China

• Hang Seng Bank (11 HK)’s IFA considers HSBC Holdings (5 HK)’s scheme privatisation offer of HK$155 per share to be fair and reasonable. 
• The key condition is scheme approval by at least 75% disinterested shareholders (<10% disinterested shareholders’ rejection). The scheme vote remains low risk.
• The offer is attractive compared to peer multiples and privatisation precedents. This is done. At the current price and for a 4 February payment, the gross/annualised spread is 1.0%/7.1%.

• BYD (1211 HK) has been downtrending for a while, a speculative LONG positioning starts to become attractive for some, but according to our model the short-term upside is limited.
• The stock is pulling back this week, second consecutive week down, this insight will try to identify price zones where to buy the stock and where to exit / hedge.
• BYD could be held past our suggested profit target at 101.8 (in case the next bear rally it’s not just a bear-rally), but time-wise it’s a 2 weeks rally, tops.

• B&K, a China-based clinical stage biotech company, launched its IPO to raise at USD 774 million via a Hong Kong listing.
• In this note, we look at its fundamentals briefly, including its core products and its management team.
• We deem the fundamentals of the deal weak and will avoid the deal.

• Baidu’s financial performance for the third quarter of 2025 highlights both strengths and challenges.
• The company reported total revenues of RMB 31.2 billion, which represents a 7% decline year-over-year.
• Baidu Core, a significant segment, showed revenue at RMB 24.7 billion, aligning with this downward trend.

• CSPC Innovation Pharmaceutical-A (300765 CH) has applied for H share listing on the Hong Kong Stock Exchange, with CITIC Securities being the sole sponsor to the issue.
• The company intends to raise fund for financing biopharmaceuticals R&D, acquisitions of companies or drug assets to expand product portfolio, and commercialization of approved products and late-stage product candidates.
• CSPC Innovation shares have been listed in China since 2019. After strong run-up from September 2023 to June 2025 (shares jumped 5x), shares fell 43% over the last six months.

• Tencent Music Entertainment Group reported strong third-quarter results in 2025, driven by significant growth in its online music business.
• Total revenues grew by 21% year-over-year to RMB 8.5 billion, with online music revenues increasing by over 27% to RMB 7 billion.
• The growth in music subscription revenues was notable, with a 70% year-on-year increase to RMB 4.5 billion, propelled by a steady rise in paying users and enhancements in ARPPU, which reached RMB 11.9 compared to RMB 10.8 from the previous year.

• PDD Holdings Inc. has presented a performance in the third quarter of 2025 that reflects the challenges and opportunities in the evolving e-commerce landscape.
• The company reported revenues of RMB 108.3 billion, marking a 9% year-over-year increase, fueled by growth in online marketing services and transaction revenues.
• However, growth remains pressured amidst an intensely competitive environment in the e-commerce sector.

• Although Insilico’s development direction is AI-Biotech, its “genes” don’t support the continuous promotion of drug R&D into later clinical stages. It’s more realistic to sell early-stage candidates and collect cash.
• Relying solely on AI pharmaceuticals cannot quickly enter the commercialization stage of innovative drugs. In fact, capital has seen the truth and pharmaceutical companies also doubt its real value.
• Insilico in on the right path in terms of business model.If InSilico has the opportunity to develop blockbuster drugs, its future valuation can easily lead QuantumPharm by a large margin.

• JD.com’s third-quarter 2025 earnings indicate a blend of moderate growth and inherent challenges.
• The company reported a 15% year-on-year increase in total revenues, maintaining a double-digit growth pattern.
• This uptick was driven by gains in general merchandise and marketplace and marketing revenues.

• TI Cloud is a leading cloud-native customer contact solutions provider in China, demonstrating a significant financial turnaround with strong revenue growth and a return to profitability in the latest fiscal year.
• The company is well-positioned to capitalize on the rapid growth of China’s cloud computing market, which is driven by nationwide digital transformation initiatives and increasing AI adoption.
• Valuation appears attractive relative to peers, especially considering its high growth and strong Smartkarma Smartscores across Value, Dividend, Growth, and Momentum. However, the stock has shown high volatility.

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• There are 5 additions for the VanEck Gold Miners ETF/USA (GDX US) in December. Zijin Gold (2259 HK) is a surprise add (as are some of the others).
• Estimated one-way turnover is 15.2% and that leads to a round-trip trade of US$8.8bn. There are many stocks with multiple days of ADV to trade from passive trackers.
• The MarketVector Global Gold Miners Index has just passed its earlier highs, but a lot of the adds have broken out and are trading much higher than their prior highs.

• Peak IP momentum risk: Labubu (~23% of revenue) shows fading hype, with resale prices and ex-China search interest normalizing, raising risk of faster-than-expected growth deceleration in 2026.
• IP concentration and gap: No other IP has demonstrated Labubu-like scaling, increasing risk of an IP digestion period. Overseas expansion matures and supply normalization caps incremental demand.
• Valuation/Expectations mismatch: At 14x 2026E P/E, valuation assumes durable IP growth; TP at HKD 100 to 105 with downgrade risk in 2H26.

• Back on the 9th October, Hang Seng Bank (11 HK) announced an Offer from controlling parent, HSBC Holdings (5 HK), by way of a Scheme.
• HSBC offered HK$155/share, a 30.3% premium to last close. The price was final. A third interim dividend was bolted on. Optically – and fundamentally – the price was bang on.
• The Scheme Doc is now out, with the Court Meeting on the 8th January 2026.  Payment around 4th Feb. The IFA, in a bare-bones report, concluded “fair & reasonable”. 

• Hs within the liquid AH pair universe UNDER-performed As on average by 0.78% on A-share index rebal week. Beautiful Skew behaved better. H Utilities were bought.
• Quiddity H/A Portfolio performance slightly positive (+23bp). Stay the Beautiful Skew course.
• The data tables below update on a daily basis in the Tools section of Smartkarma. The Southbound Flow Monitor and AH Pairs Monitor are both there – free for all SK readers.

• HK$77bn/Day of gross SOUTHBOUND activity last week vs HK$88bn the week before, HK$100+bn the week before. Gross flows are winding down.
• Watch for news on the Dual Counter (RMB) Trading eligibility for SOUTHBOUND near-term. That could re-up the pace. The SFC expected it “soon” in July. Later, by year-end.
• The data tables below update on a daily basis in the Tools section of Smartkarma. The Southbound Flow Monitor and AH Pairs Monitor are both there – free – for all SK readers.

• BenQ BM launched its Hongkong IPO aiming to raise up to HK$783M. The company plans to sell 67M shares at a price band of HK$ 9.34-HK$ 11.68 per share.
• Proceeds to be used for expansion and upgradation of existing hospitals, for mergers and acquisitions opportunities and for general corporate purposes and working capital needs.
• Amid sluggish sales and margin pressure, we think that the BenQ BM issue is overvalued and investors can comfortably avoid subscribing to the offer.

• Many companies enter the goat/sheep milk powder market due to higher gross margin than cow milk powder, but after years of development, this market has been in a shrinking trend.
• With a closed-loop capability in full internal control, production and supply of core ingredients of demineralized goat and sheep whey, Yeeper has supply chain advantage, thus with higher pricing power.
• Yeeper’ has shown the characteristics of “slowing revenue growth, and increasing pressure on net profit margin” due to intensified competition. Valuation could be lower than Yili but higher than China Feihe.

• 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: SBI Shinsei Bank (8303 JP) and NS Group (471A JP) IPOs.
• Event-Driven developments: Jinke Smart Services (9666 HK), Hainan Meilan International Airport (357 HK), Makino Milling Machine Co (6135 JP), Raksul Inc (4384 JP), Toyota Industries (6201 JP). 

• Lung Fung Group (LFG HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by DBS.
• LFG is a Hong Kong-based department store chain retailing a wide variety of pharmaceutical products, health products, beauty products and other consumer goods.
• According to Frost & Sullivan in 2024, LFG was the largest pharmaceutical product retailer by retail sales value in Hong Kong, with a 5.2% market share.

• CiDi Inc (CIDI HK) is looking to raise about US$183m in its upcoming Hong Kong IPO.
• CiDi is a leading autonomous driving technology provider for commercial vehicles in China, with a strong foothold in the autonomous mining segment.
• In our previous note, we looked at the firm’s past performance. In this note, we talk about the IPO valuations.

• Iron ore’s rally appeared sentiment driven, as narrowing mill margins and easing blast furnace activity highlight softening fundamentals and fading demand support.
• Broader technical momentum is weakening as MACD turns bearish and prices retreat from Bollinger resistance, flagging rising downside risks ahead.
• The DCE-SGX spread’s position below key MAs and repeated lower Bollinger band tests signal weak momentum, leaving upside uncertain and the near-term bias tilted bearish.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Longfor Group, Seazen Group, Nickel Industries
• UST yields were stable yesterday, with long-end yields rising marginally despite a decent auction of 30Y notes (which stopped through marginally, at 4.773% award vs. the 4.774% when-issued yield).
• The yield on the 2Y UST was unchanged at 3.54%, while the yield on the 10Y UST rose 1 bp to 4.16%. Equities were mixed, as tech stocks declined on disappointing earnings from Oracle Corp. The S&P 500 rose 0.2% to 6,901, while the Nasdaq declined 0.3% to 23,594.

• Early weakness gave way to a late rebound, leaving HSI modestly lower on the week after a choppy but contained trading pattern.
• Breadth continued to deteriorate, with fewer than one third of optionable names finishing higher for a second consecutive week. Option volumes continue lower trend.
• Pop Mart stood out with a large increase in option volume after heavy selling to start the week.

• Given the change of control into Meilan Airport (357 HK), was, in effect, a  re-arrangement of Meilan Airport shares under the same ultimate parent, the regulatory approval process curiously dragged.
• Yesterday Meilan Airport announced all SPA conditions have now been satisfied, and that the SPA should complete in 20 business days. A Composite Doc will then be issued.
• Trading almost at terms. This is a back-end proposition play. My peer basket is up 11%, on average, since the Offer was first announced. Asian peers are up 15%.

• The feedback I get on this transaction canvasses comments such as: “it just doesn’t feel right“, or “there’s something funny going on“, or simply “weird“. 
• With~20% of the shareholder register, involving opaque pre-IPO investors, none of whom have provided IUs, a Shanghai Henlius (2696 HK)-like situation unfolding is bandied around. The comparison is, however, tenuous.
• Further inquiries suggest CDH is likely in control of 18% of that 20%. This needs to be clarified.

• Structural copper tightness, strong gold cash flows, and rising silver prices position Zijin for multi-year earnings growth and a valuation re-rating in 2026.
• Leadership transition reduces founder dependence, strengthens governance credibility, and enables multiple expansion as Zijin aligns with global copper-scarcity peers.
• Base valuation is HK$40–41; spot and peer convergence support HK$48–50, implying 35–40% upside with clear catalysts across copper expansions and gold stability.

• Ming Yu, a China-based clinical-stage biotech company, is looking to raise at least USD 100 million via a Hong Kong listing. MS, BOA, and CITIC are the joint book runners.
• In this note, we look at the company’s core products, MHB018A and MHB036C, and assess the selling point around the core product.
• We also look at the company’s pre-IPO investors and management team.

• Luxvisions Innovation Technology (1853852D HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by CITIC, CICC.
• It is a globally leading provider of precision optical solutions, focusing on the mid- to high-end optical module and system integration markets for global brand manufacturers across multiple sectors.
• Its products and solutions primarily serve the consumer electronics, automotive electronics, smart office applications and other emerging sectors.

• Emeren Group’s merger arbitrage presents a 13% spread with a shareholder vote imminent, despite operational softness concerns.
• TrueCar’s buyout vote is set for December 22, with AutoNation potentially reducing required financing by joining.
• AUB Group’s merger discussions with EQT and CVC ended without a binding proposal, reflecting management’s confidence in fundamentals.

• Shenzhen SDMC (1385919D CH) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by CSI.
• It is a specialized provider of smart home solutions for enterprise customers, dedicated to advancing the application of AI technologies in home settings. 
• The Company’s business model involves developing and selling primarily hardware products.

• Recent developments materially improve the setup: H200 clarity reduces a major sector overhang and removes uncertainty around chip supply, clearing the way for continued AI-infrastructure expansion in China.
• 3Q25: VNET’s strong result, 2026 outlook, advantaged power resources, and shareholder priorities (no equity dilution and defined leverage limits) reduce downside bottoms-up risk while increasing confidence on execution
• None of this is reflected in today’s valuation. With 25–30% EBITDA CAGR and improved visibility on demand and execution, VNET is positioned for a material 2026 re-rating, implying 60-100% upside.

• In today’s Convertibles Brief publication we comment on developments of the following high yield issuers: Lenovo
• The iTraxx Main was broadly flat at 53 bps, while the iTraxx X-Over narrowed 1 bps to 255 bps. The US CDX HY widened 3 bps to 323 bps. European bourses were mostly flat to 0.7% lower, except for the DAX (+0.5%), FTSE MIB (+0.3%) and IBEX 35 (+0.1%). In the US, the S&P 500 fell 0.1%, while the Nasdaq gained 0.1%.
• In Asia this morning, the Nikkei is down 0.3%, while the Hang Seng is 0.4% lower. US equity futures are mostly trading higher. WTI and Brent are USD 58.4/bbl and USD 62.0/bbl, respectively.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: China Jinmao, West China Cement, Biocon Biologics
• UST yields declined yesterday, led by the front end, following the Fed’s 25-bp rate cut and announcement that it will commence T-bill purchases. The UST curve bull steepened sharply, with the yield on the 2Y UST falling 8 bps to 3.54%, while the yield on the 10Y decreased 4 bps to 4.15%.
• Fed-dated OIS continued to price in two rate cuts in 2026 (one before June and another by October), despite the FOMC’s dot plot indicating just one cut for 2026. Equities climbed, with the S&P 500 rising 0.7% to 6,887.

• On 30 April, Haikou Meilan International Airport entered a SPA with Hainan Airport Infrastructure (600515 CH) to sell its Hainan Meilan International Airport (357 HK) 50.19% stake at RMB9.85 (HK$10.62).
• The SPA precondition is satisfied, and the SPA will be completed within 20 business days. Completion will trigger an unconditional MGO at HK$10.62.
• Tendering is likely to be low as the offer is unattractive. At the last close and for a mid-February 2026 payment, the gross/annualised spread is 0.2%/1.1%.

• HashKey (3887 HK) is looking to raise up to US$215m in its upcoming Hong Kong IPO.
• It operates the largest licensed crypto exchange in Hong Kong.
• In this note, we examine the IPO dynamics, and look at the firm’s valuation.

• JD Industrials (7618 HK) raised around US$383m, after pricing in its Hong Kong IPO at the mid-point.
• JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
• We looked at the company’s past performance in our earlier notes. In this note, we talk about the trading dynamics.

• At the top end of the price range (HK$6.95), HashKey (3887 HK)‘s IPO equals a FY26F P/S of 14.9x, and this is not a particularly appealing level. 
• While it is the industry leader in the region and Hong Kong, it is expected to stay in the red for FY25-27, making a PER comparison meaningless. 
• Tiny public shareholder base, cryptocurrency volatilities, and the increasingly competitive environment heightened risks. Only a low-end IPO price, or 12.7x FY26F P/S, is attractive.

• Poised to capture the full recovery of Chinese international travel, SIA’s primary asset, Shanghai Pudong International Airport (PVG), stands as China’s premier international gateway. The ongoing recovery in passenger volumes, particularly on lucrative international routes, is the primary catalyst for earnings growth.
• Non-aeronautical revenue, especially from duty-free concessions, represents a significant value driver. The upcoming renewal of duty-free contracts from 2026 provides a potential upside, although recent negotiations have sometimes favored the operator, indicating a key area to monitor.
• Massive infrastructure investment, including the Phase IV expansion and a new T3 terminal, will solidify PVG’s long-term competitive position as a mega-hub in Asia. This expansion is designed to increase annual passenger capacity to 130 million, accommodating future growth in the Yangtze River Delta region.

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• Revenue growth is just at the industry level and the growth rate is lower than the CAGR of market size of domestic brands. So, CHANDO is not a fast-growing company.
• Profit margin is disappointing due to high selling and marketing costs. Net profit fluctuated. This reflects that CHANDO’s profit model is not yet stable, with relatively weak risk resistance capacity
• Due to lower performance growth and profit margin, we think valuation of CHANDO would be lower than peers such as Giant Biogene, Mao Geping, Chicmax in Hong Kong market. 

• ANE Cayman Inc (9956 HK)‘s Offer, by way of a Scheme from Centurium Partners, a pre-IPO investor, in tandem with Temasek, has displayed some unique (unusual?) firsts. 
• There is the 9%+ stake held by CDH – another pre-IPO investor – a shareholder that fails to appear in subsequent annual/interim reports; or even Hong Kong disclosure announcements.
• Then late last week, the Offeror opted not to raise the cap on the scrip option alternative, despite shareholders expressing interest. 

• Tencent is a dominant force in China’s internet landscape, built upon the vast user ecosystems of its social platforms, WeChat and QQ, which serve as powerful distribution channels for its other businesses.
• The company’s primary revenue drivers are Value-Added Services (VAS), encompassing the world’s largest online gaming business and various digital content subscriptions, alongside a rapidly growing FinTech and Business Services segment.
• While facing significant domestic competition and a dynamic regulatory environment, Tencent is pursuing future growth through international expansion, particularly in gaming, and substantial investments in enterprise-facing technologies like cloud computing and AI.

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• The Hang Seng Index (HSI INDEX) rally has lost traction since mid-September. The index seems to be approaching a corrective phase.
• Our model signaled a modestly overbought state at the end of last week, but the index went down pretty fast this week: it has already breached the median support (25440). 
• This insight will analyze the model to find support entry zones to play short-term rallies or to take profit from hedges. 

• CiDi Inc. is a high-growth, market-leading provider of autonomous driving solutions for commercial vehicles in China, with a dominant position in the niche but rapidly expanding autonomous mining truck sector.
• The company has demonstrated explosive revenue growth, driven by its core autonomous driving segment. However, this growth is accompanied by significant operating losses, negative cash flow, and worsening liquidity, making its upcoming Hong Kong IPO critical for funding future operations and expansion.
• Key risks for investors include high customer and supplier concentration, intense competition in the autonomous vehicle space, and execution risk associated with its ambitious international expansion plans.

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• In June 2025, Beijing Geekplus completed an initial public offering at fixed IPO offer price of HK$16.80, raising ~HK$2.8B of net proceeds in Hong Kong.
• A Beijing-based AMRs company announced interim results for the six months ended Jun-25 and posted strong revenue growth of ~31% y/y coupled with improving profitability. 
• The stock peaked at HK$33.90 (~14x FY25 P/S) in October and fell ~38% over the next month. The company’s cornerstone lockup will expire on January 8, 2026.

• AVATR Technology (1913753D CH) is looking to raise about US$1bn in its upcoming Hong Kong IPO. The deal will be run by CICC and CITIC.
• AVATR Technology is a New Energy Passenger Vehicle (NEPV) brand focused on delivering a “new-luxury emotionally intelligent mobility experience” that combines aesthetic design, advanced intelligent features and strong product performance.
• AVATR has launched four mass-produced models which offer both pure electric (BEV) and range-extended powertrain (REEV) options. These models span a wide price range between RMB200,000 and RMB700,000.

• NetEase is a dominant force in China’s gaming market, second only to Tencent, with a proven track record of developing and operating highly successful and long-running PC and mobile games, which form the bedrock of its revenue and profitability.
• The company is actively pursuing a global expansion strategy to diversify its revenue base beyond China, establishing overseas studios and investing in international talent to create content for a global audience. This move is crucial for mitigating risks associated with the domestic regulatory environment.
• Beyond its core gaming business, NetEase is cultivating a diversified ecosystem that includes its online education service (Youdao), a popular music streaming platform (NetEase Cloud Music), and other innovative businesses, although these currently contribute a smaller portion of overall revenue.

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• Foshan Haitian Flavouring & Food Company (3288 HK), China’s leading condiments company, raised around US$1.5bn in its H-share listing. The lockup on its cornerstone investors is set to expire soon.
• FHCC is China’s leading condiments company within its main product categories of soy sauce, oyster sauce, flavored sauce, specialty condiment products and other products.
• In this note, we will talk about the lockup dynamics and possible placement.

• CiDi Inc (CIDI HK) is looking to raise about US$200m in its upcoming Hong Kong IPO.
• CiDi is a leading autonomous driving technology provider for commercial vehicles in China, with a strong foothold in the autonomous mining segment.
• In our previous note, we looked at the firm’s past performance. In this note, we talk about the updates from its recent filing.

• Competition in the entire GLP-1 market is constantly intensifying and evolving, which is expected to shift from the current focus solely on BMI indicators to a comprehensive patient-centered management model.
• XW003 faces the challenge of head-to-head trials with competing drugs. There could be uncertainties in future clinical trials of XW004, XW014. Commercialization is a tough task for Sciwind’s GLP-1 pipeline.
• The total peak sales of XW003, XW004 and XW014 could be RMB5-7 billion. Valuation of Sciwind could be lower than peers such as Innovent Biologics (1801 HK), Innogen (2591 HK).  

• There are 2 constituent changes for the CSI Hong Kong Connect Internet Index in December. Plus there are large capping changes for some stocks.
• Estimated one-way turnover at the rebalance is 11.9% and the round-trip trade is HK$26.6bn (US$3.4bn). There are 16 stocks with more than 1x ADV to trade.
• The adds drifted lower vs the deletes in September and October but have started outperforming in December. There could be more outperformance following announcement of the index changes.

• The deliveries still grew strongly by 24% YoY in November 2025.
• We believe Geely will take BYD’s place as the largest Chinese producer.
• We also believe the stock has an upside of 49% for the next twelve months.

• Jinke Smart Services (9666 HK)’s revised composite document relating to Boyu’s enhanced offer of HK$8.69 will be despatched on 9 December. The delisting EGM is on 24 December.
• The enhanced offer is conditional on the shareholders’ approval of the delisting resolution (low risk) and the 90% minimum acceptance condition from disinterested shareholders (high risk).
• Acceptances have not budged since 18 November, which explains Boyu’s introduction of two acceptance options on 4 December. The 90% minimum acceptance condition remains problematic. 

• HashKey Digital Asset Group Lt (2365361D HK) is looking to raise at least US$200m in its upcoming Hong Kong IPO.
• It operates the largest licensed crypto exchange in Hong Kong.
• In this note, we look at the firm’s past performance.

• After a tragic 61.4pp underperformance against the HSI in 2025, the market is almost unanimously bearish on Meituan (3690 HK), which presents opportunities in 2026.
• Negative news did not push it further down; P/B is at over 1SD below average, and net cash-to-share price is 5.6pp above the historical average.
• 3Q25 margins are so depressed that sustaining the price war is difficult. As the 7th-heaviest HSI constituent, it is the one to move the Index next year. 

• Ping An L&H: quality-focused restructuring has nearly doubled agent productivity since 2019, pushing NBV to post-Cvoid highs despite a much smaller agency force.
• Ping An P&C: tech integration and enablement is closing the gap vs. market leader in product distribution and customer acquisition.
• Integrated finance and health/senior care strategy presents cross-selling opportunities and differentiated upside not yet priced in.

• Xiamen Tungsten holds a dominant position in the global tungsten market, benefiting from a vertically integrated business model that spans from mining to high-value-added downstream products.
• Strategic expansion into new energy materials, particularly battery cathodes, positions the company to capitalize on the rapid growth of the electric vehicle (EV) and energy storage markets.
• While exposed to commodity price volatility and regulatory risks, the company’s strong market share, diversified operations across tungsten, rare earths, and battery materials, and consistent financial performance provide a solid foundation for future growth.

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• After suspending shares for near-on three weeks, Boyu had a change of heart on the 18th November, and tabled a delisting Offer for Jinke Smart Services (9666 HK). 
• Boyu is offering HK$8.69/share IF the Scheme-like vote and 90% tendering conditions are satisfied. Failing that, the unconditional MGO price of $6.67/share is the fall-back.
• The Revised Composite Doc is now out, with the EGM on the 24th December. The IFA says “fair & reasonable“. They said the same at HK$6.67/share. 

• Guangdong Topstar Technology is an integrated industrial automation solutions provider in China, focusing on intelligent equipment such as industrial robots, injection molding machines, and CNC machines. The company aims to provide turnkey smart factory solutions, leveraging its core technologies in controllers, servo drives, and vision systems.
• The company is experiencing severe financial distress, evidenced by a dramatic decline in revenue and a shift to a significant net loss in the most recent full fiscal year. This is corroborated by deeply negative multi-year compound annual growth rates (CAGRs) for both revenue and net income.
• While Topstar operates in the high-growth Chinese industrial automation market, which benefits from strong secular tailwinds like rising labor costs and government support, its recent performance indicates significant execution challenges and intense competitive pressures from both domestic and international players.

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• InxMed, a China-based clinical-stage biotech company, is looking to raise at least USD 100 million via a Hong Kong listing. CITIC and CCBI are the joint book runners.
• In this note, we look at the company’s core product, ifebemtinib, and assess the selling point around the core product.
• We also look at the company’s pre-IPO investors and management team.

• HK$77bn/Day of gross SOUTHBOUND activity last week vs HK$88bn the week before, HK$100+bn the week before. Gross flows are winding down.
• Watch for news on the Dual Counter (RMB) Trading eligibility for SOUTHBOUND near-term. That could re-up the pace .
• The data tables below update on a daily basis in the Tools section of Smartkarma. The Southbound Flow Monitor and AH Pairs Monitor are both there – free – for all SK readers.

• NIO (NIO US) is a Chinese premium electric vehicle manufacturer listed on three exchanges. 
• NIO’s Q4 deliveries guidance was below expectations, and sales momentum is on a declining trend. Sustainably hitting its 20% gross margin target and achieving breakeven in 2026 seems a stretch.  
• NIO’s valuation is stretched, trading at a material premium to the median EV/Sales and growth-adjusted EV/Sales multiples of Chinese EV peers. 

• Hs outperformed As on average by 0.99% within the liquid AH pair universe over the past two weeks. Beautiful Skew Behaved Badly.
• Quiddity H/A Portfolio performance slightly negative over two weeks, both outright and alpha.
• The data tables below update on a daily basis in the Tools section of Smartkarma. The Southbound Flow Monitor and AH Pairs Monitor are both there – free for all SK readers.

• Based on 2025 revenue forecast of RMB24.1bn and the IPO price range, P/S is about 1.28-1.56x, higher than ZKH but lower than Ww Grainger. This is a reasonable valuation range.
• The median IPO price range (HK$14.1/share) is a more likely/relatively safe outcome.This not only acknowledges JD Industrials’ leading position/growth story, but also partly reflects the market’s perception of its challenges.
• The IPO pricing is the result of seeking a balance between the “premium of industry leaders” and “its shortcomings”.However, future valuation depends on whether JD Industrials can solve fundamental issues.

• Suzhou Novosense Microelectron (688052 CH), an analog chips producer, raised around US$285m in its H-share listing.
• According to Frost & Sullivan, in terms of revenue from analog chips in 2024, SNM ranked fifth among Chinese analog chip companies in the Chinese analog chip market
• We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

• 52TOYS Development filed to go public in Hong Kong. The Beijing-based toymaker is planning H-share listing that could raise up to $200M.
• In my second insight about 52TOYS IPO, I discuss IPO valuation, examine competitive landscape and focus on comparable company analysis.
• 52TOYS manages 35 proprietary IPs and 80 licensed IPs, including pop, sci-fi and cultural IPs. The company collaborates with 400+ distributors, covering 20,000+ sales outlets. 

• Shenzhen H&T Intelligent is a major manufacturer of intelligent controllers for home appliances and power tools, strategically expanding into high-growth areas like automotive electronics and the Internet of Things (IoT).
• The company exhibits a strong long-term revenue growth trajectory, with a 10-year CAGR of 27.27%; however, recent performance shows significant margin compression and a concerning 3-year decline in net income and EPS.
• Valuation appears stretched, with a P/E ratio of 46.3x, which seems elevated given the recent deterioration in profitability and negative free cash flow, suggesting a high-risk, high-growth investment profile.

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• I tally 37 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma. Those arbs metrics and upcoming events are detailed below.
• Three new deals were discussed on Smartkarma this week: Predictive Discovery (PDI AU), African Gold Ltd (A1G AU), and Low Keng Huat Singapore (LKH SP).
• Key updates/news also took place on: ANE Cayman Inc (9956 HK), Steadfast (SDF AU), and Spindex Industries (SPE SP).

• TOP TOY is expected to IPO in 2026. The company has completed a ~$60M Series A round that was led by Temasek at a ~$1.3B post-money valuation in July.
• In my insight, I discuss IPO valuation, update relative valuation table and examine competitive landscape among domestic and international toymakers.
• TOP TOY revenue growth accelerated in 2025 coupled with improving profitability and growing free cash flows. TOP TOY was a major growth engine for MINISO’s business in 3Q.