China

In today’s briefing:

StubWorld: CKH (1 HK) – Expect Near-Term Weakness If Exclusivity Ends Without Resolution
Everest Medicine Placement – Third Deal in the Year, Previous Ones Didn’t Do Well
Meitu (1357 HK): AI-Driven Global Index Inclusion
OSL Group Placement: Momentum Is Strong but Is Opportunistic
Leads Biolabs (维立志生物) Trading Update
Aux Electric Co Ltd Pre-IPO Tearsheet
Dongfang Electric (1072 HK): Is There Any Room Left After the Rally?
Lucror Analytics – Morning Views Asia

StubWorld: CKH (1 HK) – Expect Near-Term Weakness If Exclusivity Ends Without Resolution

By David Blennerhassett

CK Hutchison Holdings (1 HK)‘s delicate dance continues as it juggles U.S and Beijing politics; and its fiduciary duty to shareholders, as the Blackrock exclusivity long stop date looms.
In a double dose of StubWorld this week, preceding my comments on CKH – and CK Infrastructure Holdings (1038 HK) – are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Everest Medicine Placement – Third Deal in the Year, Previous Ones Didn’t Do Well

Everest Medicines (1952 HK) aims to raise around US$200m via a top-up placement.
This will be the third placement this year for the stock, the previous two deals didn’t do well. Although the stock has bounced back a lot since.
In this note, we comment on the deal dynamics and run the deal through our ECM framework.

Meitu (1357 HK): AI-Driven Global Index Inclusion

Meitu Inc (1357 HK)‘s stock price has more than tripled over the last few months and the significantly higher market cap should lead to global index inclusion in August.
Shorts covered a lot in 2024 and that has continued this year as the stock price has moved higher.
Meitu Inc (1357 HK) has outperformed its peers significantly and there could be a pullback in the stock following index inclusion.

OSL Group Placement: Momentum Is Strong but Is Opportunistic

By Nicholas Tan

BC Technology Group (863 HK) is looking to raise around US$157m from a primary placement.
The deal is a large one to digest, representing 20.2 days of the stock’s three month ADV, and 11.3% of total shares outstanding.
In this note, we will talk about the placement and run the deal through our ECM framework.

Leads Biolabs (维立志生物) Trading Update

Leads Biolabs raised HKD 1290m (USD 166m) from its global offering and will list on the Hong Kong Stock Exchange on Friday, July 24th.
In our previous note, we looked at the company’s operation, management track records and discussed the IPO valuation.
In this note, we provide an update for the IPO before trading debut.

Aux Electric Co Ltd Pre-IPO Tearsheet

By Rosita Fernandes

Aux Electric Co Ltd (0917839D HK) (AECL) is looking to raise about US$100m in its upcoming Hong Kong IPO. The bookrunners for the deal are CICC and Oriental Securities.
AECL is engaged in the design, R&D, manufacturing, sales, and after-sales services of both household and central air conditioners, with operations spanning over 150 countries and regions.
According to F&S Report, AECL was among the top five global air conditioner providers by sales volume in 2024, with a market share of 7.1%.

Dongfang Electric (1072 HK): Is There Any Room Left After the Rally?

By Osbert Tang, CFA

Dongfang Electric (1072 HK)‘s recent rally following the Yarlung Zangbo hydropower project announcement appears overdone, as it now trades more than 3SD above average.
We estimate that, even with generous assumptions, the project will add 11.5% of revenue of its annual revenue. This seems unmatched with the 52.7% share price jump.
1Q25 has performed well and deserves a re-rating, but the current extent is excessive. Fair value for the next three years is HK$18-22.8, at best.

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: West China Cement, SK Hynix
US treasuries fell yesterday, with yields rising after three straight days of declines. That said, the sell-off in longer-dated treasuries moderated during the day, following strong demand for an auction of 20Y notes.
The UST curve bear-flattened, with the yield on the 2Y UST rising 5 bps to 3.88%, while the yield on the 10Y UST was up 4 bps at 4.38%.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Jul 24

Daily Brief China: Prosus NV, CK Hutchison Holdings, Cloud Village, Hang Seng Index, NetEase , JD.com Inc (ADR), Taste Gourmet, Gcl Poly Energy Holdings Limited, Beijing Sinotau International Pharmaceutical Technology, iShares MSCI China ETF and more

In today’s briefing:

Prosus Is Elevated Vs. Tencent As The Accretion Trade Unfolds
CK Hutchison (1 HK): State of Limbo as Exclusivity Deadline Approaches
Netease Cloud Music (9899 HK): Stock Up; Short Interest Up; Global Index Inclusion
HSI Index Tactical View: How Much Further Can the Rally Run?
Tencent/Netease: Zero Approval in July
[JD.com, Inc (JD US, SELL, TP US$24) TP Change]: C2Q25 Preview: Near Term Loss Pressure Imminent
Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – July 2025
GCL Tech (3800): Why Wait?
Sinotau (先通医药) Pre-IPO: A Niche Radiopharmaceutical Player
More Breakouts and Risk-On Developments; Monitoring Rotations: Miners, Retail, Lithium, China

Prosus Is Elevated Vs. Tencent As The Accretion Trade Unfolds

By David Blennerhassett

Since unwinding the Naspers (NPN SJ)/Prosus (PRX NA) circularity, Prosus has been selling Tencent shares, and buying back its share. Separately, Tencent is buying its shares to offset Prosus’ selling.
Prosus’ stake in Tencent has now edged below 23%, a little over seven months since dipping below 24%.
On an implied stub and relative value, Prosus is elevated to Tencent, suggesting an unwinding of the stub.

CK Hutchison (1 HK): State of Limbo as Exclusivity Deadline Approaches

By Arun George

The 145-day exclusivity period between CK Hutchison Holdings (1 HK) and the BlackRock-TiL consortium for the politically charged ports deal ends on July 27.
The transaction is in limbo as China’s preferred pathway for approval (COSCO is included in the consortium as an equal partner) has several issues.
It is equally probable that the deal will be finalised in some shape or form or fall apart. With shares up 31% and nearing a five-year high, take profits.

Netease Cloud Music (9899 HK): Stock Up; Short Interest Up; Global Index Inclusion

Cloud Village (9899 HK)‘s stock price has doubled over the last quarter and the increased market cap should lead to global index inclusion in August.
Short interest in Cloud Village (9899 HK) is at an all-time high and has increased in lockstep with the stock price.
Cloud Village (9899 HK) has outperformed Tencent Music Entertainment Group (1698 HK) and now trades at much higher valuations. A pair trade looks attractive here.

HSI Index Tactical View: How Much Further Can the Rally Run?

By Nico Rosti

The Hang Seng Index (HSI INDEX) has reached new highs (25538). Our quantitative model says the index has reached a 75% probability of reversal.
Let’s break down the model’s info: PRICE MODEL 75%, TIME MODEL 75%, combined prob. of reversal is 75%. The fact that both model’s factors are overbought is “bearish”.
Can the index climb higher? Our detailed analysis is in the insight below, together with screenshots from the model.

Tencent/Netease: Zero Approval in July

China announced game approval for the July batch. The number of games approved remained at a higher level than 2023.
The pace of China game approval appears to have accelerated to the same level as pre-tightening.
In July, 7 listed companies that we tracked received zero domestic game approval. Having said that, overall sentiment is improving and gaming names have performed well YTD.

[JD.com, Inc (JD US, SELL, TP US$24) TP Change]: C2Q25 Preview: Near Term Loss Pressure Imminent

By Ying Pan

We expect JD.com to report C2Q25 revenue/adjusted operating profit growth of 16%/(63%) YoY, which is 2%/(50%) vs. cons. due to the takeout subsidies.
Despite the surge in new users, we remain skeptical on the ST effectiveness of food delivery (FD) cross-selling. We expect 2025 FD losses at RMB29bn.
We keep JD as SELL and cut TP from US$25 to US$24.

Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – July 2025

By Sameer Taneja

We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
We add Asian Terminals (ATI PM) to our value conviction list. Read Asian Terminals Inc (ATI PM): Steady And Cheap Container Port Terminal Operator
Our top picks are Asian Terminals (ATI PM), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Philippine Stock Exchange (PSE PM), and Ginebra San Miguel (GSMI PM).

GCL Tech (3800): Why Wait?

By Henry Soediarko

Suffering from overcapacity for a while, the company is a beneficiary of the Chinese government policy to consolidate the solar industry.
At 0.6x PBR and a share price at HKD 1.3, far from its high at HKD 4, sounds like a bargain.
Management has conducted one share buy back this year and share price rallied afterwards.

Sinotau (先通医药) Pre-IPO: A Niche Radiopharmaceutical Player

Sinotau, a China-based clinical-stage biotech, is looking to raise at least USD 100 million via a Hong Kong listing. The book runner is CICC.
In this insight, we look at the company’s core products, XTR008, XTR006, XTR004, and XTR003, including its mechanism and clinical data.
We also look at the company’s pre-IPO investors and management team.

More Breakouts and Risk-On Developments; Monitoring Rotations: Miners, Retail, Lithium, China

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).
Short-Term supports on the SPX include the 20-day MA (currently 6233), 6200, 6100-6150, and 6028-6059, with additional supports at 5804-5854 and 5700-5785. Buy pullbacks to these areas.
SPX has not closed below its 20-day MA for two months, but even when it does, all we would expect to happen is for a new, less-steep uptrend to form.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Jul 23

Daily Brief China: WuXi XDC Cayman , Maxio Technology Hangzhou, Iron Ore, Chow Tai Fook Jewellery, Guangzhou Innogen Pharmaceutical Group, Road King Infrastructure, Shanghai MicroPort MedBot Group and more

In today’s briefing:

Wuxi XDC Cayman (2268 HK): Soaring Pharma Stocks & Global Index Inclusion
STAR Chip Index Rebalance Preview: Forecast Changes for September
[IO Fundamentals 2025/29] IO Recovery in Spotlight Amid China’s Infrastructure Drive
Chow Tai Fook(1929 HK) – What’s Clicking in Q1FY26? Brand Revamp, Cost Focus and SSS Recovery
Innogen (银诺医药) Pre-IPO Update: New Data Points
Lucror Analytics – Morning Views Asia
MicroPort MedBot (2252 HK): Growth Flash Amid Favorable Momentum with Approvals and Overseas Sales

Wuxi XDC Cayman (2268 HK): Soaring Pharma Stocks & Global Index Inclusion

WuXi XDC Cayman (2268 HK)‘s stock price has recovered from the tariff fear induced selloff and the higher market cap should result in global index inclusion in August.
WuXi XDC Cayman (2268 HK) has gone from bottom of the pack to middle over the last 9 months and there could be further relative upside.
There is positioning in the stock but it appears to be lower than positioning in its peers. Long/short trades could offer better risk/return.

STAR Chip Index Rebalance Preview: Forecast Changes for September

There could be 2 constituent change for the STAR Chip Index at the September rebalance. There will also be a few capping changes.
Estimated one-way turnover is 1.4% resulting in a round-trip trade of CNY 983m (US$137m). Passives need to trade between 0.4-1.9x ADV in the potential changes.
Both forecast inclusions are newly eligible for index inclusion and the passive buying could provide some support following the drop in the stock price post listing.

[IO Fundamentals 2025/29] IO Recovery in Spotlight Amid China’s Infrastructure Drive

By Umang Agrawal

China’s mega hydropower project signals stronger infrastructure-led steel demand, offering a lifeline to mills and boosting near-term iron ore demand and prices amid weak property activity.
Rio Tinto’s strong Q2 output boosts near-term iron ore momentum, but muted shipments, cyclone impact, and gradual Simandou ramp-up may limit upside in prices.
Portside iron ore inventory data showed mixed signals last week, with SMM reporting a sharp drop while CISA data reflected a slight increase.

Chow Tai Fook(1929 HK) – What’s Clicking in Q1FY26? Brand Revamp, Cost Focus and SSS Recovery

By Sreemant Dudhoria,CFA

Chow Tai Fook Jewellery (1929 HK) saw lowest degrowth in retail sales value(RSV) in Q1FY26 among last few quarters.
Same-Store sales growth showed a clear sequential improvement across key regions. Mainland China self-operated stores saw the decline narrow sharply.
Driven by store optimization and brand transformation, earnings quality should sustain. At 16.9x P/E valuation on FY26e EPS, we believe investors will increasingly view CTF as a long-term structural winner.

Innogen (银诺医药) Pre-IPO Update: New Data Points

Innogen, a China-based near-commercial stage biotech company, is looking to raise at least USD 100 million via a Hong Kong listing. CITIC Securities and CICC are the joint sponsors.
In this note, we look at changes to the company’s refiled application proof.
We also did a comparison between the company’s product and PegBio’s PB-119. PegBio was listed on HKEx in May. We also check its products’ online listing.

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: Road King Infrastructure, Continuum Green, Softbank Group
UST yields declined for a second straight day yesterday. There were no major macro catalysts, albeit the move was in line with gains across most European government bonds.
The UST curve bull flattened, with the yield on the 2Y UST falling 1 bp to 3.86%, while that on the 10Y UST was down 4 bps at 4.38%. Equities climbed to fresh record highs, with the S&P 500 advancing 0.1% to 6,306 and the Nasdaq up 0.4% at 20,974.

MicroPort MedBot (2252 HK): Growth Flash Amid Favorable Momentum with Approvals and Overseas Sales

Shanghai MicroPort MedBot Group (2252 HK) announced flash results for 1H25 where they expect the revenue to rise 70–80% YoY and net loss to narrow down to RMB 125M.
Toumai Laparoscopic Surgical Robot continued to be the main growth driver securing new orders of 18 units and achieving commercial installation of more than 13 units in overseas markets.
MedBot’s recent approvals of Toumai variants, technology advantages, and commercialization strength places it at an inflection point, expected to be back in the black soon.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Jul 22

Daily Brief China: Guangzhou Automobile Group, Meituan, Shengyi Electronics, 3SBio Inc, Shanghai Jin Jiang International Hotels, Immvira Bioscience and more

In today’s briefing:

A/H Premium Tracker (To 18 July 2025): “Beautiful Skew” Continues Some More
HK Connect SOUTHBOUND Flows (To 18 July 2025); Volumes Strong, Net Buying Decent, Meituan Hot
STAR50/STAR100 Index Rebalance Preview: Outright Changes & Migrations
3SBio (1530 HK): Global Index Inclusion as Stock Soars
Pre-IPO Shanghai Jin Jiang International Hotels – The Pain Points and the Outlook
ImmVira (亦诺微) Pre-IPO: Niche Product, but the Indication Is Limited

A/H Premium Tracker (To 18 July 2025): “Beautiful Skew” Continues Some More

By Travis Lundy

AH premia flat again among liquid names but “beautiful skew” of wide premia converging more than narrow premia continues bigly. It still pays well to be long wide H discounts.
Weeks ago I said, “It has paid to be long the H on those H/A pairs with the biggest H discounts. I would continue to ride that trend.” Ride on.
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.

HK Connect SOUTHBOUND Flows (To 18 July 2025); Volumes Strong, Net Buying Decent, Meituan Hot

By Travis Lundy

Gross SOUTHBOUND volumes again US$17+bn a day this past 5-day week. Net buying strong at +US$550mm a day. Meituan the top buy extending a very strong 12 week run.
Among the top buys as a percentage of volume, FINANCIALS stood out, dramatically. Again. INFO TECH negative again after two weeks of buying broke a three-month sell streak.
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.

STAR50/STAR100 Index Rebalance Preview: Outright Changes & Migrations

Nearing the end of the review period, we forecast 1 change for the SSE STAR50 (STAR50 INDEX) and 5 changes for the STAR100 Index in September.
We estimate turnover of 1% for the SSE STAR50 (STAR50 INDEX) and 3.6% for the STAR100 Index. The estimated round-trip trade is CNY 5bn (US$700m).
Near term performance for the SSE STAR50 (STAR50 INDEX) changes has been great, while the performance of the outright STAR100 Index changes has been far from satisfactory.

3SBio (1530 HK): Global Index Inclusion as Stock Soars

3SBio Inc (1530 HK)‘s stock price has soared over the last couple of months, and the higher market cap should result in global index inclusion in August.
3SBio Inc (1530 HK) has gone from middle/bottom of the pack to best performer among its peer group over the last two months.
There will be a lot of positioning in the stock, but we see a similar trend across stocks in the industry.

Pre-IPO Shanghai Jin Jiang International Hotels – The Pain Points and the Outlook

In 25Q1, Jin Jiang did not show a turning point in performance.There’s uncertainty about whether 2025 performance target can be achieved due to low efficiency of membership system/weak overseas business.
The growth of the core mid-to-low end economic market is weak.The transition to the high-end market or international expansion is difficult to shoulder the banner of growth in short term.
Valuation of Jin Jiang could be lower than Atour and H World Group, who have found new development paths and growth points.A relatively conservative valuation range is P/E of 15-18x.

ImmVira (亦诺微) Pre-IPO: Niche Product, but the Indication Is Limited

ImmVira, a China-based clinical-stage biotech, is looking to raise at least USD 100 million via a Hong Kong listing. The joint book runners are CITI and CICC.
In this insight, we look at the company’s core product, MVR-T3011, including its mechanism and clinical data.
We also look at the company’s pre-IPO investors and management team.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Jul 21

Daily Brief China: BYD, Pop Mart International Group L, Sichuan Kelun-Biotech Biopharm, Dickson Concepts Intl, ENN Energy, 52TOYS Development, Bright Smart Securities, Tencent and more

In today’s briefing:

Curator’s Cut: Japan Insurers Vs Banks, the State of the Chinese EV Sector and Asian Ports in Focus
Quiddity Leaderboard Hang Seng Index Sep25: BeOne, TME, and Pop Mart Among Our Top Picks
Sichuan Kelun Biotech (6990 HK): Price Surge & Global Index Inclusion
Dickson Concept (113 HK): More Minority Teeth Bared As Another Scheme Fails
Merger Arb Mondays (21 Jul) – ENN Energy, HEC Pharma, Shibaura, Abacus Storage, Insignia, Zeekr
Pre-IPO 52TOYS Development – The Business Model and the Concerns Behind
Bright Smart (1428 HK): Valuation Update
ECM Weekly (21 July 2025) – Muyuan, Unisplendour, NTT, Kasumigaseki, Anthem, Leads, SBI, Ascentage

Curator’s Cut: Japan Insurers Vs Banks, the State of the Chinese EV Sector and Asian Ports in Focus

By Pranav Rao

Welcome to Curator’s Cut, a fortnightly roundup of standout themes from the 1,000+ insights published in the past two weeks on Smartkarma
In this cut, we compare Japanese insurers versus banks, look at the Chinese EV sector and explore how tariff hikes benefit Asian port operators
Want to dig deeper? Comment or message with the themes you’d like to see highlighted next

Quiddity Leaderboard Hang Seng Index Sep25: BeOne, TME, and Pop Mart Among Our Top Picks

The Hang Seng Index is the main benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.
In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in September 2025.
The index changes are expected to be confirmed on 22nd August 2025.

Sichuan Kelun Biotech (6990 HK): Price Surge & Global Index Inclusion

The recent placement and price surge in Sichuan Kelun-Biotech Biopharm (6990 HK) could result in the stock being added to a global index in August.
Sichuan Kelun-Biotech Biopharm has outperformed its peers as the entire industry has been trading well. There is a small increase in short interest in the stock.
Positioning has increased steadily over the last month. Momentum in the stock and its peers could lead to further upside before profit taking kicks in.

Dickson Concept (113 HK): More Minority Teeth Bared As Another Scheme Fails

By David Blennerhassett

Three for three. Three low-balled Hong Kong Offers, by way of Schemes, have now lapsed over the past ten weeks.
Both Goldlion Holdings (533 HK) and Soundwill Holdings (878 HK) spectacularly failed back in May.
Now Dickson Concepts Intl (113 HK) has followed suit. But the vote was (much) closer than it should have been.

Merger Arb Mondays (21 Jul) – ENN Energy, HEC Pharma, Shibaura, Abacus Storage, Insignia, Zeekr

By Arun George

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), ENN Energy (2688 HK), Yichang HEC Changjiang Pharma (1558 HK), Insignia Financial (IFL AU), Santos Ltd (STO AU), Smart Share Global (EM US).
Lowest spreads: Bright Smart Securities (1428 HK), Humm Group (HUM AU), New World Resources (NWC AU), Hainan Meilan International Airport (357 HK), Avjennings Ltd (AVJ AU), ZEEKR (ZK US).

Pre-IPO 52TOYS Development – The Business Model and the Concerns Behind

For IP toy, the ability to provide a variety of categories is valuable,which means brands have access to diverse/creative designs/production based on IP characteristics, highlighting/interpreting the core of each IP.
Driven by top-tier licensed IPs, 52TOYS achieved solid growth, but its revenue scale/profit margin are inferior to peers. Due to intense competition, 52TOYS’s market share may be further squeezed.
The post-money valuation after Series C+ Financing is RMB4.27 billion. Based on the analysis, we think valuation of 52TOYS should be lower than Pop Mart (9992 HK), Bloks (325 HK).

Bright Smart (1428 HK): Valuation Update

By Osbert Tang, CFA

Bright Smart Securities (1428 HK) rallied by 132% since our last Insight, fueled by the euphoria in the brokerage and securities sector on the HK government’s stablecoin initiative.
At HK$16.44, it is at 100% PER premium to the sector average, ex-Guotai Junan International (1788 HK). The risk-reward payoff now looks less attractive.
It also implies net profit to grow by 150% by FY31F and priced at 18x PER. This appears stretched in the near term, though long-term prospects stay decent.

ECM Weekly (21 July 2025) – Muyuan, Unisplendour, NTT, Kasumigaseki, Anthem, Leads, SBI, Ascentage

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, filings and listings have cooled off going into the general summer lull.
On the placements front, State Bank Of India (SBIN IN) pulled the trigger on its long touted QIP.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Jul 20

Daily Brief China: Dickson Concepts Intl, The United Laboratories International Holdings Limited and more

In today’s briefing:

Dickson Concepts (113 HK): A Necessary HK Arbageddon
China Healthcare Weekly(July20)-WuXi AppTec 25H1, Sino Biopharm Acquire LaNova, United Lab Placement

Dickson Concepts (113 HK): A Necessary HK Arbageddon

By Arun George

Dickson Concepts Intl (113 HK) shareholders have voted against Sir Poon’s HK$7.20 per share offer. The vote marginally failed the <10% of all disinterested shareholders’ rejection threshold.
While painful, this deal break was arguably the correct outcome as the offer was below the net cash and Dickson is cash generative on an underlying basis.
Unlike the last HK deal break (Soundwill), the price action over the last two days indicated a done deal. My estimated break price is HK$5.00 (30% downside to last close).

China Healthcare Weekly(July20)-WuXi AppTec 25H1, Sino Biopharm Acquire LaNova, United Lab Placement

WuXi AppTec’s 25H1 Profit Alert indicates the whole year performance may beat expectations. However, “valuation discount” reflects geopolitical risks. The intensive share repurchases is insignificant compared with previous share reductions.
Sino Biopharm will pay US$500.9 million to acquire LaNova. Based on pipeline/licensing cooperation, this is a deal with very high cost performance. However, valuation contribution may remain to be seen.
United Lab plans to raise HK$2.17 billion in net proceeds from Placement. Valuation logic will shift from a traditional bulk medicine company to innovative drug company. 15x P/E is expected.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Jul 19

Daily Brief China: Iron Ore, Hang Seng Index, Longfor Properties and more

In today’s briefing:

[IO Technicals 2025/29] Near Term Bullish Trend to Persist
Hong Kong Single Stock Options Weekly (July 14 – 18): HSI at Fresh Highs But Option Volumes Lag
Lucror Analytics – Morning Views Asia

[IO Technicals 2025/29] Near Term Bullish Trend to Persist

By Umang Agrawal

Iron ore prices topped $100/ton as Beijing’s push on steel overcapacity and hopes of property support lifted sentiment, alongside tighter inventories fuelling restocking expectations.
Rio Tinto’s early Simandou shipments from November sparked fresh interest, though RBC sees output reaching just 12 million tons by 2026, ramping up slowly.
Prices are holding firm above key moving averages, pointing to continued upward momentum, while the MACD above its signal line reinforces the bullish trend.

Hong Kong Single Stock Options Weekly (July 14 – 18): HSI at Fresh Highs But Option Volumes Lag

By John Ley

HSI continued its rally, breaking out to the highest level since early 2022.
Breadth was solid and all sectors finished the week higher, led by standout moves in Health Care.
Call volumes were underwhelming given the breakout to new highs.

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: Longfor Group, Adani Ports, Adani Green Energy
UST yields were broadly stable yesterday. The yield on the 2Y UST rose 1 bp to 3.91%, while the yield on the 10Y UST was unchanged at 4.45%. Equities rallied, following the release of strong retail sales data. The S&P 500 rose 0.5% to a new high of 6,297, while the Nasdaq was up 0.7% at 20,886.
Several Fed officials spoke yesterday. New York Fed President John Williams said it is “entirely appropriate” to maintain the current modestly restrictive monetary policy stance, as he expects inflation to increase in the coming months. Atlanta Fed President Raphael Bostic also said that he still supports holding interest rates steady, stating that inflation may be at an “inflection point” after several months of soft price increases.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Jul 18

Daily Brief China: Consun Pharmaceutical, Nanjing Leads Biolabs, Geely Auto, Pop Mart International Group L, The United Laboratories International Holdings Limited, Netdragon Websoft, Ascentage Pharma Group Corp and more

In today’s briefing:

Quiddity Leaderboard Hang Seng Biotech Sep25: 20 Deletions Likely Due to Major Methodology Change
Leads Biolabs (维立志生物) IPO: A Duality Repeat?
Quiddity Leaderboard HSTECH Sep25: Final Expectations; ~US$1.6bn One-Way; Long Up 9% Vs Peers
Quiddity Leaderboard HSCEI Sep25: Final Expectations; One Index Change Possible
United Lab Placement – Industry Momentum Strong, Although Stock Has Run-Up Quite a Bit
Geely (175 HK): Deliveries Up by 42% YoY in June – Rapid Growth to Go On in 3Q25
Quiddity Leaderboard HSIII Sep25: Three Changes Likely; US$364mn One-Way Flows
Ascentage Pharma (6855 HK): Placement Priced Reasonably; Pipeline Leads to Niche Market Opportunity
Nanjing Leads Biolabs IPO: Lead Asset Targets Niche Market; Path to Success Still Long

Quiddity Leaderboard Hang Seng Biotech Sep25: 20 Deletions Likely Due to Major Methodology Change

The Hang Seng Biotech Index (HSHKBIO) will represent the 30 largest biotech companies listed in Hong Kong (HKEX) from September 2025.
Due to a methodology change for HSHKBIO announced in late-June 2025, 20 index constituents could face deletion in September 2025.
In this insight, we take a look at our final expectations for index changes and capping flows for HSHKBIO index rebal event in September 2025.

Leads Biolabs (维立志生物) IPO: A Duality Repeat?

Leads Biolabs, a China-based clinical-stage biotechnology company, launched its IPO to raise up to US$144m via a Hong Kong listing.
We look at the deal dynamics and compare the listing with the Duality listing.
The deal values the companies fairly but we see strong sentiment towards quality biotech names.

Quiddity Leaderboard HSTECH Sep25: Final Expectations; ~US$1.6bn One-Way; Long Up 9% Vs Peers

The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
In this insight, we take a look at our final expectations of index changes and the resultant capping flows for HSTECH index rebal event in September 2025.
We see one low-conviction ADD/DEL and one significant float percentage revision which could collectively trigger roughly US$1.6bn in one-way index flows in September 2025.

Quiddity Leaderboard HSCEI Sep25: Final Expectations; One Index Change Possible

The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
In this insight, we take a look at the potential index changes and capping flows for HSCEI index rebal event in September 2025.
We expect one ADD and one DEL for September 2025. We also estimate there to be US$269mn in one-way flows.

United Lab Placement – Industry Momentum Strong, Although Stock Has Run-Up Quite a Bit

By Akshat Shah

The United Laboratories International Holdings Limited (3933 HK) is looking to raise up to US$262m from a primary placement.
The company intends to use about 60% of the proceeds to build production capacity and expand its international business, with the rest to be used for R&D purposes.
In this note, we will talk about the placement and run the deal through our ECM framework.

Geely (175 HK): Deliveries Up by 42% YoY in June – Rapid Growth to Go On in 3Q25

By Ming Lu

Geely announced that its deliveries grew by 42% YoY in June 2025.
We expect BEV deliveries will continue to grow fast in 3Q25, but slow down from 4Q25.
We believe the stock price will rise by 39% for the next twelve months.

Quiddity Leaderboard HSIII Sep25: Three Changes Likely; US$364mn One-Way Flows

The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
In this insight, we take a look at the final rankings of potential ADDs and potential DELs for the September 2025 index rebal event.
We see three ADDs/DELs and one float percentage revision which could collectively trigger roughly US$364mn in one-way index flows in September 2025.

Ascentage Pharma (6855 HK): Placement Priced Reasonably; Pipeline Leads to Niche Market Opportunity

Ascentage Pharma Group Corp (6855 HK) announced the placement of 22M shares for subscription at HK$68.6 per share, representing 8% discount to last trading price before announcement.
The company intends to use the net proceeds for commercialization efforts, global clinical development to advance the core pipeline candidates and for infrastructure and working capital to strengthen global operations.
The launch of lisaftoclax in China followed by eventual approval olverembatinib in US would be the near-term triggers for the company.

Nanjing Leads Biolabs IPO: Lead Asset Targets Niche Market; Path to Success Still Long

Nanjing Leads Biolabs has launched HK$1.1B IPO to fund its ongoing and planned clinical development and regulatory affairs of pipeline assets. The company has fetched cornerstone investment of ~HK$ 542M.
Lead product candidate, LBL-024 is being evaluated for extra-pulmonary neuroendocrine carcinoma. Leads Biolabs expects to file the first BLA for LBL-024 by 3Q26 and anticipate obtaining conditional approval by 2Q27.
Positive investor sentiment toward Chinese biotech companies and near-term catalyst being Phase 3 data readout for LBL-024 in early 2026 are the main reasons to subscribe.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Jul 17

Daily Brief China: Dream International, Alibaba Group Holding , Guangzhou Xiao Noodles Catering Management, Sino Biopharmaceutical, Unisplendour Guhan Group A and more

In today’s briefing:

Dream International (1126 HK): Riding the Popmart Bubble
Asian Buybacks Accelerating; Consistent Share Repurchasers Offer Safety
Pre-IPO Guangzhou Xiao Noodles Catering Management – Pain Points in Operation Mode and Profit Margin
Sino Biopharmaceutical (1177 HK): Acquisition To Enrich Pipeline and Enhance International Influence
Unisplendour Corp A/H Listing – Growth Slowing, Margins Dropping

Dream International (1126 HK): Riding the Popmart Bubble

By Sameer Taneja

We believe that toymakers are experiencing a bubble like rally led by Pop Mart International Group L (9992 HK) and Hasbro Inc (HAS US) which raised forecasts recently.
Dream International (1126 HK) has returned >200% since liberation day tariffs were declared on April 2nd 2025 and now trades at 12.7x trailing earnings (vs 3.7x when we initiated).
“Never look a gift horse in the mouth” ! .We would take some money off the table here as toy stocks go through periods of cyclicality due restocking/destocking.

Asian Buybacks Accelerating; Consistent Share Repurchasers Offer Safety

By Manishi Raychaudhuri

Asian buybacks, dominated by HK, China and Korea, are skyrocketing. In H125, buybacks more than doubled from their full year 2024 levels in HK/China and increased 40% in Korea.
We screen companies repurchasing consistently, with total buyback of minimum $1bn and buyback over 2024-25 of at least 2% of present market cap, yielding companies in HK(11), Korea(6), Philippines(2), Singapore(1).
Top five repurchasers are Alibaba, Tencent, China Communication Construction, AIA, Netease. These, barring the third, are up more than 20% this year. Share price support from buybacks do seem solid.

Pre-IPO Guangzhou Xiao Noodles Catering Management – Pain Points in Operation Mode and Profit Margin

Although the revenue is growing, net profit margin is low, which is due to Xiao Noodles’ operational model, high costs, products and brand positioning. Key performance indicators declined in 2024.
If competition becomes increasingly fierce and Xiao Noodles’ price reduction strategy continues, the investment return period would be longer, which will affect the Company’s future expansion plans and performance growth.
Based on our forecast, pre-IPO valuation of RMB3 billion is expensive. If Xiao Noodles is unable to reverse the trend of declining performance, it will face valuation discounts after IPO.

Sino Biopharmaceutical (1177 HK): Acquisition To Enrich Pipeline and Enhance International Influence

Sino Biopharmaceutical (1177 HK) is acquiring the balance 95% equity interests in LaNova Medicines for net consideration of $500M to be funded by internal resources and bank borrowings.
With focus on oncology and differentiated capability spanning monoclonal antibodies, bispecific antibody, and ADC drug, LaNova is a strategic fit for Sino Biopharma.
The acquisition will enhance Sino Biopharma’s reputation and image in the global pharmaceutical industry, and promote the conclusion of potential international transactions in the future.

Unisplendour Corp A/H Listing – Growth Slowing, Margins Dropping

Unisplendour Corporation Limited (000938 CH), an ICT infrastructure products provider, aims to raise around US$1bn in its H-share listing.
UC designs and sells a diverse portfolio of ICT infrastructure products, covering the entire digital solutions industry chain.
In this note, we look at its past performance and other deal dynamics that might impact the listing.

💡 Before it’s here, it’s on Smartkarma

The Smartkarma Preview Pass is your entry to the Independent Investment Research Network

✓ Unlimited Research Summaries
✓ Personalised Alerts
✓ Custom Watchlists
✓ Company Data and News
✓ Events & Webinars

Jul 16

Daily Brief China: JNBY Design Ltd, Jiangsu Jiejie Microelectronic, Qi An Xin Technology Group , Champion REIT, China Molybdenum Co Ltd H, Ascentage Pharma Group Corp, Muyuan Foodstuff Co Ltd A and more

In today’s briefing:

HK-Listed Apparel & Footwear Screener July 2025: August 1st Deadline Approaches
Quiddity Leaderboard ChiNext & ChiNext 50 Dec25: One Change to Expectations; US$636mn Total One-Way
Quiddity Leaderboard STAR 50/100 Sep25: Reference Period Almost Complete; New Pair Trade Ideas
Hong Kong Office Market: Persistent Vacancy and Rental Pressure – SHORT Champion REIT 2778 HK
CMOC Group Ltd (SEHK: 3993 | SSE: 603993) – H1 Guidance Points to Strong Upside
Ascentage Pharma (6855.HK) Placement – Thoughts on The Placing Price and the Outlook
Muyuan Foods A/H Listing – Long Term Growth with Short-Term Volatility

HK-Listed Apparel & Footwear Screener July 2025: August 1st Deadline Approaches

By Sameer Taneja

The August 1st deadline is approaching, and it seems a bit unclear whether a deal with Vietnam has been reached on a 20% tariff or something lower.
With no formal agreement and just Trump’s Truth Social account as a reference, uncertainty looms. For HK-listed companies, the understanding is that they will pass on tariffs to their customers.
We summarize this in our call with Nameson Holdings (1982 HK) following the results. We also provide updates for Pacific Textiles (1382 HK) and other names.

Quiddity Leaderboard ChiNext & ChiNext 50 Dec25: One Change to Expectations; US$636mn Total One-Way

The ChiNext index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
We see 3 changes for the ChiNext index and 5 changes for the ChiNext 50 index in the next index rebal event worth a combined US$600mm+ one-way.

Quiddity Leaderboard STAR 50/100 Sep25: Reference Period Almost Complete; New Pair Trade Ideas

STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
In this insight, we take a look at the potential ADDs/DELs for the STAR 50 and STAR 100 indices for the September 2025 index rebal event.

Hong Kong Office Market: Persistent Vacancy and Rental Pressure – SHORT Champion REIT 2778 HK

By Jacob Cheng

The Hong Kong office market is now facing multiple headwinds including an oversupply, persistently weak demand and slowdown in Chinese corporates expansion
Accordingly, the availability rate In Hong Kong office rose to record high, reaching 19.3% as of Q2 2025, according to Cushman. Vacancy rate in Central is at 13%
We are bearish on Champion REIT, given its direct exposure to HK Grade A office market

CMOC Group Ltd (SEHK: 3993 | SSE: 603993) – H1 Guidance Points to Strong Upside

By Rahul Jain

CMOC’s H1 2025 midpoint guidance signals a ~60% YoY surge in net profit, supported by higher copper and cobalt output and pricing.
With H1 tracking >50% of full-year profit, FY2025 earnings could be revised 10–18% higher from internal estimates, with EPS approaching RMB 0.85.
Despite strong delivery, CMOC trades at ~10x forward earnings and ~4.5x EV/EBITDA; a rerating may depend on easing DRC constraints and sustained price tailwinds.

Ascentage Pharma (6855.HK) Placement – Thoughts on The Placing Price and the Outlook

Our forecast is sales of olverembatinib in 2025 could reach RMB500mn. APG-2575 is better than Sonrotoclax in ORR/safety profile, but global commercialization success is not simply determined by clinical data.
Placing price of HK$68.6/share has priced in the successful licensing deal of APG-2575 to some extent, which however is not a done deal. US$1.5-2.375bn is a more reasonable valuation range.
The big rally in biotech sector is not based on fundamental inflection point. The driving mentality behind the valuation bubble this time has a more obvious nature of “short-term gambling”.

Muyuan Foods A/H Listing – Long Term Growth with Short-Term Volatility