China

In today’s briefing:

Quiddity Leaderboard ChiNext & ChiNext 50 Jun25: Last-Minute Methodology Changes; Final Expectations
Asian Equities: Currency Strength Driving FII Flows – Winners and Losers
CSI300 Index Rebalance Preview: 8 Changes a Side in June; US$4.5bn Trade
Canvest (1381 HK): Buy Here, And On Weakness
Chery Auto Pre-IPO – The Negatives – Small NEV Portfolio
Busy Ming IPO: Hyper Growth and Solid Profitability, Largest Snack and Beverage Retailer in China
Jiangsu Hengrui Pharma H Share Listing: The Investment Case
HSCEI Earning Revision Analysis (Apr): CCB, Sinopec, BOC, Petrochina, CNOOC, China Overseas, Ping An
CATL A/H Listing – PHIP Updates and Updated Thoughts on A/H Premium
TAL Education Group: Innovation in Learning Devices

Quiddity Leaderboard ChiNext & ChiNext 50 Jun25: Last-Minute Methodology Changes; Final Expectations

By Janaghan Jeyakumar, CFA

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.
In this insight, we have presented our final expectations for the upcoming index rebal event. We expect 9 ADDs/DELs for the ChiNext index and 5 ADDs/DELs for the ChiNext 50.

Asian Equities: Currency Strength Driving FII Flows – Winners and Losers

By Manishi Raychaudhuri

The recent spike in Asian currencies is driving foreign institutional flows into Asian equities. Currency appreciation is usually a lead indicator of FII flows, implying that this enthusiasm may continue.
The markets that were sold down the most are attracting the most flows and could continue to do so. India, Taiwan and to a lesser extent, Korea qualify.
Domestic sectors like Chinese internet, restaurant chains, athleisure; Indian private banks, consumer discretionary, hospital chains could gain. So could defensives with high dividend yields, e.g. Korea and Chinese utilities, telecom.

CSI300 Index Rebalance Preview: 8 Changes a Side in June; US$4.5bn Trade

By Brian Freitas

There could be 8 changes at the June rebalance with the Industrials and Information Technology sectors gaining 3 index spots each and the Materials sector losing 4 spots.
Estimated one-way turnover is 1.44% at the rebalance leading to a round-trip trade of CNY 32.55bn (US$4.5bn). There are 13 stocks with over 2x ADV to trade.
The forecast adds have outperformed the forecast deletes over the last 6 weeks even though there have been large ETF creations. There could be more outperformance coming up.

Canvest (1381 HK): Buy Here, And On Weakness

Ahead of the 12th May shareholder to vote on Grandblue’s Offer, recent price action in Canvest (1381 HK) has been odd, with considerable selling volume.
By all accounts, a chunk of that selling was brought about by an event desk in Singapore shutting down. Elsewhere, via numerous inquiries, I see nothing deal specific.
In recent positive developments, AEP (3.62% of shares out) is supportive; there are no material updates in s329 announcements; and I see nothing of note when inspecting the shareholder register.

Chery Auto Pre-IPO – The Negatives – Small NEV Portfolio

Chery Automobile is looking to raise about US$1bn in its upcoming Hong Kong IPO.
Chery Auto is a Chinese passenger vehicle company which designs, develops, manufactures and sells passenger vehicles, including internal combustion engine vehicles and new energy vehicles, both domestically and overseas.
In this note, we talk about the not-so-positive aspects of the deal.

Busy Ming IPO: Hyper Growth and Solid Profitability, Largest Snack and Beverage Retailer in China

By Andrei Zakharov

Busy Ming Group, “a snack brand for the people” and the largest snack and beverage chain retailer in China, filed for an IPO in Hong Kong.
The fast-growing retailer was backed by HongShan Capital, Gaorong Ventures, 5Y Capital, Haoxiangni Health Food, and Yanker Shop Food Co., among others.
Busy Ming Group is tapping into Gen Z and younger millennial consumers with playful branding and social media engagement.

Jiangsu Hengrui Pharma H Share Listing: The Investment Case

Jiangsu Hengrui Medicine (600276 CH), a leading Chinese pharmaceutical company, has filed its PHIP for an H Share listing to raise US$2 billion.
Jiangsu Hengrui Pharmaceuticals (JHR HK) ranked first among Chinese pharma companies in revenue from NME drugs in 2023 and the number of commercialised NME drugs in 2024.
The investment case rests on its product portfolio, strong revenue growth, rising profitability, cash generation, strong balance sheet and undemanding valuation.

HSCEI Earning Revision Analysis (Apr): CCB, Sinopec, BOC, Petrochina, CNOOC, China Overseas, Ping An

By Ke Yan, CFA, FRM

We analysed the earning revision of component stocks of HSCEI in the past month.
We tabulated stocks with the top impact on index’s EPS, stocks’ EPS revision, and revenue revision.
We highlighted EPS revision on CCB, Sinopec, BOC, Petrochina, CNOOC, China Overseas, Ping An.

CATL A/H Listing – PHIP Updates and Updated Thoughts on A/H Premium

Contemporary Amperex Technology (CATL) (300750 CH), one of the world’s largest battery solutions providers, aims to raise around US$5bn in its H-share listing.
CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.
We have looked at the company’s past performance and valuations in our earlier notes. In this note, we talk about its recent updates and provide updated thoughts on valuations.

TAL Education Group: Innovation in Learning Devices

By Baptista Research

TAL Education Group’s latest quarter and fiscal year performance presents a mixed picture, with notable expansions alongside challenges in profitability.
Key areas such as Learning Services and Content Solutions have shown significant revenue growth, demonstrating the company’s efforts to broaden its educational offerings.
In fiscal 2025, TAL Education Group recorded a considerable increase in net revenues, reaching USD 2.3 billion, a 51% rise from the previous year.

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May 06

Daily Brief China: Contemporary Amperex Technology (CATL), NetEase , Tencent, Shanghai Shenzhen CSI 300 Index, Guangzhou Automobile Group, Bright Smart Securities And, PDD Holdings, Kayou, MGM China Holdings, JNBY Design Ltd and more

In today’s briefing:

CATL: Launch of Book Building for Hong Kong Listing
Hang Seng Indexes: ADR Depositary Holding Changes; Round-Trip Trade Is US$5.1bn; NetEase Outperforms
HK Connect SOUTHBOUND Flows (To 2 May 2025); Tech Selling in a Quiet Week
CSI 300 Index: Tactical Outlook Following the Labor Day Holiday
A/H Premium Tracker (To 2 May 2025): AH Premia Fall Small; Spread Torsion Provides Continued Alpha
Bright Smart (1428 HK): An Attempt to Derive a Value
In Response to Tariff & “De Minimis” Changes, Temu Alters US Business Model, Morphing Into…Amazon?
Pre-IPO Kayou – The Strength of Business Model and the Potential Risks Behind
Lucror Analytics – Morning Views Asia
HK-Listed Apparel & Footwear Screener May 2025: Can’t Shake The Tariff Overhang

CATL: Launch of Book Building for Hong Kong Listing

By Douglas Kim

According to Reuters, CATL plans to launch its Hong Kong listing process including book building during the week of 12 May.
We estimate CATL to generate revenue of 423.6 billion RMB (up 17% YoY) and net profit of 55.6 billion RMB (up 13.1% YoY) in 2025.
Our base case valuation of CATL is implied market cap of 1.3 trillion CNY which is 32% higher than current market cap. We believe CATL’s shares are undervalued.

Hang Seng Indexes: ADR Depositary Holding Changes; Round-Trip Trade Is US$5.1bn; NetEase Outperforms

By Brian Freitas

Most Secondary-listed companies have announced the number of shares that underlie ADRs and are held by the ADR depositaries as of end-March (or around that time).
There are some significant increases in the number of shares held by the ADR depositaries. That changes the free float for the stocks and consequently the estimated flows.
NetEase (9999 HK), Trip.com Group (9961 HK), Baidu (9888 HK) and Weibo (9898 HK) will have passives buying, while NIO (9866 HK) switches to a sell.

HK Connect SOUTHBOUND Flows (To 2 May 2025); Tech Selling in a Quiet Week

By Travis Lundy

Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous 2021Q1 record by >HK$100bn. The first three weeks in April were HK$168bn. The next two weeks flat.
Two weeks ago saw SOEs sold quite heavily in somewhat weaker volume. This past week saw only 3 days of SOUTHBOUND trading and saw net selling of big internet names.
This week threatens to be quiet as well, as tariff news moves away from China for a little while, and towards foreign auto exporters, Canada, Mexico, and “trade frameworks.”

CSI 300 Index: Tactical Outlook Following the Labor Day Holiday

By Nico Rosti

Following an extended holiday beginning May 1st, the CSI 300 Index (SHSZ300 INDEX) resumes trading on May 6th.
The WEEKLY close before the holiday—during a shortened trading week—was modestly negative. However, the index would need to decline to 3697 or lower to trigger a buy-the-dip opportunity.
Since the index has already closed 1 week down, our time model suggests there is a good chance (62%) it could go up this week.

A/H Premium Tracker (To 2 May 2025): AH Premia Fall Small; Spread Torsion Provides Continued Alpha

By Travis Lundy

A quiet week as most indices – HK and mainland – saw performance hover around zero for the three days both were open at the start of the week.
For a couple of months I’ve thought warning signs were flashing and spreads could widen. Widening has paused. I am not comfortable it will remain paused or Hs will outperform.
The Quiddity Portfolio is pretty hunkered down and nearly flat H/A risk. But benefits from spread torsion (wider spreads coming in, small premia widening). Alpha good again this week.

Bright Smart (1428 HK): An Attempt to Derive a Value

Bright Smart Securities (1428 HK) will benefit from Ant Financial’s technology innovation capabilities, customer group, digitalisation, and cross-selling to over 640m of Alipay users.
With Futu Holdings Ltd (FUTU US) having an average PER of 19x for 2020-2025, we use 15x for BSS after a conservative estimate of 50% earnings growth in 5 years.
We value BSS at HK$8.13, but this is a conservative estimate. Its earnings growth is likely to be faster than our forecast, given its better leverage on the new parent.

In Response to Tariff & “De Minimis” Changes, Temu Alters US Business Model, Morphing Into…Amazon?

Last week Temu confirmed dramatic changes to its business model in the US
Temu won’t sell Chinese goods directly to US consumers, & will rely on local fulfillment
The moves seem to put Temu into direct competition with Amazon, Walmart.com

Pre-IPO Kayou – The Strength of Business Model and the Potential Risks Behind

Kayou’s business model revolves around IP licensing+blind box+multi-category expansion.With trading cards as the core traffic entry point, Kayou expands to other products, forming a synergistic effect of “card revenue+derivative products”.
Kayou mainly relies on licensed IPs to drive growth, Its revenue are highly concentrated on limited number of IPs. The expiration of IP license agreements is “The Sword of Damocles”
Valuation could be lower than peers as the core risks are concentrated on IP renewal and the government’s supervision of minors, which would negatively affect the sustainability of future growth.

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: MGM China, Seazen Group, Tata Motors, JSW Steel
In the US, nonfarm payrolls came in meaningfully above estimates at 177 k in April (138 k e / 185 k revised p), albeit the March numbers were revised downwards to 185 k (from 228 k). The unemployment rate was unchanged at 4.2%. The average hourly earnings rose 3.8% y-o-y (3.9% e / 3.8% p) and 0.2% m-o-m (0.3% e / 0.3% p).
The Chinese Ministry of Commerce said in a statement on Friday that US officials have “repeatedly stated that they are willing to negotiate with China on tariff issues”, and added that China is currently evaluating the situation.

HK-Listed Apparel & Footwear Screener May 2025: Can’t Shake The Tariff Overhang

By Sameer Taneja

Share prices are gradually stabilizing, influenced by news reports suggesting that Trump may eventually reduce tariffs on China (although trust overhang with Trump statements remains an issue).
Besides Bosideng International Holdings (3998 HK), most companies have halted capital allocation decisions like buybacks till more clarity emerges.
Stella International (1836 HK) has the highest US revenue exposure at 47%, followed by Crystal International (2232 HK) at 38%, and Lever Style (1346 HK) at 58%.

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May 05

Daily Brief China: Chongqing Rural Commercial Ban, Akeso Biopharma Inc, Contemporary Amperex Technology (CATL), CF PharmTech, S.F. Holding and more

In today’s briefing:

Quiddity Leaderboard CSI 300/500 Jun25: Momentum Turning Positive for This Major Rebal Trade
China Healthcare Weekly (May.4)-HK Stock Is About to Soar, Mindray’s Trouble,Views on Akeso’s Plunge
ECM Weekly (5 May 2025) – CATL, Chery, Ather, Drinda, Eco-Shop, Green Tea, DN Sol, Lotte Glo, Hanwha
Pre-IPO CF PharmTech – The Outlook Is Bleak Due to VBP and Fierce Competition
Chinese Express: SF, STO Enjoyed Margin Expansion in Q125; YTO, Yunda Saw Margins Contract

Quiddity Leaderboard CSI 300/500 Jun25: Momentum Turning Positive for This Major Rebal Trade

By Janaghan Jeyakumar, CFA

CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
In this insight, we have presented our final expectations for ADDs and DELs for the upcoming semiannual index rebal event in June 2025.
We expect 6 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index during this index review based on the latest available data.

China Healthcare Weekly (May.4)-HK Stock Is About to Soar, Mindray’s Trouble,Views on Akeso’s Plunge

The HKD hit its upper limit of 7.75/USD. Capital inflows are expected post–Labor Day, likely boosting Hong Kong stock prices.
Mindray faces headwinds. A turnaround may come in 25Q3–Q4, but the market seeks a new growth story. A 20–25x TTM P/E reflects fair value, not undervaluation.
Akeso’s high valuation leans on HARMONi-3 and HARMONi 7 over HARMONi-2. Final OS data raises concerns, as MRCT is challenging and the safety margin is lower than expected.

ECM Weekly (5 May 2025) – CATL, Chery, Ather, Drinda, Eco-Shop, Green Tea, DN Sol, Lotte Glo, Hanwha

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, Contemporary Amperex Technology (CATL) (300750 CH) is said to be gearing up for an IPO launch this month, as per media reports.
On the placements front, Hanwha Ocean (042660 KS) was the only sizable placement over the past week that we covered.

Pre-IPO CF PharmTech – The Outlook Is Bleak Due to VBP and Fierce Competition

Unlike most biotech companies in Hong Kong which focus on innovative drugs, CF PharmTech mainly produces generic drugs. Its revenue mainly comes from CF017, with high single product risk.
The pipelines have to face fierce competition and don’t have advantage in R&D progress in from of competing candidates. CF PharmTech is hard to generate decent profits due to VBP.
Since its establishment, CF PharmTech has raised its valuation step by step through multiple rounds of capital increase and equity transfer.Valuation was RMB4.021 billion in 2022, which is already high.

Chinese Express: SF, STO Enjoyed Margin Expansion in Q125; YTO, Yunda Saw Margins Contract

SF Hldg had slowest Q125 revenue growth among China-listed express companies, STO fastest
Only these two express firms reported margin expansion in Q125 — how’d they do it?
Q125 results suggest two very different paths toward improved express profitability

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May 04

Daily Brief China: Contemporary Amperex Technology (CATL), Eva Airways and more

In today’s briefing:

CATL H Share Listing: AH Discount Views
Monthly Air Cargo Tracker | Even Before US Tariff Chaos, Conditions Had Turned Weaker (May 2025)

CATL H Share Listing: AH Discount Views

Contemporary Amperex Technology (CATL) (300750 CH), the world’s largest supplier of EV and ESS batteries, is set to launch an H Share listing to raise US$5 billion.
In CATL H Share Listing: The Investment Case, a leading market position, forecasted return to growth, peer-leading profitability, cash generation, peer-leading FCF margin and an attractive valuation are highlighted.
In this note, I examine the likely discount CATL will offer its H Shares compared to the A Shares.

Monthly Air Cargo Tracker | Even Before US Tariff Chaos, Conditions Had Turned Weaker (May 2025)

Even before US tariff and de minimis changes, Asian air cargo conditions had turned weaker
Carrier load factors were up seasonally in March, but down Y/Y, and remain quite low
Data from Taiwanese carriers suggests shift away from Transpacific to short-haul routes

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May 03

Daily Brief China: Baidu, Kayou and more

In today’s briefing:

Baidu’s AI Shake-Up: Can ERNIE 4.5 Turbo Outmaneuver DeepSeek & Alibaba?
Kayou Pre-IPO: Financials and Other Metrics Outputs

Baidu’s AI Shake-Up: Can ERNIE 4.5 Turbo Outmaneuver DeepSeek & Alibaba?

By Baptista Research

Baidu is intensifying its AI initiatives with the launch of ERNIE 4.5 Turbo and ERNIE X1 Turbo, aiming to solidify its position in China’s competitive AI landscape.
These models boast enhanced multimodal capabilities and are priced significantly lower than competitors, with ERNIE 4.5 Turbo costing just 1% of GPT-4.5’s price.
In a strategic shift, Baidu plans to open-source ERNIE 4.5 by June 30, 2025, and has made its ERNIE Bot free for individual users.

Kayou Pre-IPO: Financials and Other Metrics Outputs

By Andrei Zakharov

Kayou Inc., a founder led IP-themed trading card company, plans to go public in Hong Kong. The company’s financial profile and profitability are unique among its mid-cap peers.
The company reported 2024 revenue of RMB10,057m, up 278% y/y, driven by an increase in sales of trading cards, corresponding to an increase in their sales volume.
Kayou Inc. appears to have a decent runway for growth. Companies with both “elite” gross profit margins and higher revenue growth would tend to trade at higher multiples.

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May 02

Daily Brief China: Hainan Meilan International Airport, Kayou, Luckin Coffee, Fujian Lemo IoT Technology, Suzhou Ribo Life Science and more

In today’s briefing:

Meilan Airport (357 HK): Possible Unconditional MGO at HK$10.62
Hainan Meilan Intl Airport (357 HK): Hainan SASAC’s Left/Right Pocket MGO
Hainan Meilan Intl Airport (357 HK): Possible Mandatory General Offer
Kayou IPO Preview: 250%+ Growth + FCF of $500M+ in 2024, Leader in the Trading Card Sector in China
[Luckin (LKNCY US, BUY, TP US$39) TP Change]: Coffee Bean Price Hike Hurts Margin but Boosts Sales
Pre-IPO Fujian Lemo IoT Technology – The Outlook for Growth and Profit Margins Is Not Optimistic
Suzhou Ribo Life Science (瑞博生物) Pre-IPO Quick View: Scarcity of SiRNA Player

Meilan Airport (357 HK): Possible Unconditional MGO at HK$10.62

Haikou Meilan International Airport Company entered an SPA with Hainan Island Construction (600515 CH) to sell its Hainan Meilan International Airport (357 HK) 50.19% stake at RMB9.85 per share (HK$10.62).
The SPA completion requires several regulatory approvals, which are low-risk, particularly as Hainan SASAC is the largest shareholder of the offeror and the seller.
Under Rule 26.1 of the Takeovers Code, upon completion, the offeror will be required to make an unconditional mandatory cash offer at HK$10.62 per share. The MGO price is final.

Hainan Meilan Intl Airport (357 HK): Hainan SASAC’s Left/Right Pocket MGO

Hainan Meilan International Airport (357 HK) has announced a potential change of control, via the domestic shares.
Haikou Meilan’s major shareholder, Hainan Airport Industrial, has entered into a SPA with Hainan Island (600515 CH) to sell its 50.19% stake, the completion of which triggers an unconditional MGO.
The H-share Offer price will be HK$10.62/share. That’s not compelling; but it’s not meant to be as Hainan Airport Industrial and Hainan Island Construction are ultimately controlled by Hainan SASAC.

Hainan Meilan Intl Airport (357 HK): Possible Mandatory General Offer

The change in controlling shareholder at Hainan Meilan International Airport (357 HK) will trigger a general offer. At HK$10.62, we do not see the proposed offer price attractive.
The proposed price is only at 10.6% premium to the latest closing price, and equals to 1.15x 12-month forward P/B, way lower than the 5-year peak of 5.1x.
The new parent Hainan Airport Infrastructure (600515 CH) can generate synergy, and the turn of Hainan into a Free Trade Port will attract visitors, boosting the long-term outlook.

Kayou IPO Preview: 250%+ Growth + FCF of $500M+ in 2024, Leader in the Trading Card Sector in China

By Andrei Zakharov

Kayou Inc., early-mover in the trading card industry in China, filed for an IPO in Hong Kong. The company sells trading cards, toys, figures, badges, pens, and notebooks, among others.
Kayou Inc. received capital of ~$135M from HongShan Capital and Tencent Holdings in 2022. Mr. Li Qibin founded trading card and collectible toy firm in 2011.
Founder led company has delivered 250%+ growth and FCF of $500M+ in 2024. The market opportunity is large enough to support sustained high growth for Kayou for several years.

[Luckin (LKNCY US, BUY, TP US$39) TP Change]: Coffee Bean Price Hike Hurts Margin but Boosts Sales

By Eric Wen

Luckin reported C1Q25 revenue in-line/6% vs. our estimate/consensus, and non-GAAP operating profit 9%/75% higher than our estimate/consensus, thanks to warmer weather and constrained marketing spending;
Despite Luckin pre-emptive lock-ins, rising coffee bean price shall still take its toll as Luckin’s biggest rival Starbucks should be equally capable of managing the commodity price risk.
We keep Luckin as BUY rating but cut TP to US$39.

Pre-IPO Fujian Lemo IoT Technology – The Outlook for Growth and Profit Margins Is Not Optimistic

Lemo increased the number of massage equipment in the cinemas significantly, but the transaction value has reflected its ineffective business expansion. The Company may have already encountered a growth ceiling.
Lemo’s business model requires high occupancy fee and maintenance costs, which is hard to decrease. However, if revenue growth slows down, Lemo’s profits would be “eroded” due to high costs.
In Sep. 2024, valuation of Lemo reached RMB750 million. We think valuation of Lemo could be lower than that of peers in the future due to concerns on the outlook.

Suzhou Ribo Life Science (瑞博生物) Pre-IPO Quick View: Scarcity of SiRNA Player

By Ke Yan, CFA, FRM

Suzhou Ribo Life is looking to raise at least US$100 million via a Hong Kong listing. CICC and Citi are the deal sponsors.
Ribo Life is a world leading company in the area of siRNA research.
The company’s RBD4059 is potentially the first in class siRNA drug for thrombotic diseases.

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May 01

Daily Brief China: Soundwill Holdings, Suzhou Kematek, SunCar Technology Group , Chery Automobile Co. Ltd., Green Tea Group and more

In today’s briefing:

Soundwill Holdings (878 HK): Wide Spread Ahead of the 23 May Scheme Vote
Quiddity Leaderboard CSI All Share Semiconductors Jun25: Final Expectations
SDA: SunCar reports 2024 financial and operating results which showed strong revenue and adjusted EBITDA growth. The company continues to secure multiple business agreements and partnerships.
Chery Auto Pre-IPO – The Positives – Very Strong Earnings Growth
Green Tea Group Pre-IPO – PHIP Updates – Still Being Driven Purely by Store Expansion

Soundwill Holdings (878 HK): Wide Spread Ahead of the 23 May Scheme Vote

Soundwill Holdings (878 HK)’s IFA opines that the Foo family’s HK$8.50 offer is fair and reasonable. The vote is on 23 May.
Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders’ rejection) and a headcount test. No shareholder holds a blocking stake.
The offer is attractive compared to historical trading ranges. The vote risk is low. At the current price and for a June 11 payment, the gross/annualised spread is 4.3%/44.0%.

Quiddity Leaderboard CSI All Share Semiconductors Jun25: Final Expectations

By Janaghan Jeyakumar, CFA

CSI All Share Semiconductors & Semiconductor Equipment Index represents the largest and most-liquid stocks in the Semiconductor Industry Group from the Shanghai, Shenzhen, and Beijing Exchanges.
In this insight, we have presented our final expectations for ADDs and DELs for the upcoming semiannual index rebal event in June 2025.
We expect up to four ADDs and six DELs for the CSI All Share Semiconductors index during this index review based on the latest available data.

SDA: SunCar reports 2024 financial and operating results which showed strong revenue and adjusted EBITDA growth. The company continues to secure multiple business agreements and partnerships.

By Zacks Small Cap Research

SunCar Technology Group ((NASDAQ: SDA) is a leading Chinese cloud-based provider of digital enterprise auto services and auto eInsurance services in China.
The company offers one-stop, fully digital, on-demand automotive service systems to help enterprise clients build up their customer base and serve their end customers (auto owners).
The company has grown revenues rapidly in recent years, which we expect to continue in the near-to-midterm.

Chery Auto Pre-IPO – The Positives – Very Strong Earnings Growth

Chery Automobile is looking to raise about US$1bn in its upcoming Hong Kong IPO.
Chery Auto is a Chinese passenger vehicle company which designs, develops, manufactures and sells passenger vehicles, including internal combustion engine vehicles and new energy vehicles, both domestically and overseas.
In this note, we look at the company’s past performance.

Green Tea Group Pre-IPO – PHIP Updates – Still Being Driven Purely by Store Expansion

By Troy Wong

Green Tea Group (GTG) is looking to raise up to US$200m in its upcoming Hong Kong IPO. The deal will be run by Citi and CMBI.
GTG is a leading Casual Chinese restaurant chain operator in Mainland China, its revenue growth has been driven mainly via rapid store expansion.
Persistently negative SSSG post-COVID could signal potential cannibalization or a negative impact from a shift in consumer spending behavior.

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Apr 30

Daily Brief China: Horizon Robotics, Dickson Concepts Intl, Hainan Drinda Automotive Trim, Soundwill Holdings, Sichuan Biokin Pharmaceutical Co Ltd, BYD, Green Tea Group, ICBC (H), Amara Holdings and more

In today’s briefing:

Horizon Robotics (9660 HK): Global Index Inclusion After April & October Lock-Ups
Poon’s Underpriced Takeover. Minorities Deserve Better
Dickson Concepts (113 HK): Sir Poon’s Scheme Offer Below Net Cash
Hainan Drinda New Energy (A/H IPO) – Business Was Acquired for 1/3rd the Price, Three Years Ago
Soundwill Holdings (878 HK): 23rd May Vote On Founder’s Offer
Sichuan Biokin A/H Listing: Good Time for Listing
BYD (1211 HK): Top Trades Reflect Bearish Bias in HKEX Options Trading Strategies
Pre-IPO Green Tea Group (PHIP Updates) – Some Points Worth the Attention
ICBC: Signs of a Turnaround in Fund Positioning
Asia Real Estate Tracker (29-Apr-2025): Link Points Tokyo expansion with Nuveen executive hire

Horizon Robotics (9660 HK): Global Index Inclusion After April & October Lock-Ups

By Dimitris Ioannidis

Free float is expected to increase from 10% to 70% on 24 April for Global-F and on 24 October for Global-M. The delayed increase is due to undisclosed shareholders.
Horizon Robotics (9660 HK) is forecasted to be added to global all-world in June 2025 following the 6-month lock-up expiry of most shareholders.
Horizon Robotics (9660 HK) is forecasted to be added to global standard in February 2026 following the 12-month lock-up expiry of undisclosed shareholders.

Poon’s Underpriced Takeover. Minorities Deserve Better

Dickson Concepts (113 HK) (DC)’s Chairman, Dickson Poon (& relatives), holding 61.98%, have tabled an Offer by way of a Scheme for shares not held, at HK$7.20/share (best & final).
That compares to DC’s net cash (as at 30 Sept 2024) of HK$7.44/share. Plus financial assets comprise an additional ~HK$2.16/share.
The IFA will cite liquidity and DC’s historical discount to NAV, and opine “reasonable”, and perhaps even “fair”. It is neither. Minorities should vote this down. But probably won’t …

Dickson Concepts (113 HK): Sir Poon’s Scheme Offer Below Net Cash

Dickson Concepts Intl (113 HK) disclosed a Bermuda scheme offer from the controlling shareholder (Sir Poon) at HK$7.20, a 50.6% premium to the last close price.
The offer is final. While the offer represents an all-time high and is attractive compared to historical trading ranges, it is below net cash.
No disinterested shareholder holds a blocking stake, and retail seems supportive (lowering the risk of the headcount test). The offer, while light, will likely succeed.

Hainan Drinda New Energy (A/H IPO) – Business Was Acquired for 1/3rd the Price, Three Years Ago

Hainan Drinda Automotive Trim (002865 CH) plans to raise up to US$234m via its A/H listing.
HDNET is a specialized manufacturer of PV cells which are used in making PV modules.
In this note, we look at the company’s recent performance and other deal dynamics, as well as valuations.

Soundwill Holdings (878 HK): 23rd May Vote On Founder’s Offer

On the 7th March, small-cap property developer Soundwill (878 HK) announced an Offer from Grace Foo (ED) and her family, controlling 74.97% of shares out, by way of a Scheme.
The Offer Price of $8.50/share, including a $1.00/share dividend, was a 62.84% premium to undisturbed. But a 87.66% discount to the (then) most recent NAV. Terms were final.
The Scheme Doc is now out, with a Court Meeting on the 23rd May, and payment on or before the 11th June. The IFA (Altus Capital) says “fair & reasonable”.

Sichuan Biokin A/H Listing: Good Time for Listing

By Ke Yan, CFA, FRM

Sichuan Biokin reported 2024 results, with a large chunk of revenue from its product licensing to BMS.
We analyzed its key products’ current clinical trials and upcoming milestones. We also look at peer performance.
Overall, we are of the view that many factors bode well for Biokin’s H-share listing

BYD (1211 HK): Top Trades Reflect Bearish Bias in HKEX Options Trading Strategies

Over the past five trading days, BYD (1211 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.
Popular Strategies: Call/Put Spreads account for 88% of all strategies, with a bias towards bearish views.
Lottery Trades: a recent trend, observed in other stocks as well, manifests itself in BYD (1211 HK). A lotter trade bets on a low probability event with a high payout.

Pre-IPO Green Tea Group (PHIP Updates) – Some Points Worth the Attention

The decline in Green Tea’s performance in 2024 cannot be solely attributed to external factors such as economic downturn and the decline in consumption. There are deeper reasons behind it.
The growth is mainly contributed by delivery service. However, commission fee is high and average spending per order is lower than dine-in services.So delivery service has limited contribution to profits.
The aggressive expansion of restaurants may further dilute the performance of individual restaurant. We shared our three-year forecast.Valuation of Green Tea could be lower than Xiaocaiyuan and the industry average

ICBC: Signs of a Turnaround in Fund Positioning

By Steven Holden

Consistent declines in fund ownership in ICBC finally hit a floor.
Over the past six-months, 8 new positions — led by Goldman Sachs and Heptagon — have outpaced 3 closures, with 29 buyers versus 18 sellers.
ICBC is the 6th most widely owned stock in the China & HK Financials sector, ahead of Bank Of China Ltd but behind China Merchants and China Construction Bank.

Asia Real Estate Tracker (29-Apr-2025): Link Points Tokyo expansion with Nuveen executive hire

By Asia Real Estate Tracker

Link has appointed a former Nuveen executive to lead its expansion into Japan, signaling the company’s commitment to growing its presence in the region.
Amara Chairman is spearheading a $392 million bid to privatize a Singapore hotel group, demonstrating a growing trend of investments in the hospitality industry.
ANREV reports a significant decline of over 50% in global real estate capital raising from its peak in 2022, highlighting challenges in the current market environment.

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Apr 29

Daily Brief China: Geely Auto, Tencent, Guangzhou Xiao Noodles Catering Management, Auntea Jenny (Shanghai) Industrial, ZTO Express Cayman and more

In today’s briefing:

Geely (175 HK): To Be Only Comparable Competitor to BYD in 1Q25
Tencent (700 HK): Volatility Smile Signals Strategic Opportunities in Options Trading
Guangzhou Xiao Noodles Catering Management Pre-IPO Tearsheet
Tencent (700 HK): Top Trades and Strategic Insights from HKEX Options Trading
Pre-IPO Auntea Jenny (Shanghai) Industrial (PHIP Updates) – Some Points Worth the Attention
Monthly Chinese Express Tracker | March, Q125 Growth Solid | But Shares Lag Alibaba (April 2025)

Geely (175 HK): To Be Only Comparable Competitor to BYD in 1Q25

By Ming Lu

Geely’s deliveries reached 46% of BYD in 1Q25, while the number was 23% in 2024.
The delivery growth rate accelerated since December 2024 and reached 54% YoY in March 2025.
We believe, even without production capacity expansion, BEV deliveries can grow significantly YoY in 2Q25 and 3Q25.

Tencent (700 HK): Volatility Smile Signals Strategic Opportunities in Options Trading

Implied Volatility Trends: One-month implied volatility for Tencent (700 HK) has declined from recent peaks, aligning near its 3-year median, indicating a potential stabilization in market expectations.
Skew and Term Structure Dynamics: The term structure is largely flat with a slight uplift due to the upcoming earnings on 14 May 2025. A pronounced volatility smile favors spreads.
Open Interest Distribution: Liquidity is concentrated in near-term (April, May) and quarterly expiries, with call open interest slightly outweighing puts (48-60%).

Guangzhou Xiao Noodles Catering Management Pre-IPO Tearsheet

By Troy Wong

Guangzhou Xiao Noodles Catering Management (GXNCM) is looking to raise about US$200m in its upcoming Hong Kong IPO. The deal will be run by CMBI and CLSA.
It’s a leading Chinese noodle restaurants operator in China, operating under the Xiao Noodles brand, offering value-for-money cuisines.
Under its dual model of corporate-owned and franchising, it focuses on corporate-owned restaurants in first-tier & new first-tier cities in China.

Tencent (700 HK): Top Trades and Strategic Insights from HKEX Options Trading

Over the past five trading days, Tencent (700 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.
Popular Strategies: Call/Put Spreads account for 70% of all strategies. With a bias towards bullish views, Bull Call Spreads outnumber Bear Put Spreads by 2:1.
Lottery Trades: following observations of such strategies in other stocks, a lotter trade bets on a low probability event with a high payout. Trade size tends to be sizable.

Pre-IPO Auntea Jenny (Shanghai) Industrial (PHIP Updates) – Some Points Worth the Attention

Like peers, we saw the performance growth slowdown of Auntea Jenny in 2024, mainly due to industry slowdown and intensified competition. Auntea Jenny does not have advantage in lower-tier markets.
Auntea Jenny relies on third-party suppliers, with insufficient cold chain coverage, resulting in weak cost control.It’s difficult to maintain the current profit margin level. Franchisees may be forced to quit.
Valuation of Auntea Jenny should be lower than Guming and MIXUE. Considering the weak fundamentals and uncertain outlook, it is already good if valuation could be similar to Baicha Baidao.

Monthly Chinese Express Tracker | March, Q125 Growth Solid | But Shares Lag Alibaba (April 2025)

March and Q125 parcel volume growth slowed only slightly vs strong Q424 and FY24
Single-Digit unit price declines should be manageable for most of the express companies
But express “story” generally unexciting, and most shares should continue to lag Alibaba

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Apr 28

Daily Brief China: Alibaba Group Holding , Laopu Gold, Bright Smart Securities And, SHEIN, China New Higher Education, Ping An Healthcare and Technology and more

In today’s briefing:

Alibaba (9988 HK): Top Trades and Strategic Insights from HKEX Options Trading
Alibaba (9988 HK): Volatility Surface Favoring Diagonal and Calendar Spreads
Laopu Gold (6181 HK): Global Index Inclusion Likely Derailed by Full Circulation
Ant Group Takes Out Yip’s Controlling Stake In Bright Smart (1428 HK)
Bright Smart (1428 HK): To Sell or Not to Sell?
May 1st Marks End of US “De Minimis” Exemption that Has Enabled Growth of SHEIN, Temu, & AliExpress
China New Higher Education (2001 HK): Stays Cheap at 1.7x PER and 0.3x P/B
Ping An Healthcare and Technology (1833 HK) 25Q1 Results – Concerns Behind and the Valuation Outlook

Alibaba (9988 HK): Top Trades and Strategic Insights from HKEX Options Trading

Over the past five trading days, Alibaba Group Holding (9988 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.
Diagonal Spreads account for nearly 30% of all strategies. Many of these strategies sell short term risk to finance longer term protection.
Several structures hedge against low probability tail events. One such strategy traded 100 contracts.

Alibaba (9988 HK): Volatility Surface Favoring Diagonal and Calendar Spreads

Alibaba Group Holding (9988 HK) one-month implied volatility has decreased from recent peaks but remains above the 70th percentile, while realized volatility exceeds 80% (96th percentile).
A relatively flat term structure and skew render Calendar and Diagonal Spreads interesting strategies.
Open interest extends to March 2026, with balanced call and put interest across all expiries.

Laopu Gold (6181 HK): Global Index Inclusion Likely Derailed by Full Circulation

By Brian Freitas

Laopu Gold (6181 HK) was on track to be added to a global index given its large H-share market cap and a free float that was close to 20%.
Completion of the full circulation in April pushed H-share market cap higher while free float market cap remained the same. Crucially, free float dropped below 15%.
Laopu Gold (6181 HK) could miss index inclusion in May, while inclusion in August will need some selling from non-float investors following lock-up expiry in June.

Ant Group Takes Out Yip’s Controlling Stake In Bright Smart (1428 HK)

When broker Bright Smart Securities (1428 HK) was suspended recently, one possibility was Chairman, Peter Yip Mow-lum, a 50.54% shareholder, cashing out. And that has now unfolded.
Yip has entered into a SPA with fintech giant Ant Group, the operator of Alipay. The agreement has been struck at HK$3.28/share, a 17.6% premium to undisturbed.
Should the SPA complete – the key condition is NDRC approval – an unconditional MGO is triggered, also at HK$3.28. The price is final.

Bright Smart (1428 HK): To Sell or Not to Sell?

The offer price of HK$3.28 by Ant Financial is attractive – 2.9x P/B and 8.3x PER, both on 12-month forward basis. It is also appealing relative to peers.
Bright Smart Securities (1428 HK)‘s massive outperformance against the HSI showed its strong marketing and execution capabilities. Ant Financial will bring many synergies to it.
Risk-Averse investors may take this opportunity to cash out, but we are on the long-term bull camp and prefer to hold for further upside.

May 1st Marks End of US “De Minimis” Exemption that Has Enabled Growth of SHEIN, Temu, & AliExpress

Crucial US “de minimis” imports exemption will end this Thursday night, May 1st
Beginning May 2nd, low-value direct-to-US consumer imports subject to duties, reporting
For US consumers, buying from SHEIN et al set to become more expensive, more onerous

China New Higher Education (2001 HK): Stays Cheap at 1.7x PER and 0.3x P/B

China New Higher Education (2001 HK)‘s gearing (including contract liabilities) has come down to 61.2% in 1H25, from 69.9% in FY24 and 84.1% in FY23 – an encouraging trend.
Net profit grew 8.6%, even faster than the full-year consensus forecast of 3.5% growth. There are multiple drivers that support its medium-term outlook.
CNHE trades on 1.7x PER and 0.3x P/B, but the FY25 ROE is a solid 16.6%. Should the payout ratio remain unchanged, its yield will reach 28.4%.

Ping An Healthcare and Technology (1833 HK) 25Q1 Results – Concerns Behind and the Valuation Outlook