to be outflows of USD951mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight changes of foreign holdings in Kakao, Samsung Electronics, SK Hynix, Hyundai Motor.

Thailand Short Interest Weekly (Feb 28th): Airports of Thailand, CP Foods, PTT, Bangkok Bank

We analyzed the changes in short interest of Stock Exchange of Thailand as of Feb 28th.We estimate that they had an aggregated short interest worth USD2.0bn.
We tabulate league table for top short by value and short as multiple of ADT, as well as weekly increases & decreases in short value, short as multiple of ADT.
We highlight short interest changes in Airports of Thailand, CP Foods, PTT, Bangkok Bank, PTT GlobalChem.

TWSE Foreign Holding Weekly (Feb 28th): TSMC, Hon Hai Precision Industry, Quanta Computer

We analyzed the changes in foreign holdings of TWSE Stocks as of Feb 28th which has an aggregated holding worth USD993.9bn.
We estimate that foreign flows to be outflows of USD3,316mln. We tabulate the league table for top changes by value for 1W/4W/1Y and top stocks held by foreign institutions.
We highlight changes of foreign holdings in TSMC, Hon Hai Precision Industry, Quanta Computer, Accton Technology, Unimicron Technology.

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Mar 03

Daily Brief Event-Driven: A/H Premium Tracker (To 28 Feb 2025): AH Premia Continue to Fall; Expect Widening and more

By Smartkarma Daily Briefs | Daily Briefs, Event-Driven

In today’s briefing:

A/H Premium Tracker (To 28 Feb 2025): AH Premia Continue to Fall; Expect Widening
HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names
Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%
Merger Arb Mondays (03 Mar) – Seven & I, Makino, Aeon Delight, Tonami, Tam Jai, Vesync, Insignia
Pentamaster (1665 HK): Pricing WAS Fair As Offer Comfortably Gets Up
Aeon Mall (8905 JP): Aeon (8267 JP)’s Potential Share Exchange Offer
Weekly Update (MIDD, SNDK, RHLD, SNRE)
SSI Weekly Newsletter Highlights: SWTX and NATH Potential Buyouts, LQDA FDA Update and More
Strategic Reviews, Mergers, and Asset Sales: Analyzing Upside Potential in Active Portfolio Ideas

A/H Premium Tracker (To 28 Feb 2025): AH Premia Continue to Fall; Expect Widening

AH Premia continue to fall. Spread curve torsion reverses again with narrow premia trades seeing Hs perform the best.
Warning signs are starting to flash on spreads. This week I have the biggest week of changes recommended that I have ever had. By a long ways.
This week threatens to be a very strange week geopolitically. Being smaller in crowded trades is probably a good thing.

HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names

Gross SOUTHBOUND volumes cleared HK$800bn for the second week in a row. NET buying by SOUTHBOUND was HK$75bn which was perhaps a new record.
Notable again is the HUGE back-and-forth. If HK$865bn traded and SOUTHBOUND “only” bought HK$75bn, HK$395bn was round-tripped for short-term purposes.
Last week I flipped to short Alibaba Group Holding (9988 HK). Sentiment may worsen and there’s lots to sell later this week. Staying short Alibaba for now.

Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%

Sparx on Friday announced a Tender Offer at 0.55x book and an EV of less than inventory (<20% of revenue) for Snt Corp (6319 JP) – another metal monozukuri company.
Last year they did it on IJTT Co., Ltd. (7315 JP). That one got bumped. This one could too, but cross-holders own nearly 60%.
This kind of company has skill-sets which may be portable but the product line is tied to old Japan. The takeover

Merger Arb Mondays (03 Mar) – Seven & I, Makino, Aeon Delight, Tonami, Tam Jai, Vesync, Insignia

We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Tonami Holdings (9070 JP), Seven & I Holdings (3382 JP), Aeon Delight (9787 JP), Smart Share Global (EM US), Insignia Financial (IFL AU), Tam Jai International (2217 HK).
Lowest spreads: Millennium & Copthorne Hotels Nz (MCK NZ), Shibaura Electronics (6957 JP), Makino Milling Machine Co (6135 JP), Domain Holdings Australia (DHG AU), Proto Corp (4298 JP).

Pentamaster (1665 HK): Pricing WAS Fair As Offer Comfortably Gets Up

By David Blennerhassett

Pentamaster International (1665 HK)‘s Scheme overwhelmingly gets up after a wild week of trading.
After touching an intra-day low of HK$0.78/share on the 25th Feb – 28% adrift of the HK$1.00/share terms – shares closed at HK$0.97/share prior the results of the Scheme Meeting.
58.2% of disinterested shareholders opted to vote. Just 0.5% of those shareholders present voted against the Scheme; or just 0.29% of total disinterested shareholders. Not even close.

Aeon Mall (8905 JP): Aeon (8267 JP)’s Potential Share Exchange Offer

By Special Situation Investments

AEON Mall (8905 JP) and Aeon Co Ltd (8267 JP) announced a MoU for the potential privatisation of Aeon Mall through a share exchange offer.
The terms of the share exchange are expected to be announced in early April and be implemented in July.
Aeon’s 58.16% shareholding facilitates passing the Aeon Mall shareholder vote. My analysis suggests a potential share exchange (Aeon Mall/Aeon) ratio range of 0.60x-0.69x.

Weekly Update (MIDD, SNDK, RHLD, SNRE)

By Richard Howe

On Monday, Western Digital (WDC) spun off its NAND flash business, Sandisk (SNDK).
On Friday, CompoSecure (CMPO) spun off its management company, Resolute Holdings (RHLD).
During the week, we got earnings from Howard Hughes (HHH) and Sunrise Communications (SNRE).

SSI Weekly Newsletter Highlights: SWTX and NATH Potential Buyouts, LQDA FDA Update and More

SpringWorks Therapeutics (SWTX) is in late-stage acquisition talks with Merck KGaA, with a potential buyout offer at $85/share.
Liquidia (LQDA) had its FDA case denied, delaying Yutrepia’s market entry until May 2025, with commercialization on track.
ContextLogic (LOGC) received a $150m strategic investment from BC Partners, enhancing its cash balance and NOL monetization potential.

Strategic Reviews, Mergers, and Asset Sales: Analyzing Upside Potential in Active Portfolio Ideas

By Special Situation Investments

Sage Therapeutics rejected Biogen’s $7.22/share offer, initiating a strategic review for potential sale, indicating a possible higher premium.
SPAR Group’s merger with Highwire Capital faces uncertainty due to funding issues, with potential for significant stock price decline.
Kronos Bio’s strategic review follows clinical trial discontinuation, with potential sale or reverse merger, trading below net cash value.

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Mar 03

Daily Brief ECM: JX Advanced Metals IPO Preview and more

By Smartkarma Daily Briefs | Daily Briefs, ECM

In today’s briefing:

JX Advanced Metals IPO Preview
Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM
MIXUE IPO Trading – Strong Demand, Set to Break the Tea Chain Jinx
Chifeng Jilong A/H Listing: Why Not Own International Peers Instead?
ECM Weekly (3rd Mar 2025) – Japan Post Bank, JX Advance, Mixue, Chifeng, JSW Cement, Premier, Guzman

JX Advanced Metals IPO Preview

By Douglas Kim

JX Advanced Metals (5016 JP) is seeking to raise about ¥460 billion in the upcoming IPO on the Tokyo Stock Exchange. The indicative IPO price is ¥862 per share.
The final IPO pricing will be on 10 March. JX Advanced Metals will be listed on 19 March. Eneos is selling as many as 534.9 million shares in the IPO.
The company has a strong customer base. It is a key supplier to TSMC, Samsung, Intel, SK Hynix, and Micron for sputtering targets and high-purity metals.

Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM

By Research as a Service (RaaS)

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Mixue Group (2097 HK) andJX Advanced Metals (5016 JP) IPOs. Japan Post Bank (7182 JP) placement.
Event-Driven developments: Seven & I Holdings (3382 JP), Aeon Delight (9787 JP), Tonami Holdings (9070 JP), Sg Fleet (SGF AU).

MIXUE IPO Trading – Strong Demand, Set to Break the Tea Chain Jinx

By Sumeet Singh

Mixue Group (2097 HK) raised around US$450m in its Hong Kong IPO.
MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
We have covered various aspects of the deal in our previous notes. In this note, we will talk about the trading dynamics.

Chifeng Jilong A/H Listing: Why Not Own International Peers Instead?

By Nicholas Tan

Chifeng Jilong Gold Mining (600988 CH) , a gold mining company in China, is now looking to raise up to US$419m in its H-share listing in Hong Kong.
It operates six gold mines in Asia and Africa and has been listed on the Shenzhen Stock Exchange since 2004.
We have covered the company and deal background in our previous notes. In this note, we talk about the IPO pricing.

ECM Weekly (3rd Mar 2025) – Japan Post Bank, JX Advance, Mixue, Chifeng, JSW Cement, Premier, Guzman

By Sumeet Singh

Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, Mixue Group (2097 HK) looks set to break the tea chain jinx in its listing today, while JX Advanced Metals (5016 JP) will set its pricing.
On the placements front, Japan Post Holdings (6178 JP) was back with a US$4bn+ deal in Japan Post Bank (7182 JP).

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Mar 03

Daily Brief Thematic (Sector/Industry): Ohayo Japan | Equities Bounce Despite Failed Trump-Zelensky Negotiations and more

By Smartkarma Daily Briefs | Daily Briefs, Thematic (Sector/Industry)

In today’s briefing:

Ohayo Japan | Equities Bounce Despite Failed Trump-Zelensky Negotiations
“Buy the Worst” HSI Strategy: Initial Win Against HSI This Year
Why Going Global Is Crucial for China’s Petrochemical Producers
Japan Morning Connection: Japan Set to Rebound Led by Tech and Defence
Cards Flip: Ola’s Market Share Falls; India Electric Two-Wheeler Sales Trend – February 2025
[Blue Lotus Non-US Internet Weekly, 9/52]: DeepSeek (DS) New Research Paper Showed 85% Profit Margin
China Property Developers In Distress – Weekly News & Announcements Tracker | Feb 21- 27, 2025
[Blue Lotus China New Consumer Weekly, 9/52] New Home Sales Also Turned Positive YoY
CHMP Meeting Update: 4 New Medicines Recommended For Approval, Reinstates Previous Leqembi Decision

Ohayo Japan | Equities Bounce Despite Failed Trump-Zelensky Negotiations

By Mark Chadwick

U.S. stocks bounced back after brief declines triggered by failed Trump-Zelensky negotiations. The S&P closed up 1.6%
Aeon will acquire the remaining shares of its listed subsidiaries Aeon Mall and Aeon Delight, addressing investor concerns about parent-subsidiary listings
Recruit Holdings will buy back up to ¥450bn of its shares; Daiichi Sankyo will buy back up to ¥50bn of its shares, or 0.9% of total issued shares

“Buy the Worst” HSI Strategy: Initial Win Against HSI This Year

By Osbert Tang, CFA

Our “Buy the Worst” strategy has outperformed the HSI by 1.7pp in the first two months. Meanwhile, the basket of best-performing constituents have underperformed 1.9pp.
More news on stimulating consumptions should be positive to Budweiser Brewing APAC (1876 HK), Chow Tai Fook Jewellery (1929 HK), and even Hang Lung Properties (101 HK).
Trip.com Group (9961 HK) has been weighed down by weaker profitability on higher costs. Earnings risks may negatively affect Meituan (3690 HK) and China Hongqiao (1378 HK).

Why Going Global Is Crucial for China’s Petrochemical Producers

By Caixin Global

China’s petrochemical companies should speed up their overseas expansions, with a focus on building up capacity to withstand fierce domestic competition and rising trade barriers, an industry group leader said.
“Internationalization has become a strategic choice for China’s petrochemical industry as it confronts global trade tensions and supply chain restructuring,” Fu Xiangsheng, vice chairman of the China Petroleum and Chemical Industry Federation, said at a press conference last week.
Fu explained that escalating geopolitical tensions, coupled with major powers’ efforts to “decouple” from China are threatening global supply chain security.

Japan Morning Connection: Japan Set to Rebound Led by Tech and Defence

By Andrew Jackson

US broke the Tech rout on Friday while the Trump/Zelensky spat points to higher EU defense spending.
ON Semi is reported to be making a play for Allegro signalling a potential liquidity event for Sanken.
JP SPE was heavily sold on Fri so expect a sharp rebound to start.

Cards Flip: Ola’s Market Share Falls; India Electric Two-Wheeler Sales Trend – February 2025

By Sreemant Dudhoria

India’s E-2W market witnessed a major shakeup in Feb-2025.Ola Electric (OLAELEC IN)‘s sales nosedived,causing the company to fall from the No. 1 position in January to No. 4 in February.
Bajaj Auto Ltd (BJAUT IN) led the market with 21,335 units, followed by TVS Motor (TVSL IN) at 18,743 units and Ather Energy (1207922D IN) at 11,788 units.
Market continues to be highly competitive,with top three players vying for leadership. Increasing consumer adoption,new product launches, and potential IPOs from key companies indicate dynamic year ahead for E-2W industry.

[Blue Lotus Non-US Internet Weekly, 9/52]: DeepSeek (DS) New Research Paper Showed 85% Profit Margin

By Ying Pan

DeepSeek’s (DS) own traffic declined as rivals launching white-label DS service but DS published research paper showing unmatched profit margin of 85%;
JD’s take out initiative update: We think JD is serious but its effort will be in vain. We think JD.com knows it too.
Shopee and Lazada colluded to raise commission in SE Asia, benefiting both with no loss of market share.

China Property Developers In Distress – Weekly News & Announcements Tracker | Feb 21- 27, 2025

By Robert Ciemniak

This note is a weekly (select weeks on SK) curated selection of Chinese news articles and company announcements focused on developers in distress
We look for their deals, updates, specific project progress news (‘local signals’), as well as relevant local research commentaries about the market
We do not verify the underlying data or provide any opinion, we only select and summarize the information; See direct links to the sources

[Blue Lotus China New Consumer Weekly, 9/52] New Home Sales Also Turned Positive YoY

By Eric Wen

Following existing home last week, new home sales also posted positive YoY growth.
LI is getting ready for its major battle of the year with BEV launch. It is focused, but we doubt it is enough;
MNSO guided down its C4Q24 and we believe it will miss 2025 as well. Offline grocery is under constant assault by O2O and online e-commerce.

CHMP Meeting Update: 4 New Medicines Recommended For Approval, Reinstates Previous Leqembi Decision

By Tina Banerjee

EMA’s human medicines committee (CHMP) recommended three new medicines for approval and adopted positive opinion for one generic medicine at its February 2025 meeting.
The committee recommended extending the therapeutic indications of 16 existing medicines, including two cystic fibrosis medicines, KAFTRIO and KALYDECO and oncology drugs CALQUENCE, DARZALEX, ENHERTU, and RINVOQ .
The CHMP concluded that its opinion recommending a marketing authorization for Eisai’s Alzheimer’s disease drug Leqembi does not need to be updated.

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Mar 03

Daily Brief Equity Bottom-Up: BeiGene (6160.HK/ONC US) 2024 Results – The Performance Is Outstanding and more

By Smartkarma Daily Briefs | Daily Briefs, Equity Bottom-Up

In today’s briefing:

BeiGene (6160.HK/ONC US) 2024 Results – The Performance Is Outstanding
Airtasker Ltd – Media deals drive positive revenue trends
Plover Bay (1523 HK): Brilliant FY24 Results/Growth To Continue
Best Idea of 2025: Medexus Pharmaceuticals
Raccoon Holdings, Inc. (3031 JP): Q3 FY04/25 flash update

BeiGene (6160.HK/ONC US) 2024 Results – The Performance Is Outstanding

By Xinyao (Criss) Wang

BeiGene’s 2024 results beat expectations, mainly driven by strong sales growth of BRUKINSA. In 2025, BRUKINSA’s sales would exceed Calquence for the first time.But sales performance of tislelizumab remains lackluster.
Based on positive trend, turning losses into profits is just a matter of time. BeiGene is expected to achieve positive GAAP operating income in 2025, which is an inflection point.
US$24.5-26.5 billion is the valuation bottom line, below which BeiGene is undervalued. Our forecast is that market value would reach US$37.5 billion. So, there is still upside potential in valuation.

Airtasker Ltd – Media deals drive positive revenue trends

Airtasker Limited (ASX:ART) is an online marketplace for local services, connecting people and businesses who need work done with people who want to work.
ART’s reported H1 FY25 results are messy, with a number of non-cash items including media capital spend distorting reported numbers.
On an adjusted basis revenue growth was 11%, with Airtasker marketplace growth closer to 15%.

Plover Bay (1523 HK): Brilliant FY24 Results/Growth To Continue

Plover Bay Technologies (1523 HK) reported FY24 revenues/profits up 23.9%/35.4% YoY. H2 FY24 revenue/profit growth was steady at 20%/20% YoY.
On the conference call, the company did not provide explicit guidance for FY25 but mentioned that growth has been healthy for the six weeks of FY25 and will continue.
Trading at 19x/16.4x FY24/25e (assuming 20% growth and flat margins), with a dividend yield of 5.8% and 10% of the market cap in net cash, the stock is worth exploring.

Best Idea of 2025: Medexus Pharmaceuticals

By Richard Howe

Medexus (MDP.TO / MEDXF) is my best idea for 2025. The stock trades at a distressed valuation despite the current launch of a new drug that could double revenue and triple EBITDA within 3 years.
I see 100% upside in 2025, but there is the potential for 400% to 500% upside over a three year period.
Downside is limited as Medexus has minimal debt (net debt to EBITDA of 0.7x) and a stable base business.

Raccoon Holdings, Inc. (3031 JP): Q3 FY04/25 flash update

By Shared Research

Revenue increased by 6.0% YoY to JPY4.6bn, with operating profit up 104.7% YoY to JPY952mn.
EC business revenue rose 7.1% YoY to JPY2.6bn, with segment profit increasing 47.4% YoY to JPY915mn.
Financial business revenue grew 4.6% YoY to JPY1.9bn, with segment profit up 59.5% YoY to JPY572mn.

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Mar 03

Daily Brief Credit: Weekly News & Views – Feb 28 and more

By Smartkarma Daily Briefs | Credit, Daily Briefs

In today’s briefing:

Weekly News & Views – Feb 28, 2025

Weekly News & Views – Feb 28, 2025

By Leandro Gubler

Vista Energy – Mercado Libre – Telecom Argentina – Suzano – Cemex
The LatAm Aggregate Index expanded by 14 bps to 331 bps in the week ending Friday, February 28, 2025.
U.S. Treasuries saw significant declines. The 10-year yield fell 22 bps to 4.21%, while the 5-year yield declined 25 bps to 4.02%.

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Mar 03

Daily Brief Macro: HONG KONG ALPHA PORTFOLIO (February 2025) and more

By Smartkarma Daily Briefs | Daily Briefs, Macro

In today’s briefing:

HONG KONG ALPHA PORTFOLIO (February 2025)
Bessent Gets His Wish, But Not In A Good Way
What Should You Buy As the Magnificent Seven Falters?
Copper Tracker 3rd March 2025: China TSF And PMI Rebound A Major Boost, All Eyes On the NPC
Glacial Bank of Japan Policy Normalisation Intact, but Wage Inflation and Geopolitics Pose Risks
Iron Ore Tracker (04-Mar-2025): PMI Rebound And China TSF Looking Good, All Eyes On NPC

HONG KONG ALPHA PORTFOLIO (February 2025)

By David Mudd

HK Alpha Portfolio returned 13.58% in February and outperformed the benchmark by 7.68%. The portfolio has outperformed Hong Kong indexes by 5.16% to 11.48% since its inception on 10/01/24.
About 50% of the portfolio’s excess returns have been from alpha generation. The portfolio had no exposure to Real Estate, Energy, or Utilities.
At month-end we sold AAC Technologies Holdings (2018 HK) , Trip.com Group (9961 HK) , MINISO Group Holding (9896 HK) , and trimmed Xiaomi Corp (1810 HK) .

Bessent Gets His Wish, But Not In A Good Way

By Cam Hui

Treasury Secretary Scott Bessent recently declared that the Trump Administration was mainly focused on lower the 10-year Treasury yield. He seems to be accomplishing his goals, but at a price.
The U.S. economy is increasingly dependent on the high-end consumer, whose wealth is reliant on continuing increases in stock and property prices. But cracks are appearing in both markets.
We expect a reset in growth expectations will lead to a short and sharp correction, but no prolonged recession-induced bear market.

What Should You Buy As the Magnificent Seven Falters?

By Cam Hui

A global rotation analysis reveals a rotation away from U.S. equities. Europe is poised to sustain leadership, and our favourite sector is European financials.
China has shown signs of relative strength, but doesn’t appear to be sustainable.
The most vulnerable countries appear to be the resource exporters such as Australia, Canada, Brazil, Indonesia and South Africa.

Copper Tracker 3rd March 2025: China TSF And PMI Rebound A Major Boost, All Eyes On the NPC

Copper prices remained tepid last week, owing to a weak global market sentiment with Trump’s tariffs. Funds cut their bullish Comex positions as premiums crashed by 40% from the peak.
China’s Manufacturing PMI rose to 50.2 in February, surpassing the expected 49.9, while the record Total Social Financing in January also contributed significantly to this positive outlook.
The NPC 2025, taking place on March 5, will be closely watched for China’s fiscal policy roadmap, which is expected to influence commodity consumption.

Glacial Bank of Japan Policy Normalisation Intact, but Wage Inflation and Geopolitics Pose Risks

By Said Desaque

The Bank of Japan (BoJ) has embraced the Fed’s practice of gradualism in normalising policy settings. Private securities holdings make it difficult for the BoJ’s balance sheet to fall rapidly.
The BoJ’s inflation gauge has been rising again since July 2024, suggesting gradually tighter policy will not reintroduce deflation. Rising wages are the inflation game changer after years of stagnation.
Monetary policy settings in Japan will remain accommodative in 2025, albeit less so. The attraction of the yen carry trade could fall, but the demand for dollars will remain elevated.

Iron Ore Tracker (04-Mar-2025): PMI Rebound And China TSF Looking Good, All Eyes On NPC

The Trump administration’s announcement of a 60% tariff on Chinese steel imports affected the market sentiment, leading to a 3% decline in iron ore prices last week.
China’s Manufacturing PMI rose to 50.2 in February, surpassing the expected 49.9, while the record Total Social Financing in January also contributed significantly to this positive outlook.
Iron ore prices can remain rangebound (95-110 USD/ton), with the positive demand-side catalysts from China outweighing the long-term supply fears from Rio’s Simandou project.

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Mar 03

Daily Brief China: Xiamen Amoytop Biotech Co Ltd, Weichai Power Co Ltd H, Alibaba Group Holding , JD.com , Chifeng Jilong Gold Mining, Hang Seng China Enterprises Index, Mixue Group, Hang Seng Index, BeiGene and more

By Smartkarma Daily Briefs | China, Daily Briefs

In today’s briefing:

STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises
A/H Premium Tracker (To 28 Feb 2025): AH Premia Continue to Fall; Expect Widening
HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names
Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong’s Options Market
Chifeng Jilong Gold Mining (6693 HK) IPO: H-Share Offering Details & Index Inclusion
HSCEI Index Options Weekly (Feb 24-28): Shifting Sentiment
MIXUE IPO Trading – Strong Demand, Set to Break the Tea Chain Jinx
Hong Kong Single Stock Options Weekly (Feb 24 – 28): Broad Deterioration
BeiGene (6160.HK/ONC US) 2024 Results – The Performance Is Outstanding
Chifeng Jilong A/H Listing: Why Not Own International Peers Instead?

STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises

There are 3 constituent changes for the STAR50 INDEX and 6 changes for the STAR100 Index at the March rebalance that will be implemented at the close on 14 March.
The last-minute methodology change could lead to under/over positioning on some names and those stocks could move the most over the next few days.
Performance has been mixed in the changes to the STAR50 INDEX but the outright adds have continued to outperform the outright deletes for the STAR100 Index.

A/H Premium Tracker (To 28 Feb 2025): AH Premia Continue to Fall; Expect Widening

AH Premia continue to fall. Spread curve torsion reverses again with narrow premia trades seeing Hs perform the best.
Warning signs are starting to flash on spreads. This week I have the biggest week of changes recommended that I have ever had. By a long ways.
This week threatens to be a very strange week geopolitically. Being smaller in crowded trades is probably a good thing.

HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names

Gross SOUTHBOUND volumes cleared HK$800bn for the second week in a row. NET buying by SOUTHBOUND was HK$75bn which was perhaps a new record.
Notable again is the HUGE back-and-forth. If HK$865bn traded and SOUTHBOUND “only” bought HK$75bn, HK$395bn was round-tripped for short-term purposes.
Last week I flipped to short Alibaba Group Holding (9988 HK). Sentiment may worsen and there’s lots to sell later this week. Staying short Alibaba for now.

Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong’s Options Market

By Gaudenz Schneider

Box trades are gaining popularity on the Hong Kong Stock Exchange. These arbitrage strategies exploit price discrepancies in options markets for near risk-free profits.
Long box trades involve simultaneously buying bull call spreads and bear put spreads with identical strikes and expiration dates, creating a fixed payoff regardless of the underlying asset’s price movement.
Box trades require careful execution consideration of spreads, commissions, margins, and fees, with risks primarily in execution and operations rather than market exposure.

Chifeng Jilong Gold Mining (6693 HK) IPO: H-Share Offering Details & Index Inclusion

Chifeng Jilong Gold Mining (600988 CH) has launched an H-share offering that could raise up to US$554m if the offer size adjustment option and overallocation option are both exercised.
The price range of HK$13.72-HK$15.83/share is a discount of 18.7-29.5% to the A-shares and between 17-26% of the offering will be allocated to cornerstone investors.
The small issue size will result in the stock staying out the global indices for the foreseeable future. Inclusion in Southbound Stock Connect will take place in April.

HSCEI Index Options Weekly (Feb 24-28): Shifting Sentiment

By John Ley

Put trading as a percentage of total volume continues to increase and coupled with a shift in the skew highlights changing sentiment.
Volatile price action this week with Wednesday and Friday both moving ~3.50%.
Implied and historic volatilities were all up on the week and seasonal setup over next two weeks not favorble.

MIXUE IPO Trading – Strong Demand, Set to Break the Tea Chain Jinx

By Sumeet Singh

Mixue Group (2097 HK) raised around US$450m in its Hong Kong IPO.
MIXUE Group (MIXUE) is a freshly-made drinks company providing affordable products to consumers, including freshly-made fruit drinks, tea, ice cream and coffee, typically priced at around one USD per item.
We have covered various aspects of the deal in our previous notes. In this note, we will talk about the trading dynamics.

Hong Kong Single Stock Options Weekly (Feb 24 – 28): Broad Deterioration

By John Ley

Broad based weakness, less than ½ of optionable stocks were up on the week with the average size of losses larger than average size of gains.
Total single stock Put option volume the highest in the past 4 months pushing the Put/Call ratio to a local extreme.
Laggards from the rally holding on, rally leaders broadly weak.

BeiGene (6160.HK/ONC US) 2024 Results – The Performance Is Outstanding

By Xinyao (Criss) Wang

BeiGene’s 2024 results beat expectations, mainly driven by strong sales growth of BRUKINSA. In 2025, BRUKINSA’s sales would exceed Calquence for the first time.But sales performance of tislelizumab remains lackluster.
Based on positive trend, turning losses into profits is just a matter of time. BeiGene is expected to achieve positive GAAP operating income in 2025, which is an inflection point.
US$24.5-26.5 billion is the valuation bottom line, below which BeiGene is undervalued. Our forecast is that market value would reach US$37.5 billion. So, there is still upside potential in valuation.

Chifeng Jilong A/H Listing: Why Not Own International Peers Instead?

By Nicholas Tan

Chifeng Jilong Gold Mining (600988 CH) , a gold mining company in China, is now looking to raise up to US$419m in its H-share listing in Hong Kong.
It operates six gold mines in Asia and Africa and has been listed on the Shenzhen Stock Exchange since 2004.
We have covered the company and deal background in our previous notes. In this note, we talk about the IPO pricing.

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Mar 03

Most Read: Xiamen Amoytop Biotech Co Ltd, AEON Mall, Shenzhen Bluetrum Technology, Weichai Power Co Ltd H, JX Advanced Metals, Aeon Delight, Alibaba Group Holding , Snt Corp, JD.com , Japan Post Holdings and more

By Smartkarma Daily Briefs | Daily Briefs, Most Read

In today’s briefing:

STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises
Aeon (8267) And Aeon Mall (8905) To Be a Guess The Ratio Trade
STAR Chip Index Rebalance: Shenzhen Bluetrum (688332) Replaces JoulWatt (688141)
A/H Premium Tracker (To 28 Feb 2025): AH Premia Continue to Fall; Expect Widening
JX Advanced Metals IPO Preview
Aeon Tender Offer for Aeon Delight (9787) At ¥5,400/Share
HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names
Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%
Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong’s Options Market
Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM

STAR50/STAR100 Index Rebalance: Methodology Changes & Some Surprises

There are 3 constituent changes for the STAR50 INDEX and 6 changes for the STAR100 Index at the March rebalance that will be implemented at the close on 14 March.
The last-minute methodology change could lead to under/over positioning on some names and those stocks could move the most over the next few days.
Performance has been mixed in the changes to the STAR50 INDEX but the outright adds have continued to outperform the outright deletes for the STAR100 Index.

Aeon (8267) And Aeon Mall (8905) To Be a Guess The Ratio Trade

On 28-Feb-25, the last day of their fiscal year, Aeon Co Ltd (8267 JP) signed a deal to acquire Aeon Delight via Tender Offer and Aeon Mall via scrip exchange.
For Aeon Mall, that means negotiation on the share exchange ratio over the next 5-6 weeks.
While I have an opinion on the fair ratio (explained below), I find “Guess The Ratio” trades fraught with bad governance outcomes. The 3-month average is often used.

STAR Chip Index Rebalance: Shenzhen Bluetrum (688332) Replaces JoulWatt (688141)

CSI announced the changes for the March rebalance after market close on 28 February and the changes will be effective after the close of trading on 14 March.
As expected, Shenzhen Bluetrum Technology (688332 CH) will be added to the index while JoulWatt Technology Co (688141 CH) will be deleted.
Shenzhen Bluetrum Technology (688332 CH) outperformed JoulWatt Technology Co (688141 CH) in the last quarter of 2024 and there has been a reversal of fortunes this calendar year.

A/H Premium Tracker (To 28 Feb 2025): AH Premia Continue to Fall; Expect Widening

AH Premia continue to fall. Spread curve torsion reverses again with narrow premia trades seeing Hs perform the best.
Warning signs are starting to flash on spreads. This week I have the biggest week of changes recommended that I have ever had. By a long ways.
This week threatens to be a very strange week geopolitically. Being smaller in crowded trades is probably a good thing.

JX Advanced Metals IPO Preview

By Douglas Kim

JX Advanced Metals (5016 JP) is seeking to raise about ¥460 billion in the upcoming IPO on the Tokyo Stock Exchange. The indicative IPO price is ¥862 per share.
The final IPO pricing will be on 10 March. JX Advanced Metals will be listed on 19 March. Eneos is selling as many as 534.9 million shares in the IPO.
The company has a strong customer base. It is a key supplier to TSMC, Samsung, Intel, SK Hynix, and Micron for sputtering targets and high-purity metals.

Aeon Tender Offer for Aeon Delight (9787) At ¥5,400/Share

Bowing before bureaucratic, governmental, societal, and perhaps finally shareholder pressure, Aeon Co Ltd (8267 JP) Friday announced it is rolling up two big subsidiaries.
Aeon Mall will be merged with Aeon in a share exchange and Aeon Delight (9787 JP) will be taken over via slightly long-dated Tender Offer which starts Monday.
This is probably the wrong price, but it isn’t egregiously wrong I expect. And it would be difficult to block. I expect it gets done easily.

HK Connect SOUTHBOUND Flows (To 28 Feb 2025); Big Volumes, HUGE Net Buys on Blue Chips, Tech-Y Names

Gross SOUTHBOUND volumes cleared HK$800bn for the second week in a row. NET buying by SOUTHBOUND was HK$75bn which was perhaps a new record.
Notable again is the HUGE back-and-forth. If HK$865bn traded and SOUTHBOUND “only” bought HK$75bn, HK$395bn was round-tripped for short-term purposes.
Last week I flipped to short Alibaba Group Holding (9988 HK). Sentiment may worsen and there’s lots to sell later this week. Staying short Alibaba for now.

Sparx Launches Another Offensively Underpriced Takeover at a Fat Premium – SNT (6319) +94%

Sparx on Friday announced a Tender Offer at 0.55x book and an EV of less than inventory (<20% of revenue) for Snt Corp (6319 JP) – another metal monozukuri company.
Last year they did it on IJTT Co., Ltd. (7315 JP). That one got bumped. This one could too, but cross-holders own nearly 60%.
This kind of company has skill-sets which may be portable but the product line is tied to old Japan. The takeover

Box Trades Explained: How Traders Execute Near Risk-Free Arbitrage in Hong Kong’s Options Market

By Gaudenz Schneider

Box trades are gaining popularity on the Hong Kong Stock Exchange. These arbitrage strategies exploit price discrepancies in options markets for near risk-free profits.
Long box trades involve simultaneously buying bull call spreads and bear put spreads with identical strikes and expiration dates, creating a fixed payoff regardless of the underlying asset’s price movement.
Box trades require careful execution consideration of spreads, commissions, margins, and fees, with risks primarily in execution and operations rather than market exposure.

Weekly Deals Digest (02 Mar) – Japan Post Bank, 7&I, Aeon Delight, Tonami, Mixue, JXAM

By Research as a Service (RaaS)

A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
ECM developments: Mixue Group (2097 HK) andJX Advanced Metals (5016 JP) IPOs. Japan Post Bank (7182 JP) placement.
Event-Driven developments: Seven & I Holdings (3382 JP), Aeon Delight (9787 JP), Tonami Holdings (9070 JP), Sg Fleet (SGF AU).

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✓ Company Analytics and News
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Mar 03

Daily Brief Australia: Airtasker, Iron Ore and more

By Smartkarma Daily Briefs | Australia, Daily Briefs

In today’s briefing:

Airtasker Ltd – Media deals drive positive revenue trends
Iron Ore Tracker (04-Mar-2025): PMI Rebound And China TSF Looking Good, All Eyes On NPC

Airtasker Ltd – Media deals drive positive revenue trends

Airtasker Limited (ASX:ART) is an online marketplace for local services, connecting people and businesses who need work done with people who want to work.
ART’s reported H1 FY25 results are messy, with a number of non-cash items including media capital spend distorting reported numbers.
On an adjusted basis revenue growth was 11%, with Airtasker marketplace growth closer to 15%.

Iron Ore Tracker (04-Mar-2025): PMI Rebound And China TSF Looking Good, All Eyes On NPC