China

In today’s briefing:

MV Global Uranium & Nuclear Energy/Infra Index Rebalance: Double Inclusion for CGN Mining
MV Global Junior Gold Miners Index Rebalance: Stocks at Their Highs
Pop Mart (9992 HK): Beyond Blind Boxes -Jewellery Debut. Stock Up 200% YTD. Is It Still a Buy?
Chow Tai Fook(1929 HK) – Firing on All Cylinders, Strong Outlook For FY26
HKEX (388 HK) Options: Unpacking the Top Trades of the Week
CaoCao IPO: The Bear Case
Shanghai Junshi Bioscience (1877 HK): Placement Good, A Long Term Bet for Sure
Pre-IPO Bayzed Health Group (PHIP Updates) – Some Points Worth the Attention

MV Global Uranium & Nuclear Energy/Infra Index Rebalance: Double Inclusion for CGN Mining

There is 1 add/delete for each of the MVIS Global Uranium & Nuclear Energy Index and the MarketVector Global Uranium and Nuclear Energy Infrastructure Index.
Cgn Mining (1164 HK) is an add to both indices. Endesa SA is a delete from the Uranium&Nuclear Energy Index, Encore Energy is a delete from the Uranium&Nuclear Energy Infrastructure Index.
The net round-trip trade across both indices is US$560m with capping changes resulting in much bigger flow for the MVIS Global Uranium & Nuclear Energy Index.

MV Global Junior Gold Miners Index Rebalance: Stocks at Their Highs

There are no constituent changes for the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in June but there are plenty of float and capping changes.
Estimated one-way turnover is 4.1% resulting in a round-trip trade of US$528m. There are 5 stocks with over 1x ADV to trade from passive trackers.
The sell flows in Evolution Mining (EVN AU) will partially offset the buying from the passive S&P/ASX 50 Index trackers.

Pop Mart (9992 HK): Beyond Blind Boxes -Jewellery Debut. Stock Up 200% YTD. Is It Still a Buy?

By Devi Subhakesan

Pop Mart International Group (9992 HK) opened its first dedicated jewellery concept store, POPOP, in Shanghai last Friday, featuring accessories based on its best-selling characters like Labubu, Molly, and Skullpanda.
The jewellery line represents a natural, high-return extension of Pop Mart’s brand. If scaled successfully, it could support overall revenue growth, enhance group margins, and contribute to higher returns.
Expect high margin, high return casual jewellery business to support growth and uplift margins going forward and lead to analyst upgrades to future revenues/earnings.

Chow Tai Fook(1929 HK) – Firing on All Cylinders, Strong Outlook For FY26

By Sreemant Dudhoria,CFA

Resilient FY25 Margins: Despite a 17.5% revenue drop, Chow Tai Fook Jewellery (1929 HK) expanded operating margins by 400bps through cost control and premium product mix.
Brand-Led Recovery in FY26: Signature launches, digital sales, and store optimization to drive Same Store Sales Growth (SSSG) recovery and sustain high operating leverage.
Valuation Supported by Fundamentals: Valuation at 20.8x P/E (TTM) valuation justified by strong ROE (>20%), margin leadership, and stable dividend payout (~88%) versus regional jewellery peers.

HKEX (388 HK) Options: Unpacking the Top Trades of the Week

Be inspired by sophisticated, live, multi-leg options strategies on HKEX (388 HK), executed over the period from 9 to 13 June.
Highlights: Discover a range of noteworthy strategies, for example a self-financing Diagonal Put Spread using weekly options, or a Diagonal Call Spread generating 3.9% upfront yield.
Why read: This breakdown of complex option strategies sheds light on market sentiment and positioning. Detailed examples provide actionable insights that could inspire similar strategies,

CaoCao IPO: The Bear Case

CaoCao Inc (1646553D CH) is the second-largest ride-hailing player in China. It has filed its PHIP to raise US$200-300 million.
In CaoCao 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 low net take rates, unfavourable trends of key cost items, expected losses in the current year and a stretched balance sheet.

Shanghai Junshi Bioscience (1877 HK): Placement Good, A Long Term Bet for Sure

By Tina Banerjee

Shanghai Junshi Biosciences (1877 HK) is placing 41M H shares for subscription at HK$25.35 per H Share.
Shanghai Junshi intends to use 70% of the net proceeds from the placement for innovative drug development and balance 30% for general corporate purposes such as replenishment of working capital.
Early green shoots in the form of lower R&D expenses and narrowing losses. Junshi offers for a good long-term bet as the company turning profitable will take some time.

Pre-IPO Bayzed Health Group (PHIP Updates) – Some Points Worth the Attention

The positioning of Bayzed is just “a supplement to public hospitals system”, with limited scale and competitiveness, which is a point that investors may need to be aware of.
A big problem in the operation of Bayzed is the loss status/weak profitability. At current gross margin level, it would be difficult for Bayzed to deliver good returns for investors.
Valuation of Bayzed should be lower than Inkon Life Technology and Hygeia. The Pre-IPO valuation is not cheap, and the valuation upside potential may be limited considering weak profitability.

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Jun 15

Daily Brief China: Guangzhou Automobile Group, Great Wall Motor, Foshan Haitian Flavouring & Food Company, Wuxi Biologics, Baidu, Alibaba Group Holding , iQIYI Inc, Cgn Mining, JD.com and more

In today’s briefing:

A/H Premium Tracker (To 13 June 2025): HUGE H-Share Outperf Across The Board, “Beautiful Skew Move”
HK Connect SOUTHBOUND Flows (To 13 June 2025); Volumes Up, TECH Down, HEALTHCARE Bought Big
Weekly Deals Digest (15 Jun) – Haitian, Sanhua, Toyota Industries, Tryt, Fengxiang, HKBN, Mayne
China Healthcare Weekly (Jun.15) – Outlook of GLP-1 Market, WuXi Bio’s Placement, Keymed’s Placement
Baidu Inc.: Dealing With The Uncertain Commercial Viability of Autonomous Driving
Alibaba’s Bold AI & Cloud Bet Is Driving Our Optimism–But It Comes at A BIG COST!
iQIYI Inc.: Growing Its Content Ecosystem & Executing Overseas Market Expansion to Help Alter The Playing Field?
[Quiddity Index] MV Global Uranium & Nuclear Energy Jun25 Rebalance Results: Flow Expectations
JD.com: AI Expansion into On-Demand Retail & Food Delivery Is An Interesting New Development!

A/H Premium Tracker (To 13 June 2025): HUGE H-Share Outperf Across The Board, “Beautiful Skew Move”

AH spreads are SHARPLY narrower. The effect is dramatic across the “skew” i.e. very wide AH premia contracted more than very narrow premia. BYD is on its own.
This smells very much like someone knows something. I expect RMB dual counters may be in the works. Caixin had an article Friday.
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 13 June 2025); Volumes Up, TECH Down, HEALTHCARE Bought Big

Gross SOUTHBOUND volumes up to US$15+bn a day this past 5-day week. Net buying still positive but still below US$500mm/day.
Among the top buys as a percentage of volume, HEALTHCARE, FINANCIALS, ENERGY stand out, dramatically. Among top sells, INFO TECH again. 9 weeks in a row negative. Tencent bigly sold.
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.

Weekly Deals Digest (15 Jun) – Haitian, Sanhua, Toyota Industries, Tryt, Fengxiang, HKBN, Mayne

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: Foshan Haitian Flavouring & Food Company (3288 HK) and Zhejiang Sanhua Intelligent Controls (2050 HK) H share listings and CaoCao Inc (1646553D CH) IPO.
Event-Driven developments: Toyota Industries (6201 JP), TRYT (9164 JP), With Us Corp (9696 JP), Shandong Fengxiang (9977 HK), HKBN Ltd (1310 HK), Mayne Pharma (MYX AU).

China Healthcare Weekly (Jun.15) – Outlook of GLP-1 Market, WuXi Bio’s Placement, Keymed’s Placement

The GLP-1 market has officially transitioned from a duopoly to a state where Tirzepatide is eating away at Semaglutide’s market share, which should be a highly valued advance signal.
WuXi Bio’s Placing price of HK$26.51-26.88/share is expansive if based on 2025 forecast.Obviously, WuXi Bio hopes to leverage the positive market sentiment to complete the placement at high share price
Keymed plans to raise about HK$854million through a top-up placement. However, reasonable valuation for Keymed is RMB5-10 billion. In other words, the Placing Price of HK$45.48 per Share is expensive.

Baidu Inc.: Dealing With The Uncertain Commercial Viability of Autonomous Driving

Baidu, Inc. delivered a solid performance in the first quarter of 2025, with its Baidu Core division reporting a 7% year-over-year revenue increase, reaching RMB 25.5 billion.
This growth was primarily driven by a substantial surge in its AI cloud business, which saw a 42% increase year-over-year, contributing significantly to Baidu Core’s overall revenue.
A notable development within this business unit is the expansion of the AI cloud’s role in Baidu’s operations, now accounting for 26% of Baidu Core’s revenue, up from 20% in the previous year.

Alibaba’s Bold AI & Cloud Bet Is Driving Our Optimism–But It Comes at A BIG COST!

Alibaba Group delivered a mixed performance in the March quarter and for the full fiscal year 2025, showing resilience in its core operations while falling short of analyst expectations on key financial metrics.
The company reported revenue of $32.58 billion for the quarter, marking a 7% year-over-year increase, but this fell below projections of $33.28 billion.
Net income for the period came in at $1.71 billion, significantly lower than the anticipated $2.93 billion.

iQIYI Inc.: Growing Its Content Ecosystem & Executing Overseas Market Expansion to Help Alter The Playing Field?

iQIYI’s first-quarter 2025 results exhibited growth across several key business segments, though certain challenges remain.
The company experienced sequential growth in total revenues, largely attributed to their emphasis on premium content production and strong performance in long-form and micro-dramas.
This focus has effectively positioned iQIYI as a leading platform for both long-form and short-form entertainment content, contributing positively to user engagement and content consumption.

[Quiddity Index] MV Global Uranium & Nuclear Energy Jun25 Rebalance Results: Flow Expectations

The MV Global Uranium & Nuclear Energy index represents the performance of the biggest and the most liquid companies in the Uranium and Nuclear industries.
Cgn Mining (1164 HK) will be an ADD and Endesa SA (ELE SM) will be a DELETE in June 2025.
There are also some big capping flows so we expect a one-way flow of US$227mn for June 2025, which translates to a turnover of 15.7%.

JD.com: AI Expansion into On-Demand Retail & Food Delivery Is An Interesting New Development!

In the first quarter of 2025, JD.com reported strong financial and operational performance, indicating a positive start to the year.
The company’s total revenues increased by 16% year-over-year, showing accelerated growth compared to the previous quarter.
This growth was broad-based, with electronics and home appliances revenue up by 17% and general merchandise revenue rising by 15%, demonstrating the strength of JD.com’s diversified product range and supply chain capabilities.

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Jun 14

Daily Brief China: Zhejiang Sanhua Intellignt Controls, Wuxi Biologics, Zhejiang Sanhua Intelligent Controls, Shandong Gold Mining Co., Ltd, Bloks Group, Iron Ore, SGX Rubber Future TSR20, Ping An Insurance (H), Seazen (Formerly Future Land) and more

In today’s briefing:

Zhejiang Sanhua Intelligent Controls A/H Listing – Relatively Large but Digestible
Wuxi Biologics Placement – Smaller Deal than Previous as Last Didn’t Do Well, Overhang Remain
Sanhua Intelligent Controls H Share Listing (2050 HK): Valuation Insights
Shandong Gold Mining Co., Ltd. (600547.SS, 1787.HK) – Scaling Production and Enhancing Margins
Bloks Group (0325.HK): Six-Month IPO Lock-Up Will Expire In July, Time To Take Profits
[IO Technicals 2025/24] Downward Momentum Lingers
EU Opens Tire Duty Probe Against China, Straining Trade Environs
Ping An (2318 HK): Strategic Insights and Top Option Trades
Lucror Analytics – Morning Views Asia

Zhejiang Sanhua Intelligent Controls A/H Listing – Relatively Large but Digestible

Zhejiang Sanhua Intellignt Controls Co., Ltd. (002050 CH) (ZSIC), a manufacturer of refrigeration and air-conditioning control components, aims to raise around US$1bn in its H-share listing.
ZSIC is a market leader in a number of products, with commanding market share both domestically and globally.
We have looked at the past performance and likely A/H premium in our previous note. In this note, we talk about the IPO pricing.

Wuxi Biologics Placement – Smaller Deal than Previous as Last Didn’t Do Well, Overhang Remain

Wuxi Biologics Holdings is looking to raise up to US$288m by selling about 2% of Wuxi Biologics (2269 HK).
This is the company’s 17th placement since it listed in June 2017.
In this note, we talk about the updates since then and run the deal through our ECM Framework.

Sanhua Intelligent Controls H Share Listing (2050 HK): Valuation Insights

Zhejiang Sanhua Intelligent Controls (2050 HK) has launched its H Share listing at HK$21.21 to HK$22.53 per H Share. Pricing will be on 19 June.
I discussed the H Share listing in Sanhua Intelligent Controls H Share Listing: The Investment Case.
The proposed AH discount of 20.2%-24.9% (based on 12 June A Share price) is attractive and I would participate in the H Share listing.

Shandong Gold Mining Co., Ltd. (600547.SS, 1787.HK) – Scaling Production and Enhancing Margins

By Rahul Jain

EBITDA margin is expected to expand to 19% by FY27, with EPS rising from CNY 0.51 to CNY 1.10, supported by operational efficiencies and a favorable gold price environment.
Shandong Gold aims for 70–80 tonnes of self-mined gold by 2027, with FY25–FY27 revenue projected to reach CNY118.8 billion at $3,400/oz gold price, driven by volume growth & higher prices.
Commodity price volatility, geopolitical risks in international ventures (Argentina, Greece), and state ownership influence pose challenges to margins and shareholder value.

Bloks Group (0325.HK): Six-Month IPO Lock-Up Will Expire In July, Time To Take Profits

By Andrei Zakharov

Bloks Group is one of the top performing stocks in Hong Kong this year, with shares up 186% over the year versus a ~19% gain on the HSI.
Chinese assembly character toy maker priced its offering at HK$60.35 per share in January, top of a range, and raised ~HK$1.8B of the net proceeds.
The offering was 5,000+ times oversubscribed and Bloks Group IPO attracted a surge of retail investors. The company’s six-month IPO lockup will expire on July 9, 2025.

[IO Technicals 2025/24] Downward Momentum Lingers

By Umang Agrawal

The U.S. will impose a 55% tariff on Chinese goods; China responds with 10%, as part of a deal addressing trade and fentanyl concerns.
China’s steelmakers face pressure as EV price wars cut margins. Platts to lower iron ore spec to 61% in 2026, prompting SGX contract adjustments.
Prices hold below key moving averages, reflecting downside momentum, while the MACD staying under its signal line supports the ongoing bearish outlook.

EU Opens Tire Duty Probe Against China, Straining Trade Environs

By Vinod Nedumudy

Investigation covers HS codes 40111000 and 40112010
China criticizes EU protectionism, warns of market impact
EU tire makers to benefit but consumers may feel the pinch

Ping An (2318 HK): Strategic Insights and Top Option Trades

Be inspired by sophisticated, live, multi-leg options strategies on Ping An Insurance (2318 HK), executed over the period from 6 to 12 June on the Hong Kong exchange.
Highlights: Many strategies creatively utilize weekly expiries, sometimes employing options with as little as one or two days to maturity to generate upfront yield or financing.
Why read: Detailed examples and break-down of complex option strategies provide actionable insights that could inspire similar strategies,

Lucror Analytics – Morning Views Asia

By Leonard Law, CFA

US treasuries climbed yesterday, on the back of soft PPI data as well as a solid auction of 30Y notes.
The UST curve bull flattened, with the yield on the 2Y UST declining 4 bps to 3.91%, while that on the 10Y UST was down 6 bps at 4.36%.
Equities rose, with the S&P 500 and Nasdaq up 0.4% and 0.2%, respectively.

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Jun 13

Daily Brief China: Zijin Mining Group Co Ltd H, Consun Pharmaceutical, Geely Auto, Zhejiang Sanhua Intellignt Controls Co., Ltd., Everest Medicines, Netdragon Websoft, CaoCao Inc, Chow Tai Fook Jewellery, Eternal Beauty Holdings Limited, Shandong Fengxiang and more

In today’s briefing:

Zijin Mining (2899 HK): Fully Valued Ahead Of (Expected) Gold Unit Spin-Off
Quiddity Leaderboard Hang Seng Biotech Sep25: Three Changes Likely + One Intra-Review Change
Quiddity Leaderboard HSTECH Sep25: 1 Low-Conviction Change + 1 FAF Revision; US$1.3bn One-Way
Zhejiang Sanhua Intelligent Controls (2050 HK): Big Raise Supported by Cornerstones
Everest Medicine Placement: Another Sell-Down by CBC, Some Caution Warranted
Quiddity Leaderboard HSIII Sep25: Some Changes to Expectations; Trade Idea Successful
CaoCao IPO: The Bull Case
Chow Tai Fook (1929 HK): A Decent Rebound
Eternal Beauty Pre-IPO – PHIP Updates – Perfumes Growing, Challenges Remain
Fengxiang (9977 HK): PAG Invites Dissent After Scrapping Scrip Alternative

Zijin Mining (2899 HK): Fully Valued Ahead Of (Expected) Gold Unit Spin-Off

Back on the 30th April 2025, Zijin Mining (2899 HK) said it planned to spin off its overseas gold mine assets on the Hong Kong exchange.
The newly created unit, Zijin Gold International, owns/operates mines in South America, Central Asia, Africa and Oceania, including the Buritica project in Colombia, the nation’s largest gold mine.
A Circular is now out concerning the spin-off, which is not subject to shareholder approval. Pegged to peers, Zijin appears fully valued.

Quiddity Leaderboard Hang Seng Biotech Sep25: Three Changes Likely + One Intra-Review Change

The Hang Seng Biotech index (HSHKBIO) represents the 50 largest biotech companies listed in Hong Kong (HKEX).
In this insight, we take a look at the potential index changes and the resultant capping flows for the HSHKBIO index rebal event in September 2025.
Based on the latest data, we see three ADDs and three DELs.

Quiddity Leaderboard HSTECH Sep25: 1 Low-Conviction Change + 1 FAF Revision; US$1.3bn One-Way

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 the potential 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$1.3bn in one-way index flows in September 2025.

Zhejiang Sanhua Intelligent Controls (2050 HK): Big Raise Supported by Cornerstones

Zhejiang Sanhua Intellignt Controls Co. (002050 CH)‘s global offering opens today and the raise could reach up to US$1.4bn if the offer-size adjustment option and the overallotment option are exercised.
There is a large allocation to cornerstone investors. The discount of around 22.7% to the A-shares is attractive given the recent trend for Midea (300 HK) and CATL (3750 HK).
The H-shares should be added to Southbound Stock Connect in July, to the HSCI in September, and to a global index in December.

Everest Medicine Placement: Another Sell-Down by CBC, Some Caution Warranted

By Nicholas Tan

Everest Medicines (1952 HK) aims to raise around US$150m in a secondary sell-down of shares conducted by CBC Group.
This comes on the heels of a similar secondary sell down in Jan 2025, whereby CBC sold ~US$100m worth of stock, priced at a 10% discount.
In this note, we comment on the deal dynamics and run the deal through our ECM framework.

Quiddity Leaderboard HSIII Sep25: Some Changes to Expectations; Trade Idea Successful

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 potential index changes and capping flows for HSIII index rebal event in September 2025.
Based on the latest data, we see three ADDs and three DELs and one significant float percentage revision.

CaoCao IPO: The Bull Case

CaoCao Inc (1646553D CH) is the second-largest ride-hailing player in China. It has filed its PHIP to raise US$200-300 million.
CaoCao was incubated by Geely Auto (175 HK). Geely founder Li Shufu owns 83.9% of CaoCao.
The bull case rests on accelerating GTV growth, the improving fundamentals of the core business, reducing losses and shifting to cash generation.

Chow Tai Fook (1929 HK): A Decent Rebound

While Chow Tai Fook Jewellery (1929 HK) has a stellar share price performance YTD, it still lags the HSI since 2023. The solid 2H FY25 result should support further upside.
SSS growth has recovered sharply in Apr-May 2025 (the first two months of 1Q FY26), and CTF should reap further benefits from cost management and product transformation.
FY26F ROE may reach 27.2%. While its current yield is only 4.6%, it is possible to declare special dividend this year, easily pushing it to over 10%.

Eternal Beauty Pre-IPO – PHIP Updates – Perfumes Growing, Challenges Remain

Eternal Beauty Holdings (EB) is looking to raise around US$150m in its upcoming Hong Kong IPO.
Eternal Beauty is the largest brand management company of perfumes in the combined markets of Mainland China, Hong Kong and Macau, in terms of retail sales in 2023.
We have looked at the company’s past performance in our previous note. In this note we talk about the PHIP updates.

Fengxiang (9977 HK): PAG Invites Dissent After Scrapping Scrip Alternative

In an unusual move, the Offeror, PAG, and 59.42% shareholder of Shandong Fengxiang (9977 HK), has opted not to provide a scrip alternative, despite satisfying conditions to do so.
The scrip option condition – not less than 0.5% of shares out expressing interest – was satisfied on the 12th May. Therefore at least 7.9mn shares got snubbed.
Evidently PAG reckons the support for the scrip is not worth the trouble. Nor critical in mass to disrupt the Offer.

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Jun 12

Daily Brief China: Horizon Robotics, KE Holdings , MINISO Group Holding , Foshan Haitian Flavouring & Food, Pop Mart International Group L, Foshan Haitian Flavouring & Food Company, JD.com , Iron Ore, Saint Bella and more

In today’s briefing:

Horizon Robotics Placement – Momentum Is Strong but Raising Seems Opportunistic
CSI Hong Kong Connect Internet Index Rebalance: 10 Changes & Big Impact
MINISO (9896 HK)’s (Possible) TOP TOY Spin-Off Is Priced In
Foshan Haitian Flavouring A/H Listing – Strong Cornerstone, Weak Momentum
Quiddity Leaderboard HSCEI Sep25: One Change Likely; US$245mn One-Way Flow
Foshan Haitian Flavouring (3288 HK) IPO: The Valuation Perspective
Foshan Haitian Flavouring H Share Listing (3288 HK): Valuation Insights
JD.com (9618 HK): Top Trades and Strategic Insights from HKEX Options Trading
[IO Fundamentals 2025/23] Deflation Concerns and Declining Portside Inventories
Saint Bella IPO: Revenue Growth Re-Accelerated, 34 Postpartum Centers Were Opened In 2024

Horizon Robotics Placement – Momentum Is Strong but Raising Seems Opportunistic

Horizon Robotics (9660 HK) raised around US$800m in its Hong Kong IPO in October 2024. It’s back again to raise another US$600m via a placement.
Horizon Robotics (HR) is a provider of advanced driver assistance systems (ADAS) and autonomous driving (AD) solutions for passenger vehicles, empowered by its proprietary software and hardware technologies.
In this note we talk about the deal dynamics and run the deal through our ECM framework.

CSI Hong Kong Connect Internet Index Rebalance: 10 Changes & Big Impact

There are 5 constituent changes for the CSI Hong Kong Connect Internet Index in June. Plus there are capping changes for some stocks.
A lot of the adds have moved significantly in the last couple of days, so the impact over the next couple of days will be smaller.
There could be opportunities to trade the reversion strategy. Getting borrow may not be easy on some names.

MINISO (9896 HK)’s (Possible) TOP TOY Spin-Off Is Priced In

Three months ago, local media reported that Chinese lifestyle retailer MINISO Group Holding (9896 HK) was considering spinning off its collectible toy unit TOP TOY on the Hong Kong exchange.
Reportedly, MINISO could raise ~US$300mn from an IPO. MINISO has now confirmed that a spin-off is being contemplated; although a proposal is only at a preliminary stage.
TOP TOY has been a growth engine. But its contribution to the group is still ~6%. Applying a holding company discount, post spin-off, MINISO’s upside appears limited.

Foshan Haitian Flavouring A/H Listing – Strong Cornerstone, Weak Momentum

Foshan Haitian Flavouring & Food (603288 CH) (FHCC), China’s leading condiments company, aims to raise around US$1.2bn in its H-share listing.
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.
We have looked at the past performance and likely A/H premium in our previous note. In this note, we talk about the IPO pricing.

Quiddity Leaderboard HSCEI Sep25: One Change Likely; US$245mn One-Way Flow

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.
Based on the latest data, we see one ADD and one DEL.

Foshan Haitian Flavouring (3288 HK) IPO: The Valuation Perspective

Fundamentals first, Foshan Haitian Flavouring & Food Company (3288 HK)‘s IPO is interesting given a positive growth outlook – 1Q25 growth accelerated to 14.8% with margin expansion.
We value the H-share at HK$39.35, 8.4% higher than the high-end of the IPO price based on 28.2x FY25F PER to reflect its significantly stronger 3-year earnings growth.
It equals 5.9x pre-money FY25F P/B, justified by ROE of 21.8-22%, sharply ahead of peers. Net cash equals 12.4% of its A-share market cap.

Foshan Haitian Flavouring H Share Listing (3288 HK): Valuation Insights

Foshan Haitian Flavouring & Food Company (3288 HK) has launched its H Share listing at HK$35.00 to HK$36.30 per H Share. Pricing will be on 17 June.
I discussed the H Share listing in Foshan Haitian Flavouring H Share Listing: The Investment Case.
The proposed AH discount can be argued as either light or attractive. I lean toward the latter and would participate in the H Share listing.

JD.com (9618 HK): Top Trades and Strategic Insights from HKEX Options Trading

Discover sophisticated, live, multi-leg options strategies on JD.com (9618 HK), executed over the period from 4 June to 10 June on the HKEX
Highlights: A range of noteworthy strategies, including a deep in-the-money, three-months Diagonal Call Spread and an ultra-low-cost, one-week Calendar Put Spread, highlighting diverse approaches to capitalize on market movements.
Why read: This breakdown of complex option strategies sheds light on market sentiment and positioning. Detailed examples provide actionable insights that could inspire similar strategies,

[IO Fundamentals 2025/23] Deflation Concerns and Declining Portside Inventories

By Umang Agrawal

China’s CPI plunged 0.1% YoY in May-25, while producer prices declined by 3.3% driven by softening domestic demand and US tariff tensions.
China’s iron ore imports declined due to seasonal factors and early clearances, while strong steel exports may pressure prices amid front-loaded global supply.
Iron ore portside inventories fell further in early June, but weakening demand and slower pick-up volumes may soon reverse the trend and pressure prices.

Saint Bella IPO: Revenue Growth Re-Accelerated, 34 Postpartum Centers Were Opened In 2024

By Andrei Zakharov

Saint Bella, a premium postpartum care and recovery provider, moves toward Hong Kong IPO following strong +43% y/y revenue growth in 2024.
The company is uniquely positioned in premium segment under Saint Bella, Bella Isla and Baby Bella brands.
I believe Saint Bella has the potential to become one of the key postpartum care and recovery providers targeting HNW, high income and young middle class families in China

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Jun 11

Daily Brief China: Keymed Biosciences, Foshan Haitian Flavouring & Food, BYD, MINISO Group Holding , Saint Bella, PDD Holdings, Zhou Liu Fu Jewellery Co., Ltd. and more

In today’s briefing:

Keymed Bioscience Placement – Track Record Isn’t Great but Recent Performance Has Been Better
Foshan Haitian Flavouring & Food (3288 HK): Offering Details & Index Inclusion
BYD (1211 HK) Options: Unpacking the Top Trades of the Week
Miniso: TOP TOY Spin-Off – Early Stage Pop Mart. Valuation Upside
MINISO Group (9896 HK): Assessing the TOP TOY Spin-Off
Saint Bella Pre-IPO: A Few Things to like but Still Unprofitable
PDD’s Q125 Profit Decline Occurred Before US Squeeze | April-May US Sales Far Weaker for Temu, SHEIN
Pre-IPO Zhou Liu Fu Jewellery (PHIP Updates) – Some Points Worth the Attention

Keymed Bioscience Placement – Track Record Isn’t Great but Recent Performance Has Been Better

Keymed Biosciences (2162 HK), along with its controlling shareholder, is looking to raise around US$112m to fund its R&D requirements.
Keymed Biosciences, a China-based biotech company which focuses on therapeutic areas of autoimmune and oncology
In this note, we will talk about the placement and run the deal through our ECM framework.

Foshan Haitian Flavouring & Food (3288 HK): Offering Details & Index Inclusion

Foshan Haitian Flavouring & Food (603288 CH)‘s global offering opens today and the raise could reach up to US$1.5bn if the offer-size adjustment option and the overallotment option are exercised.
There is a large allocation to cornerstone investors. The discount of around 22% to the A-shares is attractive given the recent trend for Midea (300 HK) and CATL (3750 HK).
The H-shares could be added to a global index and the FXI ETF in December. Inclusion in the HSCI should be in September and Southbound Stock Connect in July.

BYD (1211 HK) Options: Unpacking the Top Trades of the Week

This Insight analyzes sophisticated, live, multi-leg options strategies on BYD (1211 HK), executed over the period from 2 June to 9 June on the HKEX
Highlights: Discover a range of noteworthy strategies, from an in-the-money bear put spread, to a bold short-term bullish iron condor, and a butterfly aiming at a narrow price target.
Why read: In-depth breakdown of complex option strategies, shedding light on market sentiment and positioning. Detailed examples provide actionable insights that could inspire similar strategies,

Miniso: TOP TOY Spin-Off – Early Stage Pop Mart. Valuation Upside

By Devi Subhakesan

MINISO has confirmed that it is considering a possible spin-off listing of TOP TOY, its pop toy division, signalling its intent to unlock value from its collectible toy business.
Pop Mart International Group L (9992 HK), the leading player in the pop toy retail segment, is trading at nearly 50x forward earnings compared to Miniso’s 13.5x forward P/E.
TOP TOY is in an early stage of its growth curve compared to Pop Mart and could be valued at a discount given notably lower operating margins.

MINISO Group (9896 HK): Assessing the TOP TOY Spin-Off

We preliminarily estimate TOP TOY may be valued at 19.1-40.3% of MINISO Group Holding (9896 HK)‘s market capitalisation, though there are still a lot of moving parts.
TOP TOY is doing well in FY24 with a 41.1% surge in GMV, and for 1Q25, its revenue grew by 58.9%, reflecting exciting growth prospects.
Bloks Group (325 HK) is a better comparable as its revenue is 2.3x TOP TOY’s, but its profit is 8x. A successful TOP TOY spin-off should benefit Miniso.

Saint Bella Pre-IPO: A Few Things to like but Still Unprofitable

By Nicholas Tan

Saint Bella (SAINT HK) is looking to raise $US200m in its upcoming Hong Kong IPO.
It operates the second largest and fastest growing postpartum care and recovery service in China, as per Frost & Sullivan report.
In this note, we provide updates on the firm’s past performance.

PDD’s Q125 Profit Decline Occurred Before US Squeeze | April-May US Sales Far Weaker for Temu, SHEIN

By Daniel Hellberg

Pinduoduo’s surprise Q125 OP & NP declines happened before US tariff, de minimis changes
Recent data from Bain & Co. suggests extremely difficult US conditions for Temu, SHEIN
If representative, the April-May US data suggest deep, lasting US challenges for the platforms

Pre-IPO Zhou Liu Fu Jewellery (PHIP Updates) – Some Points Worth the Attention

The performance slowdown and decrease in number of newly opened stores from 2023 to 2024 was due to the rapid surge in gold prices,which would put franchise model at risk.
Future performance of Zhou Liu Fu may not be benefit from the high gold prices, but could be under pressure due to rising raw material costs and reduced customer demand.
Valuation of Zhou Liu Fu could be lower than peers and the industry average. A comfortable P/E range could be 10-15x if based on 2025 net profit.

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Jun 10

Daily Brief China: Great Wall Motor, Zhejiang Sanhua Intellignt Controls Co., Ltd., China Construction Bank H, China Overseas Land & Investment, HKBN Ltd, Trip.com, XtalPi Holdings, Greentown China, Medtide, Yuexiu Property and more

In today’s briefing:

A/H Premium Tracker (To 6 June 2025): Narrow Premia Hs Worst Performers, BYD Relents
Zhejiang Sanhua Intelligent Controls A/H Listing – PHIP Updates and Thoughts on A/H Premium
HK Connect SOUTHBOUND Flows (To 6 June 2025); Volumes Up, Tech Down, ENERGY Bought Big
COLI (688 HK): The Best Beta Play for China
HKBN (1310 HK): CA Approval (All But) Done. NDRC & MoC Still Outstanding
Weak Spending over China’s Dragon Boat Festival Holiday Period Suggests Tourists Remain Frugal
Xtalpi US$860m IPO Lockup Expiry – Last of the Lockup Release with Nearly All Shares in CCASS Now
Lucror Analytics – Morning Views Asia
Pre-IPO Medtide (PHIP Updates) – Some Points Worth the Attention
Lucror Analytics – Morning Views Asia

A/H Premium Tracker (To 6 June 2025): Narrow Premia Hs Worst Performers, BYD Relents

AH spreads are slightly narrower. BANKS, INSURERS, BROKERS, INDUSTRIALS, PHARMA and UTILITIES see significant H-share outperformance vs their A pairs. TECH, CONSUMER, ENERGY mixed to worse.
Ongoing skew on H-vs-A performance this week. Those trading AH Premium <20% saw H outperform sharply but those with H Premia contracted. Quiddity Portfolio alpha trending strongly.
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.

Zhejiang Sanhua Intelligent Controls A/H Listing – PHIP Updates and Thoughts on A/H Premium

Zhejiang Sanhua Intellignt Controls Co., Ltd. (002050 CH) (ZSIC), a manufacturer of refrigeration and air-conditioning control components, aims to raise around US$1bn in its H-share listing.
ZSIC is a market leader in a number of products, with commanding market share both domestically and globally.
We have looked at the company’s past performance in our previous note. In this note, we look at the PHIP updates and talk about the likely A/H premium.

HK Connect SOUTHBOUND Flows (To 6 June 2025); Volumes Up, Tech Down, ENERGY Bought Big

Gross SOUTHBOUND volumes back above US$13bn a day this past 4-day week. Net buying back below US$500mm/day.
Among the top buys as a percentage of volume, FINANCIALS, ENERGY, TELECOMS stand out, dramatically. Among top sells, it is INFO TECH again. 8 weeks in a row negative.
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.

COLI (688 HK): The Best Beta Play for China

By Jacob Cheng

COLI, being a SOE residential developer, has no bankruptcy risk. Under the current downturn, it is gaining market share and evolving into a stronger market leader
It recently issued onshore bond at historical low coupon 1.80% (5-year) and 2.37% (10-year), which is even lower than China’s LPR. This is very significant
Valuation is almost all time low, and downside is limited. We think it is the perfect beta play for China

HKBN (1310 HK): CA Approval (All But) Done. NDRC & MoC Still Outstanding

Six months and counting; yet China Mobile (941 HK) continues to (slowly, but surely) chip away at various pre-conditions.
In its monthly update, HKBN Ltd (1310 HK) said Mobile has proposed commitments to Hong Kong’s Communication Authority, and that the commitments are sufficient to effectively address the CA’s concerns.
The CA is seeking industry feedback by the 13th June, but a favourable conclusion appears a lock. Elsewhere, no update on I-Squared’s proposal.

Weak Spending over China’s Dragon Boat Festival Holiday Period Suggests Tourists Remain Frugal

By Daniel Hellberg

China’s Ministry of Tourism & Culture reported mediocre holiday travel & spending activity
Separately, Xinhua also reported underwhelming numbers from Dragon Boat Festival period
Weak travel numbers may indicate Chinese consumers remain uneasy about near-term outlook

Xtalpi US$860m IPO Lockup Expiry – Last of the Lockup Release with Nearly All Shares in CCASS Now

XtalPi Holdings (2228 HK) was listed in Hong Kong on 13th Jun 2024 after raising US$126m. Its one-year lockup will expire soon.
QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
In this note, we will talk about the lock-up dynamics and updates since our last note.

Lucror Analytics – Morning Views Asia

By Leonard Law, CFA

US Treasury yields rose by 9-13 bps across the curve on Friday, as a stronger than projected nonfarm payrolls report drove down market expectations for Fed easing.
The yield on the 2Y and 10Y UST increased 11 bps each to 4.04% and 4.51%, respectively.
Equities rallied, as the robust jobs report allayed concerns over an imminent economic slowdown. The S&P 500 rose 1.0% to 6,000, while the Nasdaq jumped 1.2% to 19,530.

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

The sales growth of GLP-1s has entered a turning point. The actual market size of GLP-1s could be much lower-than-expected, which would affected the growth outlook of peptide CXOs.
Medtide is not strong as expected in the peptide CXOs industry. There’s a “hidden problem” in terms of the market share ranking. We updated our forecast for the next three years.
Considering geopolitical conflicts/intense competition, it’s difficult for Medtide to secure orders from industry leaders when the Company lacks competitiveness and are small in scale. Valuation should be lower than peers.

Lucror Analytics – Morning Views Asia

By Leonard Law, CFA

Treasury yields climbed yesterday, led by the front and belly tenors, in line with similar price action in Europe after ECB President Christine Lagarde indicated that the central bank could pause rate cuts in the summer.
The UST curve bear-flattened, with the yield on the 2Y UST rising 5 bps to 3.92% and the yield on the 10Y UST up 4 bps at 4.39%.
US equities retreated, with the S&P 500 and Nasdaq declining 0.5% and 0.8%, respectively. US President Donald Trump and his Chinese counterpart Xi Jinping spoke on Thursday in a call that lasted c. 1.5 hours.

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Jun 09

Daily Brief China: Zhejiang Sanhua Intellignt Controls Co., Ltd., Tam Jai International, Sichuan Kelun-Biotech Biopharm, Zhou Liu Fu Jewellery Co., Ltd. and more

In today’s briefing:

Sanhua Intelligent Controls H Share Listing: The Investment Case
Tam Jai Intl (2217 HK): Privatisation Stays Appealing Despite…
Sichuan Kelun-Biotech Biopharm (6990.HK) Placement – Thoughts The Pipeline and Valuation Outlook
ECM Weekly (9 June 2025) – Haitian, Sanhua, Virgin Aus, Primo, Kitazato, Wistron, Kelun Bio, Mao Gep
Zhou Liu Fu Pre-IPO: Business Is Deteriorating Despite Rosy Gold Prices

Sanhua Intelligent Controls H Share Listing: The Investment Case

Zhejiang Sanhua Intellignt Controls Co., Ltd. (002050 CH), the world’s largest refrigeration and air-conditioning control component manufacturer, has filed its PHIP for a H Share listing to raise US$1.0-1.5 billion.
Sanhua’s market share in the global refrigeration and air-conditioning control component market was 45.5% in terms of revenue in 2024, according to Frost & Sullivan.
The fundamentals are good, with the positives (refrigeration and aircon rising growth, stable margin, and cash generation) outweighing the negatives (automotive declining growth, US tariffs overhang).

Tam Jai Intl (2217 HK): Privatisation Stays Appealing Despite…

Despite some disgruntled investors, the privatisation of Tam Jai International (2217 HK) is appealing. If it is successful, payment will be made on or before 26 Aug.
The proposed price of HK$1.58 equals a 24% premium to the peer CY25F PER. The poor reported peer results and earnings downgrades are the reasons for a narrower premium.
Since the announcement of privatisation, the sector has retreated by 7.8%, vs. a 5.2% gain in HSI, reflecting the industry’s tough operating environment. It remains wise to exit.

Sichuan Kelun-Biotech Biopharm (6990.HK) Placement – Thoughts The Pipeline and Valuation Outlook

Kelun Bio announced US$250 million placement, making it the largest follow-on offering in the biopharma industry in HK market over the past 12 months, but HK$331.8/share Placing Price is expensive.
SKB264 has demonstrated the ability to compete head-to-head with the world’s best therapies in TNBC and NSCLC. It is reasonable for Kelun Bio’s valuation to be higher than Akeso.
We recommend to buy when market value falls in the range of US$2.5-5.25 billion.If SKB264 fails to deliver good clinical data in future critical clinical trials, valuation would face pullback.

ECM Weekly (9 June 2025) – Haitian, Sanhua, Virgin Aus, Primo, Kitazato, Wistron, Kelun Bio, Mao Gep

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, Foshan Haitian Flavouring & Food (603288 CH) and Zhejiang Sanhua Intellignt Controls Co., Ltd. (002050 CH) might launch their IPOs soon.
On the placements front, Wistron Corp (3231 TT) launched its well flagged GDR, along with a few more deals this week.

Zhou Liu Fu Pre-IPO: Business Is Deteriorating Despite Rosy Gold Prices

By Nicholas Tan

Zhou Liu Fu Jewellery Co., Ltd. (1716396D CH) is looking to raise $US200m in its upcoming Hong Kong IPO.
It is a leading and fast growing jewellery franchise in China offering a diverse range of products through offline and online sales channels.
In this note, we provide updates on the firm’s past performance.

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Jun 08

Daily Brief China: Newtrend Technology, DiDi Global and more

In today’s briefing:

China Healthcare Weekly (Jun.8)-Summit/Akeso, Giant Biogene’s Trouble, Views on Newtrend IPO Pricing
Didi Global Q125 Results | Company Should Move to List Shares While Earnings & Conditions Favorable

China Healthcare Weekly (Jun.8)-Summit/Akeso, Giant Biogene’s Trouble, Views on Newtrend IPO Pricing

Summit’s chances of being sold have decreased significantly. Since Summit does not have enough funds to promote multiple large-scale Phase III trials, the outlook of Summit/Akeso will become increasingly passive.
The public statements of Zhao Yan from Bloomage have raised doubts in the market about the prospects of collagen and Giant Biogene. Below, we shared some differentiated views on this.
The IPO pricing of Newtrend is HK$18.9-20.9/share. We think Newtrend is overvalued considering the “price war” and oversupply issue. Reasonable valuation should be lower than Anhui Jinhe Industrial (002597 CH).

Didi Global Q125 Results | Company Should Move to List Shares While Earnings & Conditions Favorable

By Daniel Hellberg

Didi reported solid top-line growth, improving core margins (and OpCF) in Q125
Drivers of Q125 top-line growth were broad-based, but note F/X impact on International
We believe Didi should move to re-list shares while earnings & conditions are supportive

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Jun 07

Daily Brief China: PDD Holdings, FS.COM, Hang Seng Index and more