China

In today’s briefing:

Merger Arb Mondays (08 Sep) – Kangji, OneConnect, Ashimori, Pacific Ind, RPM, Santos, Zeekr
Chery Automobile IPO: The Bear Case
Volatility Cones: Spotting Opportunities in Tencent, JD.com, Ping An & More
Pop Mart (9992 HK) – 2025 High Growth Is a Done Deal, but How About 2026?
MicroPort MedBot (2252 HK): Overseas Markets Shine; Tuomai Drives Growth; Losses Narrow in 1H25
SHEIN / Temu / AliExpress: After US Ended “De Minimis” Exemption, Shipments to US Declined 81%

Merger Arb Mondays (08 Sep) – Kangji, OneConnect, Ashimori, Pacific Ind, RPM, Santos, Zeekr

I 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: Mayne Pharma (MYX AU), Smart Share Global (EM US), ENN Energy (2688 HK), Dongfeng Motor (489 HK), Joy City Property (207 HK), Santos Ltd (STO AU).
Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Humm Group (HUM AU), Ainsworth Game Technology (AGI AU), Ashimori Industry (3526 JP), Toyota Industries (6201 JP).

Chery Automobile IPO: The Bear Case

Chery Automobile (CH3456 CH), a Chinese automobile manufacturer, has secured HKEx listing approval for a US$1.5-2.0 billion IPO.
In Chery Automobile IPO: The Bull Case, I highlighted the key elements of the bull case. In this note, I outline the bear case.
The bear case rests on weakening trends of the primary business, gross margin pressure, declining contract liabilities and factoring of receivables.

Volatility Cones: Spotting Opportunities in Tencent, JD.com, Ping An & More

Context: Volatility cones provide a clear framework to evaluate whether options are trading cheap or rich.
Highlights: Major stocks, including Tencent (700 HK), Xiaomi (1810 HK), and Meituan (3690 HK), trade at historically cheap implied volatility. Upcoming earnings are starting to be reflected in November IV.
Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.

Pop Mart (9992 HK) – 2025 High Growth Is a Done Deal, but How About 2026?

The certainty of 2025 performance is actually high. 25H2 performance is expected to be better than that in 25H1. Our forecast is net profit to reach RMB10 billion in 2025.
The concern is Pop Mart may face the sustainability problem of performance under the high base of 2025 starting from 2026. If consumers develop aesthetic fatigue towards LABUBU, performance would decline.
In a neutral situation, 30-35x P/E is a comfortable range.Valuation upside depends more on the sustainability of THE MONSTERS popularity and whether the popularity of other IPs can exceed expectations.

MicroPort MedBot (2252 HK): Overseas Markets Shine; Tuomai Drives Growth; Losses Narrow in 1H25

Shanghai MicroPort MedBot Group (2252 HK) recorded 1H25 revenue of RMB 176M, up 77% YoY driven by rapid expansion of commercialization of multiple products. Overseas market sales grew 189% YoY.
Toumai Laparoscopic Surgical Robot continued to be the main growth driver securing new orders of 30+ units and achieving commercial installation of 22 units.
MedBot’s recent approvals of Toumai variants, technology advantages, diversified portfolio and commercialization strength place it at an inflection point, expected to be back in the black soon.

SHEIN / Temu / AliExpress: After US Ended “De Minimis” Exemption, Shipments to US Declined 81%

Postal parcel volume bound for the US fell -81% after exemption ended Aug 29
In many cases, logistics providers unwilling to manage US Customs process
We believe the change undermines US model used by SHEIN, Temu, AliExpress

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Sep 07

Daily Brief China: Chery Automobile, Hangzhou Kangji Medical Instrument Co., Ltd., Mixue Group, S.F. Holding and more

In today’s briefing:

Chery Automobile IPO: The Bull Case
Last Week In Event SPACE: ZEEKR/Geely, Kangji Medical, HKBN, Lynas, Huaxin Cement, Nidec
China Healthcare Weekly (Sep.7)- Device Inflection Point, WuXi XDC Placement, MIXUE’s Lock-Up Expiry
Chinese Express Firms All Saw H1 OPM% Fall — Except SF Hldg | Pair Trade: LONG SF Vs SHORT ZTO, J&T

Chery Automobile IPO: The Bull Case

Chery Automobile (CH3456 CH), a Chinese automobile manufacturer, has secured HKEx listing approval for a US$1.5-2.0 billion IPO.
Chery is the second largest Chinese domestic brand passenger vehicle company, and the 11th largest passenger vehicle company globally.
The bull case rests on market share gains, encouraging NEV segmental performance, good margin profile and cash generation.

Last Week In Event SPACE: ZEEKR/Geely, Kangji Medical, HKBN, Lynas, Huaxin Cement, Nidec

ZEEKR (ZK US) traded wide to the scrip terms ahead of Geely Auto (175 HK)‘s EGM Vote. That was a buying opportunity.
A positive surprise as SAMR expediently signs off on the Hangzhou Kangji Medical Instrument Co., Ltd. (9997 HK) transaction. This could be wrapped up before Xmas.
China Mobile (941 HK) comfortably clears the 50% conditional threshold into HKBN Ltd (1310 HK); however compulsory acquisition appears out of reach

China Healthcare Weekly (Sep.7)- Device Inflection Point, WuXi XDC Placement, MIXUE’s Lock-Up Expiry

The inflection point of the policy on medical device is expected to appear this year. High-end imaging, medical robots, AI, and biomaterials are the four fields worth investors’ attention.
WuXi XDC announced Placement to raise HK$1.3 billion net proceeds at HK$58.85/share.XDC will have >30% YoY growth in 2025-2027 but Li Ge/WuXi AppTec’s reduction of holdings is a discordant voice.
MIXUE’s lock-up of shares allotted to cornerstone investors expired. Current valuation is acceptable based on 2025 forecast, but investors need more ‘safety margins’ on valuation due to concerns on outlook

Chinese Express Firms All Saw H1 OPM% Fall — Except SF Hldg | Pair Trade: LONG SF Vs SHORT ZTO, J&T

With the exception of SF Holding, all listed express firms reported lower H1 OP%
SF’s independence and unique product mix protected profits as volume surged
We suggest going Long SF Hldg against Short positions in ZTO & J&T

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Sep 06

Daily Brief China: Alibaba, Xiaomi, Hang Seng Index, Iron Ore and more

In today’s briefing:

Alibaba’s AI Chip Leap: A Threat To Nvidia’s China Dominance?
[Xiaomi Inc. (1810 HK, BUY, TP HK$61) TP Change]: C2Q25 Review: Getting into the Brand Expansion Era
Hong Kong Single Stock Options Weekly (Sep 01–05): Option Activity Eases, Speculation In Focus
[Alibaba (BABA US, BUY, TP US$181) Target Price Change]: C2Q25 Review: Who Will Rescue Meituan?
[IO Technicals 2025/36] Overextended Rally Faces Reality Check

Alibaba’s AI Chip Leap: A Threat To Nvidia’s China Dominance?

As geopolitical pressures and regulatory hurdles continue to stifle Nvidia’s ability to deliver its most powerful AI processors to Chinese buyers, Alibaba Group Holding Ltd. is rapidly stepping in to fill the void.
The Chinese tech conglomerate has developed a new AI chip that is both more versatile and domestically manufactured—breaking its prior dependency on Taiwan Semiconductor Manufacturing.
This new chip, tailored for a broad range of AI inference tasks, is currently in testing and could offer Chinese enterprises a viable alternative to Nvidia’s downgraded H20 processor, which was specifically built for the Chinese market under export restrictions.

[Xiaomi Inc. (1810 HK, BUY, TP HK$61) TP Change]: C2Q25 Review: Getting into the Brand Expansion Era

By Eric Wen

Xiaomi reported C2Q25 top line, non-IFRS operating profit and IFRS net income (2.3%), (0.5%) and 41% vs. our estimates, and in-line, (14%) and 31% vs. consensus.
Xiaomi’s growth strategy is to replicate its brand success from smartphones to appliances and EV’s and from China to the rest of the world.
We raise TP from HK$56 to 61 and place Xiaomi into TOP BUY list.

Hong Kong Single Stock Options Weekly (Sep 01–05): Option Activity Eases, Speculation In Focus

By John Ley

Market breadth remained weak as option activity slowed and speculation concerns lingered around speculative trading.
Option demand cooled, led by waning interest in Calls, while heavyweights in Consumer Discretionary kept overall volumes supported.
Trading momentum slowed, but sector heavyweights maintained dominance, with implied vols drifting lower across much of the market.

[Alibaba (BABA US, BUY, TP US$181) Target Price Change]: C2Q25 Review: Who Will Rescue Meituan?

By Eric Wen

Alibaba (BABA) reported C2Q25 top line, non-GAAP op. profit and GAAP net income (4.3%), (10%) and 7.7% vs. our est. and (2.2%), 20% and 9.5% vs. cons..
As stated in our previous reports, we believe O2O e-commerce will constitute ~20% of China’s e-commerce and BABA will capture ~50%.
We maintain BABA’s TOP BUY classification and raise TP to US$181

[IO Technicals 2025/36] Overextended Rally Faces Reality Check

By Umang Agrawal

Chinese mills eye production restart, boosting iron ore demand, but bloated construction steel inventories threaten to cap price gains.
Managed money participants increased net long exposure to 134.9k lots last week, with overall futures and options open interest slipping by 11.2%.
Bullish MA crossover drove prices above short-term averages. However, prices pressing the upper Bollinger band suggest overextension and heightened risk of a near-term pullback.

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Sep 05

Daily Brief China: Hangzhou Kangji Medical Instrument Co., Ltd., Pop Mart, Tencent Holdings (ADR), Alibaba, Tencent Music Entertainment Group, Three Squirrels, Zylox-Tonbridge Medical Technology and more

In today’s briefing:

Kangji Medical (9997 HK): Speedy Turnaround On Pre-Cons
Pop Mart (9992 HK): Index Inclusion & Beyond. Toy Craze or Emerging ACG Play?
Tencent Holdings: An Evergreen Game Strategy to Diversify Portfolio & Reinforce Market Position!
Alibaba (9988 HK): Stock Surges Post-Earnings, Options Market Reprices
Asian Equities: Changes to Our Model Portfolio; More Selective on Chinese Consumption
Three Squirrels A/H Listing: Heavy Price Competition; Thin Margins
Zylox Tonbridge Medical (2190 HK): No More Interventions Needed, Blockages Cleared for Growth

Kangji Medical (9997 HK): Speedy Turnaround On Pre-Cons

Kangji Medical Instrument (9997 HK) announced last night all pre-cons have been squared away. That must be some kind of record to secure SAMR approval for a Hong Kong-listed privatisation.
Back on the 12th August, Kangji Medical announced a less-than-ideal Offer, by way of a Scheme, from a consortium led by TPG and Qatar Investment Authority, together with the founders.
What next? The Scheme Doc dispatch remains the 31st October, unless announced otherwise, as the Cayman Court is still on its six week “vacation”.

Pop Mart (9992 HK): Index Inclusion & Beyond. Toy Craze or Emerging ACG Play?

By Devi Subhakesan

Pop Mart (9992 HK) will be added to both the Hang Seng Index (HSI) and the Hang Seng China Enterprises Index (HSCEI) — effective Monday, September 8, 2025.
Beyond the tail winds from this technical upgrade, stock’s further upside rests on investor conviction on its potential to continue to deliver strong growth beyond the short term.
Pop Mart’s near term growth rests on proving IP durability and executing global scale-up.

Tencent Holdings: An Evergreen Game Strategy to Diversify Portfolio & Reinforce Market Position!

Tencent Holdings Limited delivered a robust financial performance for the second quarter of 2025, driven by significant growth across its business segments.
The company reported a 15% year-on-year increase in total revenue, reaching RMB 185 billion.
This growth was supported by a 22% surge in gross profit to RMB 105 billion and an 18% increase in non-IFRS operating profit to RMB 69 billion.

Alibaba (9988 HK): Stock Surges Post-Earnings, Options Market Reprices

Context:Alibaba (9988 HK) reported Q1 results on 29 Aug. Despite a revenue miss, strong cloud growth and its AI chip announcement drove the stock up double digits.
Highlight: Implied volatility deflated sharply post-earnings, with the September contract down 8.5% and back months also lower, while skew shifted down in parallel.
Why it matters: Put the current volatility surface into context. This insight can serve as a case study of how earnings-driven repricing can inform positioning ahead of future events.

Asian Equities: Changes to Our Model Portfolio; More Selective on Chinese Consumption

By Manishi Raychaudhuri

Since inception, our Model Portfolio underperformed, having appreciated 5.8%, while MSCI Asia-ex-Japan moved up 8.3%. BYD, Hyundai Engineering and Digiplus dragged it down. Alibaba, Trip.Com, Tencent, Maruti pulled it up.
We exclude the secular underperformers BYD and Digiplus and the unexciting Yum China. We include Tencent Music, Wuxi AppTec, International Container Terminals. Focus on China’s “new consumption” trends, CRDMO prowess.
We remain overweight HK/China despite the market’s recent outperformance. Immense stock selection opportunities in the market guide our stance. We remain overweight Korea, neutral India and underweight Taiwan.

Three Squirrels A/H Listing: Heavy Price Competition; Thin Margins

By Nicholas Tan

Three Squirrels (TRS HK) is looking to raise around US$200m in its upcoming H-share listing.
It began selling nuts through e-commerce channels. Over the years, it had evolved significantly, growing from a single category nut brand into the largest domestic snack company in China.
In this note, we look at its past performance and other deal dynamics that might impact the listing.

Zylox Tonbridge Medical (2190 HK): No More Interventions Needed, Blockages Cleared for Growth

Zylox-Tonbridge Medical Technology (2190 HK) carried forward 2024 momentum, moving into 1H25. In 2024, sales had grown 48% to RMB 783M, followed by 32% rise to RMB 482M in 1H25.
Leveraging their robust R&D expertise and integrated technology platforms, the company has made significant progress and lined up launches of several critical innovative projects in neuro and peripheral-vascular interventional device.
China remains the main growth market for Zylox, though the company is deepening its presence overseas. Zylox stands at an inflection point from where the growth momentum will gain pace.

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Sep 04

Daily Brief China: Hangzhou Kangji Medical Instrument Co., Ltd., PC Partner, WuXi XDC Cayman , 360 Finance, Inc., GenFleet Therapeutics, Ligent Technologies, Midea Group, Hesai Group, 3SBio Inc, Shanghai Forest Cabin Biological-Tech and more

In today’s briefing:

Kangji Medical (9997 HK): Precondition Satisfied for the Light Scheme Offer
PC Partner (1263 HK): Thoughts On The HKEx Delisting
WuXi XDC Cayman (2268 HK) Placement: Capex to Accelerate Growth Momentum
2025 High Conviction: QFIN US – Event-Driven: Regulatory Overhang Sets Up 100%+ Upside Post-Clarity
Genfleet (劲方医药) Pre-IPO: Thoughts on Valuation
Ligent Technologies Pre-IPO Tearsheet
Midea Group(300 HK)-Firing on All Cylinders; Disciplined Execution Across Legacy &Emerging Verticals
Hesai Secondary HK Offering – Stock Has Been Recovering, a Look at Possible Trading Setup
3SBio Inc (1530 HK): NDA Approvals Awaited Amid Sales Decline; Upfront Payment To Boost 2H25
Pre-IPO Shanghai Forest Cabin Biological-Tech – The Business Model and the Concerns Behind

Kangji Medical (9997 HK): Precondition Satisfied for the Light Scheme Offer

The precondition for Hangzhou Kangji Medical Instrument Co., Ltd. (9997 HK)’s scheme privatisation from a consortium is satisfied. The offer, which has been declared final, is at HK$9.25 per share.
The key condition will be approval by at least 75% disinterested shareholders (<10% of all disinterested shareholders rejection). Crucially, the blocking stake is below the substantial disclosure threshold.
Despite the recent derating of peers, the vote risk remains medium-to-high due to a solid interim, the imminent surgical robot growth story, unfavourable AGM voting patterns, and emerging retail opposition.

PC Partner (1263 HK): Thoughts On The HKEx Delisting

On the 15th November 2024, personal computer parts and accessories play PC Partner (1263 HK)‘s secondary listing, by way of introduction, was effected.
The SGX also granted in-principle approval for the conversion of its secondary listing status to a primary listing. This dual-listing status (SGX + HKEx) took effect on the 20th August.
In tandem with a SGX free float waiver, PCP will now seek a HKEx delisting. This listing/delisting construct is to ensure the uninterrupted supply of NVIDIAs GPUs.

WuXi XDC Cayman (2268 HK) Placement: Capex to Accelerate Growth Momentum

WuXi XDC Cayman (2268 HK) is placing up to 22M shares at the placing price of HK$58.85 per share to raise a maximum gross proceed of HK$1,311M under general mandate.
The company will also issue ~24M shares to its controlling shareholder Wuxi Biologics at HK$58.85 per share for a total consideration of ~HK$1,420M, subject to independent shareholders’ approval.
90% of the proceeds will be used for further expansion of the company’s production capacity in relation to clinical and commercial manufacturing for bioconjugates, drug substances, and drug products.

2025 High Conviction: QFIN US – Event-Driven: Regulatory Overhang Sets Up 100%+ Upside Post-Clarity

By Raj S, CA, CFA

QFIN US is down 30% since July on fear that the Oct 1 regulatory action on 24%+ loans will lead to significant and sustained earnings downgrades.
QFIN’s industry-leading franchise, risk management history, capital return yield (~18-20%), and strong balance sheet support a strong recovery post-regulatory clarity and cleanup.
Valuation at 1.2x FY1 P/BV already discounts worst case; QFIN’s recovery potential leaves scope for 100%+ upside (peak valuation at 2.4x in Mar-24 pre-regulation).

Genfleet (劲方医药) Pre-IPO: Thoughts on Valuation

By Ke Yan, CFA, FRM

Genfleet, a China-based clinical-stage biotech, is looking to raise USD 250 million via a Hong Kong listing. The sole book runner is CITIC.
In our previous insight, we looked at the company’s core products and its management team, as well as investor backing.
In this note, we will provide an rNPV-based valuation for the company.

Ligent Technologies Pre-IPO Tearsheet

By Hong Jie Seow

Ligent Technologies (LGT HK) is looking to raise about US$100m in its upcoming Hong Kong IPO. The deal will be run by Citibank and CITIC Securities
Ligent Technologies is a global provider of optical communication and connectivity products that support the high-speed data needs of AI computing networks, cloud services, and telecom infrastructure.
Its main offerings include optical transceivers (including datacom and telecom solutions), optical chips, and optical network terminals. These solutions power applications for data centers, telecom operators and computing systems.

Midea Group(300 HK)-Firing on All Cylinders; Disciplined Execution Across Legacy &Emerging Verticals

By Sreemant Dudhoria,CFA

Firing on All Cylinders :Midea Group (300 HK) delivered robust 15.7% YoY revenue growth and 25% profit increase in H1 2025, driven by strong domestic demand and overseas expansion.
Disciplined Execution : Smart Home remained the largest contributor, while Energy Solutions and Intelligent Building Technology delivered fastest growth; overseas revenue rose 17.7% YoY, now 42.5% of group sales.
Available at compelling valuation of 13.7x P/E (FY25e), Midea emphasizes R&D leadership, digital transformation, and green solutions to sustain long-term growth.

Hesai Secondary HK Offering – Stock Has Been Recovering, a Look at Possible Trading Setup

By Sumeet Singh

Hesai Group (HSAI US) plans to raise around US$200-300m in its secondary listing in Hong Kong.
The company won HK listing approval and filed its PHIP on 31st August 2025. It will look to launch its secondary offering soon.
In this note, we’ll take a look at the deal and talk about the impact of the raising.

3SBio Inc (1530 HK): NDA Approvals Awaited Amid Sales Decline; Upfront Payment To Boost 2H25

3SBio Inc (1530 HK) witnessed a revenue decline of 1% in 1H25. Company’s core product Tpiao’s sales decreased 4% to RMB 2.4B (54% of total) impacted by lower volume.
Phase III clinical trial of SSS06 (anemia in chronic renal failure), 608 (psoriasis), and 613 (acute gouty arthritis) is complete. NDAs for the same are under review by NMPA.
3SBio shares are trading at forward P/E of 11.5x, lower than peers. We feel that there is still upside potential left in the stock.

Pre-IPO Shanghai Forest Cabin Biological-Tech – The Business Model and the Concerns Behind

FOREST CABIN holds a leading position in camellia oil segmentation, with mid-to-high end positioning and high gross profit margin. But high operating cost will put pressure on net profit margin.
Considering the risk of recession/depression, consumption downgrade and reducing non-rigid spending will be the main theme in short term. 50% YoY revenue growth in 2024 is likely to be unsustainable.
Valuation of FOREST CABIN could be lower than peers. Stock price performance would highly depend on market sentiment, company growth trend, and visibility of profitability at the time of listing.

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Sep 03

Daily Brief China: Alibaba, Pop Mart, BYD, Mixue Group, Xiaomi, Simcere Pharmaceutical Group, ZTO Express Cayman , Seazen (Formerly Future Land), GenFleet Therapeutics and more

In today’s briefing:

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$7.4bn of Flows Post Capping (Sep 2025)
Index Changes and Rate Cuts: Key Events in September 2025
India & China – Rekindling Brotherhood
Mixue (2097 HK): Lock-Up Expiry. After Doubling Post-IPO, Is the Fizz Running Out?
Xiaomi (1810 HK): In 2Q25, Not Just Cars, But Fast Home Appliance
BYD (1211 HK) Tactical Outlook: Maybe Soon Is Time to BUY…
Simcere Pharmaceutical (2096 HK) Placement: Innovative Pipeline Enlightens Growth Prospects
Alibaba’s Logistics Arm CaiNiao Relegated To “Others” Status | Implications for Chinese Express?
Lucror Analytics – Morning Views Asia
Pre-IPO GenFleet Therapeutics (PHIP Updates) – Some Points Worth the Attention

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$7.4bn of Flows Post Capping (Sep 2025)

By Brian Freitas

The September rebalance of the Hang Seng family of indices will use today’s closing prices to cap the index constituent weights.
The net round-trip trade across all stocks across the five indices is estimated at HK$57.55bn (US$7.4bn). There is size to trade in a lot of stocks.
Alibaba (9988 HK) has flipped from a net buy to a net sell following its huge rally yesterday.

Index Changes and Rate Cuts: Key Events in September 2025

September brings heavy index rebalancing activity. Pop Mart (9992 HK) will join both the Hang Seng Index (HSI INDEX) and the Hang Seng China Enterprises Index (HSCEI INDEX).
The Fed is widely expected to cut rates and Asia-Pac peers (BoJ, RBA, RBI) are also meeting.
Why Read: Plan ahead and take into account known market events when making investment and trading decision.

India & China – Rekindling Brotherhood

By Pranav Bhavsar

The past month has witnessed a remarkable shift in India-China relations, with multiple high-profile developments signaling the most significant thaw in bilateral ties since 2020.
Despite the expansion in bilateral commerce, India continues to face a significant trade deficit, especially in pharmaceuticals, where dependence on Chinese imports remains high.
At present, the revived engagement seems to offer greater advantages to Chinese companies than to their Indian counterparts.

Mixue (2097 HK): Lock-Up Expiry. After Doubling Post-IPO, Is the Fizz Running Out?

By Devi Subhakesan

The expiry of cornerstone investors’ lock-up today modestly increases Mixue Group (2097 HK)’s free float, which still remains below 10%.
Mixue’s 1H2025 results show limited overseas scale-up, with growth driven entirely by the domestic market, raising concerns over long-term growth prospects from new markets.
At 22x forward earnings, Mixue trades at a premium to HK-listed F&B peers, reflecting market optimism for above-consensus growth.

Xiaomi (1810 HK): In 2Q25, Not Just Cars, But Fast Home Appliance

By Ming Lu

In 2Q25, total revenue grew strongly by 30% YoY and the operating margin continued to improve.
The market focuses on car deliveries, but IoT is the largest contributor to gross profits.
We believe the stock has an upside of 45% for the year end 2026. Buy.

BYD (1211 HK) Tactical Outlook: Maybe Soon Is Time to BUY…

By Nico Rosti

In our previous insight we correctly forecasted a short-lived, 2-3 weeks relief rally for BYD (1211 HK) , followed by a new downtrend (started this week).
The stock went into OVERSOLD territory according to our model, this week. It’s however a bit early to BUY, the stock could fall more.
If BYD reaches 102 next week, or the following week, that would be a very good place to BUY. A catalyst could bring the stock back to 140-150.

Simcere Pharmaceutical (2096 HK) Placement: Innovative Pipeline Enlightens Growth Prospects

Simcere Pharmaceutical Group (2096 HK) is placing 120M shares at the price of HK$12.95 per share. The placing shares represents ~5% of the current total issued shares of the company.
The company intends to apply 90% of the net proceeds for the R&D-related expenditures. For context, Simcere has over 60 R&D pipelines of innovative drugs.
Considering strong growth prospect of Simcere, reasonable valuation, and upbeat investor sentiment toward Chinese pharmaceutical sector, we are bullish on the placement.

Alibaba’s Logistics Arm CaiNiao Relegated To “Others” Status | Implications for Chinese Express?

Last week in its June quarter earnings release Alibaba “demoted” CaiNiao’s status
It’s become clear that boosting eComm logistics simply isn’t a priority for Alibaba
For firms that took investment from Alibaba & CaiNiao, implications are -Ive

Lucror Analytics – Morning Views Asia

By Leonard Law, CFA

In today’s Morning Views publication we comment on developments of the following high yield issuers: Seazen Group
The US market was closed for Labour Day yesterday.
Contracted sales for China’s Top 100 developers in August declined 18% y-o-y and 2% m-o-m to CNY 207 bn (albeit narrowing from -24% y-o-y in July), according to CRIC.

Pre-IPO GenFleet Therapeutics (PHIP Updates) – Some Points Worth the Attention

GenFleet’s R&D strategy is to layout around the RAS signaling pathway to construct a “RAS therapy matrix” covering multiple RAS mutation types.However, there’re barriers to the development of RAS-targeted therapies.
The factors that suppress valuation include intense competition and potential patent risks. GenFleet’s independent commercialization capability has not been verified. So, a valuation of RMB3-4 billion is a reasonable range.
Considering the sustained popularity of innovative drug IPOs in the Hong Kong stock market, post-IPO valuation of GenFleet depends more on market sentiment, not fundamentals.

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Sep 02

Daily Brief China: Shandong Gold Mining , Simcere Pharmaceutical Group, HKBN Ltd, BYD, Alibaba, Cambricon Technologies Lt, Remegen , Golden Throat Holdings, Huaxin Cement , Aux Electric and more

In today’s briefing:

Shandong Gold Mining Placement – H-Share Running Ahead of A-Shares
Simcere Pharma Placement – First Primary Raising, past Deals Have Been Mixed
HKBN (1310 HK): On the Cusp of Being Declared Unconditional
BYD (1211 HK): Flat Sales Volume in August and Lower Margin in 1H25
Cheap Vs. Rich Volatility: What Cones Reveal in Tencent, HSBC, Meituan & More
Quiddity STAR 50/100 Sep25 Results: 11/12 Expected ADDs/DELs Correct; Large Outflow for Cambricon
A/H Premium Tracker (To 29 Aug 2025): AH Premia Expand Again, Beautiful Skew Takes a Breather
Golden Throat (6896 HK): China’s Leading Lozenge Maker at 10x P/E and a 10% Dividend Yield
Huaxin Cement (6655 HK): Floats Non-Chinese Ops Spin-Off
Aux Electric IPO Trading: Decent Insti Demand; Is Cheap

Shandong Gold Mining Placement – H-Share Running Ahead of A-Shares

By Sumeet Singh

Shandong Gold Mining (1787 HK) aims to raise around US$500m via a primary placement, in order to pay down debt.
The H-shares are now trading at all-time highs and have been performing better than the A-shares this year.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

Simcere Pharma Placement – First Primary Raising, past Deals Have Been Mixed

By Sumeet Singh

Simcere Pharmaceutical Group (2096 HK) is looking to raise around US$200m via a top-up placement.
This is the first primary raising by the company since its listing. There have been a few secondary deals, with mixed results.
In this note, we talk about the deal dynamics and run the deal through our ECM framework.

HKBN (1310 HK): On the Cusp of Being Declared Unconditional

HKBN Ltd (1310 HK)’s offer from China Mobile (941 HK) is HK$5.075 with a 50% minimum acceptance condition. The first closing date is September 3.
Based on CCASS data, including acceptances, China Mobile’s shareholding was 48.93% of outstanding shares as of September 1.
Therefore, the offer should be declared unconditional by the first closing date. At the last close and for a September 12 payment, the gross/annualised spread is 0.5%/15.7%.

BYD (1211 HK): Flat Sales Volume in August and Lower Margin in 1H25

By Ming Lu

In August, BYD’s total sales volume was still flat and its domestic sales volume continued to shrink.
The operating margin declined significantly to 2.3% in 1H25 from 4.4% in 1H24.
The P/E band suggests a downside of 23% and a price target of HK$89.00.

Cheap Vs. Rich Volatility: What Cones Reveal in Tencent, HSBC, Meituan & More

Context: Volatility cones provide a clear framework to evaluate whether options are trading cheap or rich.
Highlights:Tencent (700 HK), HSBC (5 HK),Meituan (3690 HK), Ping An (2318 HK), and JD.com (9618 HK) all display historically cheap implied volatility. Read on for trade suggestions.
Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.

Quiddity STAR 50/100 Sep25 Results: 11/12 Expected ADDs/DELs Correct; Large Outflow for Cambricon

By Janaghan Jeyakumar, CFA

The September 2025 index review results for the STAR 50 and STAR 100 indices were announced after market close on Friday 29th August 2025.
There will be one change for the STAR 50 index and five changes for the STAR 100 index.
We expect one-way flows of approximately US$2.1bn and US$239mn for the STAR 50 and STAR 100 index rebal events respectively.

A/H Premium Tracker (To 29 Aug 2025): AH Premia Expand Again, Beautiful Skew Takes a Breather

By Travis Lundy

HUGE, rampaging, “Beautiful Skew”… is flat. Big swings in H/A ratios continue, this time on average with 2.1% H underperformance vs As which is -4.4% on average over two weeks.
Last week’s short reco on Fuyao Glass Industry Group (3606 HK) was up 2.3% on the week in Hs but Hs underperformed the As by 1.86%.
AH premia are in a widening phase. This may continue. New reco this week.

Golden Throat (6896 HK): China’s Leading Lozenge Maker at 10x P/E and a 10% Dividend Yield

By Michael Fritzell

Golden Throat (6896 HK — US$343 million) is an iconic Chinese brand of throat lozenges, used to deal with sore or dry throats.
The core product is similar to Strepsils, Halls, or Ricola, but is sold over-the-counter in pharmacies.
The company sells 146 million boxes per year and has an estimated market share of 26% in China.

Huaxin Cement (6655 HK): Floats Non-Chinese Ops Spin-Off

Two days after announcing its 2025 interims, Holcim (HOLN SW)-backed Huaxin Cement (6655 HK) proposed spinning off its overseas cement assets.
The overseas ops, predominantly located in Africa, significantly outperformed the PRC ops in FY24, a trend that continued into 2025.
No preferred bourse was stipulated, although the HKEx appears the logical choice. Pegged to historical trading metrics, Huaxin appears fully valued here.

Aux Electric IPO Trading: Decent Insti Demand; Is Cheap

By Nicholas Tan

Aux Electric (2580 HK) raised around US$532m in its Hong Kong IPO.
It is one of the global top five air conditioner providers.
We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

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Sep 01

Daily Brief China: Alibaba, Agricultural Bank Of China, Dongfeng Motor, SHEIN, Shanghai Fosun Pharmaceutical (Group), Sino Biopharmaceutical, SJM Holdings and more

In today’s briefing:

Alibaba (BABA, 9988HK): June Quarter, Actually 2-Digit Growth, To Win Price War
Curator’s Cut: Arbs Go A-H, Copper Plays & China’s Property Pulse
Alibaba (BABA US): Why Did the Stock Rally Despite 2Q25 Operating Profit Dip?
Merger Arb Mondays (01 Sep) – Dongfeng, ENN, Joy City, Kangji, Mayne, Santos, Shibaura, CareNet
(Mostly) Asia M&A, Aug 2025 Wrap: Dongfeng Motor, Kangji, Carenet, Nihon Chouzai, Technopro
SHEIN IPO Update: HQ Shifted (Back) To China | End of US De Minimis Exemption, Everywhere
Shanghai Fosun Pharmaceutical (2196.HK/600196.CH) 25H1 – The Performance Has Not Truly Improved
Sino Biopharmaceutical (1177 HK): Innovative Drugs Drive 1H Performance; Pipeline Lends Visibility
SJM Holdings – Earnings Flash – H1 FY 2025 Results – Lucror Analytics

Alibaba (BABA, 9988HK): June Quarter, Actually 2-Digit Growth, To Win Price War

By Ming Lu

The de facto total revenue increased by 10% YoY excluding two disposed shopping malls.
We believe Alibaba will win the price war for food deliveries, because competitors’ earnings were even worse.
The stock surged by 13% in NYSE after the result release, but we still believe it has an upside of 48% for next twelve months.

Curator’s Cut: Arbs Go A-H, Copper Plays & China’s Property Pulse

By Pranav Rao

Welcome to Curator’s Cut, a fortnightly roundup of standout themes from the 1,200+ Insights published over the past two weeks on Smartkarma
In this cut, we explore A-H share trading dynamics, consider copper market dynamics and plays, and China’s bottoming/stabilizing real estate market
Want to dig deeper? Comment or message with the themes you’d like to see highlighted next

Alibaba (BABA US): Why Did the Stock Rally Despite 2Q25 Operating Profit Dip?

By Devi Subhakesan

Alibaba (BABA US) jumped 12.9% on Friday following better than expected 2Q2025 results and upbeat management commentary.
Investors cheered growth plans centered around Consumption and AI + Cloud, signaling confidence in the company’s long-term strategy.
2Q2025 operating profits dipped slightly, as higher costs in quick commerce were largely offset by growth in other business segments.

Merger Arb Mondays (01 Sep) – Dongfeng, ENN, Joy City, Kangji, Mayne, Santos, Shibaura, CareNet

I 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: Mayne Pharma (MYX AU), Smart Share Global (EM US), ENN Energy (2688 HK), Dongfeng Motor (489 HK), Joy City Property (207 HK), Santos Ltd (STO AU).
Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Humm Group (HUM AU), Ashimori Industry (3526 JP), Carenet Inc (2150 JP), Ainsworth Game Technology (AGI AU).

(Mostly) Asia M&A, Aug 2025 Wrap: Dongfeng Motor, Kangji, Carenet, Nihon Chouzai, Technopro

For Aug 2025, 17 new transactions (firm and non-binding) were discussed on Smartkarma (by the Quiddity team) with an overall announced deal size of ~US$18bn.
The average premium for the new transactions announced (or first discussed) in August was 48%, with a year-to-date average of 47%.
The average premiums for transactions in 2024 (129 transactions), (2023 (117), 2022 (106), 2021 (165), 2020 (158), and 2019 (145 ) were 43%, 39%, 41%, 33%, 31%, and 31%

SHEIN IPO Update: HQ Shifted (Back) To China | End of US De Minimis Exemption, Everywhere

SHEIN is reportedly moving its corporate HQ to China to pave way for HK IPO
US ‘de minimis’ exemption for all countries ended Aug 29 (China/HK was May 2)
We believe end of US ‘de minimis’ exemption changed the game for SHEIN

Shanghai Fosun Pharmaceutical (2196.HK/600196.CH) 25H1 – The Performance Has Not Truly Improved

After excluding gains on the disposal of United Family Healthcare, profitability of main business was disappointing.The revenue decline confirms that Fosun Pharma is facing pressure. Short-term performance hasn’t truly improved.
Fosun Pharma will continue to sell unprofitable assets to alleviate debt pressure and optimize business structure, which will be the short-term main theme. Fosun Pharma is still in adjustment period
Whether high profit growth can be sustainable in long term is uncertain, which depends on if Henlius is able to achieve high growth to offset the negative impact of VBP.

Sino Biopharmaceutical (1177 HK): Innovative Drugs Drive 1H Performance; Pipeline Lends Visibility

Sino Biopharmaceutical (1177 HK) announced 11% YoY revenue growth in 1H25, driven by 27% YoY growth in innovative products. Contribution of innovative drugs to total revenue increased to 44.4%.
With the increasing contribution of innovative drugs to total revenue, gross profit margin expanded 40bps to 82.5%. With expanding margin and cost efficiency, net profit has more than doubled.
The company expects to have more than 35 marketed innovative products by 2027, with revenue from innovative products accounting for over 60% of total revenue.

SJM Holdings – Earnings Flash – H1 FY 2025 Results – Lucror Analytics

By Leonard Law, CFA

SJM Holding’s H1/25 results were weaker than anticipated, as the company lost GGR market share in Q2 (after a strong Q1).
The top line continued to expand, in line with the ramp-up of Grand Lisboa Palace (GLP).
That said, EBITDA unexpectedly contracted due to unfavourable win rates (particularly at GLP). FCF was likely negative, owing to the reduced profitability. Positively, the planned reorganisation of gaming assets will likely raise the properties’ margins and provide the company with operational flexibility to optimise its assets going forward.

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Aug 31

Daily Brief China: Tencent, Cambricon Technologies Lt, Zylox-Tonbridge Medical Technology, DiDi Global, Giant Network Group Co Ltd, ENN Energy, Dongfeng Motor, Legend Biotech Corp, NetEase and more

In today’s briefing:

Tencent’s Uzbekistan Bet: The Beginning Of “Digital Silk Road”?
STAR50/STAR100 Index Rebalance: Changes & Capping Lead to US$3.3bn Trade
China Healthcare Weekly (Aug.31) – P/R Ratio Is Meaningless, Innovent, Zylox-Tonbridge 25H1 Results
Didi Global Q225 Results | Domestic Business Strong | Why a 2025 Listing Still Makes Sense
Sticking With China; Bullish Outlook Intact. Buys in Consumer Discretionary, Materials, and Tech
Weekly Deals Digest (31 Aug) – ENN Energy, Shengjing, Ashimori, Carenet, Shibaura, Mayne, Aux
Last Week In Event SPACE: Dongfeng Motor, Shibaura, HD Hyundai Heavy/HD Hyundai Mipo, Zijin Mining
Legend Biotech’s 136% Sales Surge Signals Explosive CARVYKTI Momentum; How Long Will It Last?
NetEase: Can Its Latest AI Innovation Propel It Into the Next Era of Gaming Leadership?

Tencent’s Uzbekistan Bet: The Beginning Of “Digital Silk Road”?

By Alec Tseung

Tencent’s recent investment in Uzum marks the first investment by a Chinese tech giant in a local Central Asian startup, signaling a fundamental strategic pivot in the region.
Central Asia now presents potential markets for Chinese tech companies, beyond just infrastructure or commodity-focused opportunities, following the execution of the earlier phases of the Belt & Road Initiative.
Given Uzbekistan’s larger population and more diversified economy, it is generally seen as better fitted for tech companies’ growth, esp. B2C platforms, compared to Kazakhstan (a raw materials giant).

STAR50/STAR100 Index Rebalance: Changes & Capping Lead to US$3.3bn Trade

By Brian Freitas

There is 1 constituent change for the STAR50 INDEX and 5 changes for the STAR100 Index at the next rebalance that will be implemented at the close on 12 September.
We estimate one-way turnover of 6.1% for the SSE STAR50 (STAR50 INDEX) resulting in a round-trip trade of CNY 23.8bn (US$3.3bn).
There will be huge capping outflows for Cambricon Technologies Lt (688256 CH) following the massive rally in the stock over the last couple of months.

China Healthcare Weekly (Aug.31) – P/R Ratio Is Meaningless, Innovent, Zylox-Tonbridge 25H1 Results

We strongly disagree with the valuation method of “P/R”. which is calculated by dividing market value by R&D expenses. It is still necessary to view the valuation system rationally.
Innovent surprisingly turned loss into profits for the first time in 25H1. Considering the future contribution of mazdutide and IBI363, valuation of Innovent may reach above RMB200 billion.
The logic of Zylox is import substitution. Based on strong fundamentals, if liquidity remains strong, reasonable P/E is 40-45x. Target share price is HK$25-29/share based on 2025 net profit.

Didi Global Q225 Results | Domestic Business Strong | Why a 2025 Listing Still Makes Sense

Q225 saw solid growth & improving margins, driven by strength in China business
Lawsuit settlement hit net result in Q225, but investors shrugged off the news
We still think Didi could pursue a new listing later in 2025, probably in HK

Sticking With China; Bullish Outlook Intact. Buys in Consumer Discretionary, Materials, and Tech

By Joe Jasper

We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.
We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 6028-6059 and $119-$121.
We remain overweight/continue to have a major focus on China (Shanghai Composite). It continues to offer the most attractive opportunities, with a significant number of today’s recommendations coming from China.

Weekly Deals Digest (31 Aug) – ENN Energy, Shengjing, Ashimori, Carenet, Shibaura, Mayne, Aux

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: Aux Electric (2580 HK) prices at the top of the range, Tata Capital Limited (TATACAP IN) is seeking to raise US$2.0 billion.
Event-Driven developments: Ashimori Industry (3526 JP), Carenet Inc (2150 JP), Shibaura Electronics (6957 JP), Shengjing Bank Co Ltd H (2066 HK), Mayne Pharma (MYX AU).

Last Week In Event SPACE: Dongfeng Motor, Shibaura, HD Hyundai Heavy/HD Hyundai Mipo, Zijin Mining

Dongfeng Motor (489 HK) to be taken private via cash plus scrip into the backdoor listing of its EV arm.
Minebea extends its ¥6,200 TOB for Shibaura (6957 JP) to 11 September, a day after YAGEO’s ¥7,130 bid expires. Now there’s no game of chicken with Minebea. Just with METI.
The HD Hyundai Heavy Industries (329180 KS)/HD Hyundai Mipo (010620 KS) merger announcement reaffirms Seoul’s commitment to the MASGA project.

Legend Biotech’s 136% Sales Surge Signals Explosive CARVYKTI Momentum; How Long Will It Last?

Legend Biotech Corporation’s second quarter of 2025 was marked by significant milestones and notable financial and operational achievements, balanced by some ongoing challenges.
On the positive side, the company reported substantial growth in CARVYKTI sales, reaching $439 million, an increase of 136% year-over-year.
This robust growth underscores the rapid uptake of CARVYKTI, primarily driven by its expansion in second to fourthline settings for multiple myeloma treatments.

NetEase: Can Its Latest AI Innovation Propel It Into the Next Era of Gaming Leadership?

NetEase, Inc.’s second quarter financial results for 2025 illustrate a mixed yet promising outlook for the company.
The broad performance metrics highlight both robust areas of growth and certain challenges the company continues to face.
Key revenue drivers include the gaming and related value-added services (VAS) segment, which saw a 14% increase year-over-year, buoyed by solid returns from existing game franchises and successful new game launches like “Where Winds Meet” and “Marvel Rivals.” Notably, the company’s expertise in offering diverse gaming experiences and its strategic global expansion have positively influenced revenue growth.

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Aug 30

Daily Brief China: KE Holdings , Sichuan Yingfa Ruineng Technology, China Jinmao Holdings and more