China

In today’s briefing:

Quiddity Leaderboard CSI 300/500 Jun25: End of Reference Period Soon; ~US$6bn Total One-Way
Giant Biogene Placement – Great Track Record but Previous Deal Didn’t Do Well
StubWorld: Swire Is “Rich” To Cathay; And Cathay “Cheap” To Air China
Anta (2020 HK): Acquired Jack Wolfskin, Still Financial Momentum, Upgrade to Buy
Asia Real Estate Tracker (16-Apr-2025): Singapore’s LHN Group wants SGX listing for Coliwoo Co-Living.
CR Beverage (2460 HK): Keep Calm Heading into the Lock-Up Expiry
Canvest (1381 HK): 12th May Vote On Grandblue’s Offer
China East Education (667 HK): In an Excellent Position
Lucror Analytics – Morning Views Asia
Manycore Pre-IPO: Losses Narrowed but Future Growth May Be Lower

Quiddity Leaderboard CSI 300/500 Jun25: End of Reference Period Soon; ~US$6bn Total One-Way

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 take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
Currently, we see 6 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.

Giant Biogene Placement – Great Track Record but Previous Deal Didn’t Do Well

Giant Biogene (2367 HK) aims to raise up to US$250m via a top-up placement.
We have followed the company since listing and its recent performance has been great. Although it doesn’t seem to need the cash and the previous deal didn’t go well.
In this note, we will run the deal through our ECM framework and talk about the recent updates.

StubWorld: Swire Is “Rich” To Cathay; And Cathay “Cheap” To Air China

Swire Pacific (A) (19 HK) is coming up “rich” on my monitor vs. Cathay Pacific Airways (293 HK); and Cathay “cheap” to Air China Ltd (H) (753 HK).
Preceding my comments on Swire and Cathay 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%.

Anta (2020 HK): Acquired Jack Wolfskin, Still Financial Momentum, Upgrade to Buy

By Ming Lu

The acquisition of Jack Wolfskin means the brand portfolio strategy still works.
The financial potential is NOT as weak as the 2024 result looks.
We conclude an upside of 40% and a price target of HK$122 for the next twelve months.

Asia Real Estate Tracker (16-Apr-2025): Singapore’s LHN Group wants SGX listing for Coliwoo Co-Living.

LHN Group intends to list Coliwoo Co-Living on SGX, expanding their presence in the real estate market.
C&W reports a significant 42% drop in office rents in Hong Kong, reflecting the changing landscape post-Q1 2019.
PGIM Real Estate promotes David Fassbender to Deputy Head of APAC, indicating a shift in leadership within the company.

CR Beverage (2460 HK): Keep Calm Heading into the Lock-Up Expiry

China Resources Beverage (2460 HK) trades 4.0% below its IPO of HK$14.50 per share. The first six-month lock-up period expires on 22 April.
At the end of the first lock-up expiry, shares representing 727.1m (30.32% of outstanding) will be eligible for sale. However, there is a low risk of substantial sales.
The fundamentals remain good, with margin improvement, beverage’s fast-paced growth, narrowing of the margin gap with Nongfu and undemanding valuation.

Canvest (1381 HK): 12th May Vote On Grandblue’s Offer

On the 22 July 2024, waste-to-energy play Canvest Environmental (1381 HK)announced a pre-conditional Offer from Grandblue Environment (600323 CH) at $4.90/share (best & final), by way of a Scheme.
On the 17th March 2025, all pre-conditions were (finally) satisfied.
The Scheme Doc is now out, with a Court Meeting on the 12th May, with payment on or before the 10th June. The IFA (Somerley) says “fair & reasonable“.

China East Education (667 HK): In an Excellent Position

By Osbert Tang, CFA

China East Education (667 HK) remains well-positioned in the government’s support of vocational education, despite its YTD outperformance.
Higher average tuition per student, better cost control, accelerating growth in the “Fashion and Beauty” segment, and new course introduction are the main profit drivers.
Net cash equals 17.2% of the share price, while other peers are struggling with debt repayment. Coupled with stronger earnings CAGR, its premium PERs are justified.

Lucror Analytics – Morning Views Asia

In today’s Morning Views publication we comment on developments of the following high yield issuers: Seazen Group
In the US, the import price index slipped to negative 0.1% m-o-m (0.0% e / 0.2% revised p) in March. The index excludes tariff duties paid by importers to US Customs and Border Protection.
Long-end treasury yields fell for a second day, supported by Deputy Treasury Secretary Michael Faulkender’s statements that officials are discussing easing the supplementary lending requirements to lower the costs of trading treasuries for banks.

Manycore Pre-IPO: Losses Narrowed but Future Growth May Be Lower

By Nicholas Tan

Manycore Tech (KOOL US) is looking to raise up to US$300m in its upcoming Hong Kong IPO.
Manycore (MC) is a fast-growing, disruptive design and visualization platform powered by artificial intelligence (AI) technologies and purpose-built graphic processing unit (GPU) clusters.
In this note, we look at the firm’s past performance.

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Apr 16

Daily Brief China: Nexchip Semiconductor , Chagee Holdings, Horizon Robotics, SITC International, Emperor Intl Hldg, Country Garden Holdings Co, BenQ BM Holding Cayman Corp. and more

In today’s briefing:

CNI Semiconductor Chips Index Rebalance Preview: One Change in June
Chagee IPO: Is It Worth the Risks? Peer Comparison and Valuation Analysis.
Horizon Robotics IPO Lockup- US$7bn Expiry with Scattered Shareholding and Lots of CCASS Movement
China Pair Trade: Long SITC Intl (1308 HK), Short OOIL (316 HK)
Asia Real Estate Tracker (15-Apr-2025): HK Admiralty office floor sells at 17-year low.
Lucror Analytics – Morning Views Asia
Pre-IPO BenQ BM Holding (PHIP Updates) – Some Points Worth the Attention

CNI Semiconductor Chips Index Rebalance Preview: One Change in June

There could be one change for the CNI Semiconductor Chips Index with Nexchip Semiconductor (688249 CH) replacing Amlogic Shanghai (688099 CH) in June.
Passive trackers are estimated to buy 1.4x ADV in Nexchip Semiconductor and sell 0.8x ADV in Amlogic Shanghai. There will be buying in Semiconductor Manufacturing International Corporation (SMIC) due to capping.
The forecast add and delete have performed in line since the start of the year but there has been a move higher in the last few weeks.

Chagee IPO: Is It Worth the Risks? Peer Comparison and Valuation Analysis.

By Devi Subhakesan

Chagee Holdings (CHA US) ‘s IPO valuation discount to its peers, including HK-listed tea-beverage players as well as US-listed China-based coffee-beverage player, suggest a strong potential upside on listing.
US Investor concern over impact of tariffs and caution due to lingering memories of the Luckin Coffee scandal could translate to higher risk premium for the stock.
Expect Chagee to trade at a discount to budget beverage peers like Mixue Group (2097 HK) given its limited room for network expansion within China and likely slower overseas growth.

Horizon Robotics IPO Lockup- US$7bn Expiry with Scattered Shareholding and Lots of CCASS Movement

Horizon Robotics (9660 HK) raised around US$800m in its Hong Kong IPO in October 2024. The lockup on its pre-IPO investors is set to expire soon.
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 will talk about the lockup dynamics and possible placement.

China Pair Trade: Long SITC Intl (1308 HK), Short OOIL (316 HK)

By Osbert Tang, CFA

A “Long SITC Intl (1308 HK), Short OOIL (316 HK)” pair trade should benefit from the more resilient intra-Asia trade and capture the tariff-induced challenges on Trans-Pacific trade.
OOIL derived 28.3% of its volume and 38.7% of its revenue from the Trans-Pacific route in 1Q25. Instead, SITC generated 100% of its revenue from the Asian market.
While OOIL’s 0.7x P/B is cheaper than SITC’s 2.5x, its FY25 ROE of 10.6% is lower than SITC’s 34.6%. SITC’s dividend yield is also trending up, against OOIL’s down.

Asia Real Estate Tracker (15-Apr-2025): HK Admiralty office floor sells at 17-year low.

Hong Kong office floor in Admiralty sells at a 17-year low, reflecting challenging market conditions in the region.
Brookfield strengthens APAC logistics presence with $588M NZ joint venture, highlighting growth opportunities in the sector.
Manulife IM acquires Sydney Logistics Park from KKR and Centennial for $35M, expanding their real estate portfolio in Australia.

Lucror Analytics – Morning Views Asia

In today’s Morning Views publication we comment on developments of the following high yield issuers: Country Garden
In the US, the 1-year New York Fed inflation expectations edged up to 3.58% (3.26% e / 3.13% p).
Treasuries rallied yesterday, unwinding part of last week’s decline, after the Trump administration granted a temporary tariff reprieve on smartphones and consumer electronics.

Pre-IPO BenQ BM Holding (PHIP Updates) – Some Points Worth the Attention

The expansion space of BenQ is severely limited as the market has been saturated in Jiangsu Province. Due to DRG, future revenue/net profit growth would continue to be under pressure.
Low profit margin of general hospitals is a common problem in this industry due to pain points of business model.It’s difficult to achieve improvement.Investors need to be aware of this.
BenQ’s valuation should be lower than Hygeia due to weaker profitability, smaller revenue scale, lower growth outlook.Post-money valuation before IPO of US$375 million (or about RMB2.7 billion) is already expensive

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Apr 15

Daily Brief China: Midea Group, Chagee Holdings, Suzhou Kematek, Anjoy Foods Group, China Resources Beverage, BYD , Duality Biotherapeutics, Johnson Electric, Shanghai Fosun Pharmaceutical (Group) and more

In today’s briefing:

Midea Group (300 HK): Cornerstone Lock-Up Expiry and Upcoming Index Flows
Chagee Holdings (CHA US) IPO: Valuation Insights
CES China Semiconductor Chips Index Rebalance Preview: Multiple Adds for Some Stocks Increase Flow
Anjoy Foods (安井) A/H: Needed by Families, But Besieged by Similar Industries and Health Concerns
China Resources Beverage IPO Lockup- Cornerstones Coming Out of Lockup Ahead of the Large PE Release
Quiddity HK Connect Northbound Tracker (Q1 2025 Vs 5 Previous Quarters)
Duality Biotherapeutics (映恩生物) Trading Update
Asia Real Estate Tracker (14-Apr-2025): Emperor Group’s 62-home project in Sai Ying Pun.
Shanghai Fosun Pharmaceutical (2196 HK/600196 CH) – The Concerns Behind 2024 Results and the Outlook

Midea Group (300 HK): Cornerstone Lock-Up Expiry and Upcoming Index Flows

Midea Group listed in September 2024 by selling 650.85m shares (including the overallotment option) and raising HK$35.7bn (US$4.6bn). A large part of the offering was allocated to cornerstone investors.
Given the large company market cap and a free float that met the inclusion threshold, Midea Group (300 HK) was added to global indices via Fast Entry.
The lock-up expiry on cornerstone investors will increase the float for the stock in the global indices and Hang Seng TECH Index (HSTECH INDEX) over the next two months.

Chagee Holdings (CHA US) IPO: Valuation Insights

Chagee Holdings (CHA US), a leading premium tea drinks brand, is seeking to raise US$382-411 million through a Nasdaq IPO.
We previously discussed the IPO in Chagee Holdings (CHA US) IPO: The Bull Case and Chagee Holdings (CHA US) IPO: The Bear Case.
There are four cornerstone investors. Our valuation analysis suggests Chagee is attractively valued at the IPO price range. Therefore, we would participate in the IPO.

CES China Semiconductor Chips Index Rebalance Preview: Multiple Adds for Some Stocks Increase Flow

There could be three changes for the CES China Semiconductor Chips Index at the close of trading on 13 June.
Based on the assets tracking the index, passive trackers will need to trade between 0.1-0.4x ADV in the stocks.
Bestechnic Shanghai (688608 CH) and Suzhou Kematek (301611 CH) will also have net inflows from passive trackers of other indices at the same time, adding to the flow.

Anjoy Foods (安井) A/H: Needed by Families, But Besieged by Similar Industries and Health Concerns

By Ming Lu

A typical Chinese family needs quick-frozen foods and Anjoy is the largest producer.
Fresh foods and well-done foods compete with quick frozen foods.
Customers are concerned that producers may use too much preservative.

China Resources Beverage IPO Lockup- Cornerstones Coming Out of Lockup Ahead of the Large PE Release

China Resources Beverage (2460 HK) raised around US$750m in its Hong Kong IPO in October 2024. The lockup on its cornerstone investors is set to expire soon.
China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China and is one of the largest players in its categories.
In this note, we will talk about the lockup dynamics and possible placement.

Quiddity HK Connect Northbound Tracker (Q1 2025 Vs 5 Previous Quarters)

By Travis Lundy

Last August, the mainland exchanges stopped providing data on Northbound positions and trading. They decided to show the data once a quarter.
We decided to add a tool to the repertoire to show this past quarter’s flows per Northbound-eligible stock in a variety of ways.
Click on a name and get the quarterly chart of the desired metric (position, Flow (shares), Flow as % of float or shares out, etc)

Duality Biotherapeutics (映恩生物) Trading Update

By Ke Yan, CFA, FRM

Duality Biotherapeutics raised HKD 1,512m (USD 194m) from its global offering and will list on the Hong Kong Stock Exchange on Tuesday, April 14th.
In our previous note, we looked at the company’s business lines of ADC products and analyzed its valuation.
In this note, we provide an update for the IPO before trading debut.

Asia Real Estate Tracker (14-Apr-2025): Emperor Group’s 62-home project in Sai Ying Pun.

Emperor Group is consolidating a site in Sai Ying Pun for a 62-home project in Hong Kong, promising a significant development.
EQT has appointed a former KKR executive to take charge of their real estate operations in Japan, signaling a strategic move.
A prominent mainland tycoon has sold a condo in The Peak for $66 million, marking a significant transaction in the luxury property market.

Shanghai Fosun Pharmaceutical (2196 HK/600196 CH) – The Concerns Behind 2024 Results and the Outlook

2024 results appear to be improving, but there’s no large-scale/sustainable new increment with high certainty in revenue end.Fosun Pharma would rely on reducing costs/selling loss-making projects to recover profit/cash flow.
Financial performance in 2025 could be under pressure due to VBP. Fosun Pharm is also mired in a huge guarantee quagmire. International business expansion is facing fierce market competition.
There could be a “valuation discount” for Fosun Pharma due to the concerns on its business model and undervaluation could be a norm. Our recommendation is to invest Henlius directly.

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Apr 14

Daily Brief China: PDD Holdings, Midea Group, Tencent, China Oilfield Services H, ESR Group , Chagee Holdings, Remegen , Shandong Fengxiang, Jiangsu Zenergy Battery Technologies, Contemporary Amperex Technology (CATL) and more

In today’s briefing:

What if China ADRs Are Delisted from US Exchanges?
Midea (300 HK): IPO Lock-Up Expiry Triggers 10% Float Increase in Global Indices for May and June
HK Connect SOUTHBOUND Flows (To 11 Apr 2025); Record Net Buying
A/H Premium Tracker (To 11 Apr 2025): Sharp AH Premia Widening
Merger Arb Mondays (14 Apr) – ESR, Fengxiang, Vesync, Goldlion, Shibaura, Tsuruha/Welcia, Aeon Mall
Chagee IPO: Luckin X Starbucks of Tea. Pricing, Valuation, Key Facts & Financials
China Healthcare (Apr.13) – Trump’s Tariffs on Pharmaceuticals, NSCEB’s Report, RemeGen’s Pain Point
Fengxiang (9977 HK): PAG’s Pre-Con Offer
Jiangsu Zenergy Battery Technologies IPO Trading – Muted Overall Demand, No Stabilisation
ECM Weekly (14 Apr 2025) – Suzuki, EBOS, Hengrui Pharma, Zenergy, Chagee, LG India, Huge Dental

What if China ADRs Are Delisted from US Exchanges?

We see 281 Chinese companies listed on U.S Stock Exchanges with a total market cap of US$869bn. 32 of these companies are listed on the HKEX (388 HK).
If the rumours of Chinese stocks being delisted from U.S. Exchanges gathers steam, we could see a wave of secondary listings in Hong Kong.
PDD Holdings, Full Truck Alliance, Vipshop Holdings, TAL Education and ZEEKR are the largest China ADRs with no HK listing and could come under pressure.

Midea (300 HK): IPO Lock-Up Expiry Triggers 10% Float Increase in Global Indices for May and June

By Dimitris Ioannidis

Midea Group (300 HK) went public on HKEX on 17 September 2024 and achieved fast-entry in both global indices due to high free float and a market cap of ~$4.5bn.
The 6-month lockup on cornerstone investors expired on 17 March 2025.
The free float is forecasted to increase from ~65% to ~75% for both global indices in May and June 2025 following the lockup expiry.

HK Connect SOUTHBOUND Flows (To 11 Apr 2025); Record Net Buying

By Travis Lundy

Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. The first two weeks in April were HK$145bn.
The first two weeks in April were HK$145bn as what appeared to be national team, or equally patriotic buyers, showed up droves to buy financials, energy, telecoms, and big techs.
Included is a summary of important China Stocks-relevant news as I saw it this week, but frankly, the only thing that matters is the back and forth by the Donald.

A/H Premium Tracker (To 11 Apr 2025): Sharp AH Premia Widening

By Travis Lundy

AH Premia bounce higher. Spread curve torsion is mild given how much AH is widening again. Two weeks in a row we see a big net move.
For a month I thought warning signs were flashing and spreads could widen. They are still widening despite really big net SOUTHBOUND buying.
I expected the right thing to do was hunker down and be flat H/A risk. Hs underperformed As by 3.7% over two weeks so it’s tough to be flat enough.

Merger Arb Mondays (14 Apr) – ESR, Fengxiang, Vesync, Goldlion, Shibaura, Tsuruha/Welcia, Aeon Mall

We 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: ENN Energy (2688 HK), Insignia Financial (IFL AU), Oneconnect Financial Technology (6638 HK), Shandong Fengxiang (9977 HK), Seven & I Holdings (3382 JP), Smart Share Global (EM US).
Lowest spreads: Shibaura Electronics (6957 JP), Sinarmas Land (SML SP), Millennium & Copthorne Hotels Nz (MCK NZ), Makino Milling Machine Co (6135 JP), Spartan Resources (SPR AU).

Chagee IPO: Luckin X Starbucks of Tea. Pricing, Valuation, Key Facts & Financials

By Devi Subhakesan

Chagee Holdings (CHA US) is offering 14.68 million shares for USD26 to USD28 each to raise upto USD411 million in its initial public offering in the US.
Chagee’s premium branded teahouses blend traditional tea culture with modern, tech-driven service, distinctly setting itself apart from bubble tea kiosks.
Chagee’s IPO is priced at a discount to forward valuations of recently listed (in HK) China-based freshly brewed drinks players and leading Cafe companies.

China Healthcare (Apr.13) – Trump’s Tariffs on Pharmaceuticals, NSCEB’s Report, RemeGen’s Pain Point

Trump’s administration will soon impose tariffs on pharmaceuticals. Chinese API companies will be hit the most. Pharmaceutical companies that mainly focus on domestic market could be better investment options.
NSCEB released “Changing the Future of Biotechnology”, among which WuXi AppTec was named again. Chinese CXO’s performance this year could be lower than expected due to geopolitical conflicts.
RemeGen’s 2024 results improved, but concerns remain due to its “disorganized” pipeline layout and uncompetitive products. The reasonable market value of Remegen is about RMB10 billion to RMB15 billion.

Fengxiang (9977 HK): PAG’s Pre-Con Offer

When Shandong Fengxiang (9977 HK) was suspended last month due to the Takeovers Code, I expected PAG to launch an Offer by way of a Merger by Absorption at ~HK$2.00.
And that is exactly what unfolded. The price, which is a 33.33% premium to last close is final. 42.35% of independent H-shareholders are supportive. A scrip alternative is afforded.
PAG was permitted to take control of Fengxiang, via the domestic shares, late 2022. There will be no regulatory roadblock as PAG now seeks to privatise Fengxiang.

Jiangsu Zenergy Battery Technologies IPO Trading – Muted Overall Demand, No Stabilisation

By Akshat Shah

Jiangsu Zenergy Battery Technologies (JSZENERGY CH) raised US$130m in its Hong Kong IPO.
Zenergy is an EV and energy storage system battery manufacturer providing integrated battery solutions, encompassing battery cells, modules, packs and battery management systems dedicated to large-scale applications of electrochemical products.
We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

ECM Weekly (14 Apr 2025) – Suzuki, EBOS, Hengrui Pharma, Zenergy, Chagee, LG India, Huge Dental

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, we looked at the possible A/H premium for Jiangsu Hengrui Medicine (600276 CH), along with two live deals in Hong Kong .
On the placements front, only Suzuki Motor (7269 JP)‘s shareholders were brave enough to launch a placement in the turbulent markets.

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Apr 13

Daily Brief China: Shandong Fengxiang, Hang Seng China Enterprises Index, Hang Seng Index and more

In today’s briefing:

Fengxiang (9977 HK): PAG’s Preconditional Privatisation Offer at HK$2.00
HSCEI Index Options Weekly (Apr 7-11): Vol Reset, Skew Reprices, and 8,000 Strike in Focus
HSI Index Options Weekly (Apr 07–11): Vol Shifts and Early Signs of USD Toxicity
Hong Kong Single Stock Options Weekly (Apr 07–11): Vol Spikes, Breadth Cracks & ETF Activity Surges

Fengxiang (9977 HK): PAG’s Preconditional Privatisation Offer at HK$2.00

Shandong Fengxiang (9977 HK) has disclosed a preconditional privatisation offer from PAG, the controlling shareholder, at HK$2.00 per H share, a 33.3% premium to the undisturbed price.
The precondition relates to regulatory approvals. The key conditions for the privatisation will be approval by at least 75% independent H Shareholders (<10% of all independent H Shareholders rejection).
The shareholders with blocking stakes which have not provided irrevocables will likely be supportive as the offer is reasonable and there is a potential scrip alternative.

HSCEI Index Options Weekly (Apr 7-11): Vol Reset, Skew Reprices, and 8,000 Strike in Focus

By John Ley

Brutal start to the week, with the holiday-shortened calendar and continued global weakness weighing on Monday’s open.
Implied vol surged early, with skew steepening and tail demand reflected in out-of-the-money Put pricing
We highlight significant activity at the 8,000 strike and its implications for near-term spot and vol dynamics.

HSI Index Options Weekly (Apr 07–11): Vol Shifts and Early Signs of USD Toxicity

By John Ley

A volatile week for HSI, with sharp moves in price, volume, and implied volatility concentrated around Monday’s gap lower.
We discuss the shift in spot-vol dynamics and how it may influence short-term vol trading.
Changes in open interest and vol structure are examined in the context of ongoing global tensions.

Hong Kong Single Stock Options Weekly (Apr 07–11): Vol Spikes, Breadth Cracks & ETF Activity Surges

By John Ley

A challenging week for HK single stocks, with weak breadth and sharp losses punctuated by a gap lower to start the week.
Monday marked the highest options volume day of the year, with a spike in the Put/Call ratio and unusual ETF option activity.
Implied vols surged, with the average implied vol percentile at very elevated levels.

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Apr 12

Daily Brief China: Jiaxin International Resources Investment Limited, Longfor Properties and more

In today’s briefing:

Jiaxin International Resources Investment Limited Pre-IPO Tearsheet
Lucror Analytics – Morning Views Asia

Jiaxin International Resources Investment Limited Pre-IPO Tearsheet

By Troy Wong

Jiaxin International Resources Investment Limited (JIRI) is looking to raise about US$140m in its upcoming Hong Kong IPO. The deal will be run by CICC.
It’s a pre-revenue tungsten mining company with the world’s largest open-pit tungsten mine in terms of mineral resources of tungsten trioxide (WO3) in 2024, as per Frost & Sullivan (F&S).
Mining operation is conducted by a local subsidiary while JIRI is responsible for the processing operation and sales of the product to its customers.

Lucror Analytics – Morning Views Asia

In today’s Morning Views publication we comment on developments of the following high yield issuers: Longfor Group, Sunny Optical, Greentown China
In the US, the March CPI came in below estimates at negative 0.1% m-o-m (0.1% e / 0.2% p) and 2.4% y-o-y (2.5% e / 2.8% p). This was driven by lower energy costs, as well as a decline in discretionary spending such as airfares, used vehicles and hotels. Core CPI (excluding food and energy) slowed to 0.1% m-o-m (0.3% e / 0.2% p) and 2.8% y-o-y (3.0% e / 3.1% p).
The White House has clarified that US President Donald Trump’s total tariffs on Chinese imports stands at 145%, comprising a 125% reciprocal tariff rate on top of the existing 20% duty imposed earlier in February and March.

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Apr 11

Daily Brief China: Goldlion Holdings, Huge Dental, Lenovo, Chagee Holdings, BYD, Meituan, Oriental Watch, Goodman Group, Anta Sports Products and more

In today’s briefing:

Goldlion Holdings (533 HK): An Attractive Spread Ahead of the Vote on 9 May
Goldlion Holdings (533 HK): 9th May Vote On Tsang Family’s Offer
Huge Dental Pre-IPO – China’s Leading Dental Materials Player Rides Industry Tailwinds
PC 1Q25: 5% YoY Growth but Shipments Inflated Ahead of US Tariffs. Dream of a Refresh Cycle Continue
Chagee Holdings IPO Valuation Analysis
[BYD Company (1211 HK, BUY, TP HK$400) TP Change]: Better than Expected ASP Is the Positive Surprise
Lucror Analytics – Morning Views Asia
Oriental Watch (398 HK): Navigating a Tough Demand Environment With 65% of Market Cap in Cash
Asia Real Estate Tracker (10-Apr-2025): Goodman investing $722M in Sydney data centre
Anta Sports (2020 HK): 1Q25 Stable, yet the Margin Remains Our Concern

Goldlion Holdings (533 HK): An Attractive Spread Ahead of the Vote on 9 May

Goldlion Holdings (533 HK)’s IFA considers Mr Tsang’s HK$1.5232 per share offer fair and reasonable. The vote is on 9 May.
The key condition is the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). FMR holds a blocking stake but should be supportive.
The offer is reasonable compared to peer multiples and historical trading ranges. At the last close and for the 10 July payment, the gross/annualised spread is 4.3%/19.0%.

Goldlion Holdings (533 HK): 9th May Vote On Tsang Family’s Offer

On the 17th December 2024, Goldlion Holdings (533 HK), an apparel manufacturer/distributor, announced an Offer, by way of a Scheme, from the Tsang family (2.95% stakeholder), for shares not held.
The Tangs are offerings $1.5232/share (declared final), a 24.85% premium to last price, but a 71% premium to undisturbed. Despite the very low price-to-book multiple, this transaction looks done.
The Scheme Doc is now out, with a Court Meeting on the 9th May, with payment on or before the 10th July. The IFA (Altus Capital) says “fair & reasonable“.

Huge Dental Pre-IPO – China’s Leading Dental Materials Player Rides Industry Tailwinds

By Troy Wong

HD as a leading dental materials player in China, has achieved robust topline growth over the track record period, driven by its core product lines and favorable industry tailwinds
The company generates most of its revenue from the Chinese market, relying heavily on a distribution-led strategy for market expansion.
Some areas of concern include signs of a slowdown in growth and potential margin compression if the shift in product mix continues.

PC 1Q25: 5% YoY Growth but Shipments Inflated Ahead of US Tariffs. Dream of a Refresh Cycle Continue

By Nicolas Baratte

PC units grew by 1% in 2024, accelerating to 5% YoY in 1Q25. Best performers: Apple, Lenovo. Higher shipments to the US ahead of potential import tariffs but flat end-demand.
~70% of Computers are Made in China, US consumes 25% of total PC. The supply chain is accelerating relocating US-purchased PC out of China, this should be done by end-2025.
There is a risk of over-built and over-stocking in my view if PC Brands are too optimistic on Windows 10 end-of-support and AI PC upgrades.

Chagee Holdings IPO Valuation Analysis

By Douglas Kim

Our base case valuation of Chagee Holdings is target price of $46.7 per share, representing 67% higher than the high end of the IPO price range ($28 per share).
Our base case valuation is based on a P/E of 21.4x on our estimated net profit of 2.9 billion RMB in 2025.
We used a very conservative valuation multiple, mainly due to the extremely high macro risks related to the ongoing tariff dispute between China and the United States.

[BYD Company (1211 HK, BUY, TP HK$400) TP Change]: Better than Expected ASP Is the Positive Surprise

By Eric Wen

BYD reported C1Q25 net profit up 86%-119% YoY, with the midpoint exceeds our estimate/consensus by 12%/20%.
We believe this driven by better ASP mix of its products, among other factors;
We believe a possible China-EU deal on EV market access can be positive for BYD. We raise the TP to HK$400 and place BYD back to TOB BUY.

Lucror Analytics – Morning Views Asia

By Trung Nguyen

In today’s Morning Views publication we comment on developments of the following high yield issuers: Meituan, China Jinmao, Lenovo, AAC Technologies, China Hongqiao
US President Donald Trump has announced on Truth Social a 90-day pause on reciprocal tariffs for more than 75 countries, with these countries to be charged a “substantially lowered reciprocal tariff” of 10% during this transition.
That said, Mr Trump raised tariffs on China to 125% (from 104%), after China raised its own tariffs on US imports to 84% (from 34%) in a retaliatory move earlier yesterday.

Oriental Watch (398 HK): Navigating a Tough Demand Environment With 65% of Market Cap in Cash

By Sameer Taneja

Oriental Watch (398 HK) is navigating a challenging demand environment with Watch & Jewelry sales in HK subdued at -21% YoY for Jan-Feb 2025, according to the Department of Statistics.
The bright spot is that China sales continue to hold up and account for more than 73% of the company’s sales. Fortunately, Rolex could also increase its allocation to China.
We expect a 15%-20% YoY drop in FY25 profits. A 100% payout results in a 12.0% dividend yield, and 65% of the market capitalization is in cash.

Asia Real Estate Tracker (10-Apr-2025): Goodman investing $722M in Sydney data centre

Goodman announces $722M investment in 90MW data centre ‘Project Mars’ in Sydney, expanding their data centre portfolio.
Executives from Partners Group, CDPQ, and ESR join the speaker list for Singapore Forum, a key event in the data centre industry.
Singapore’s GIC collaborates with Alianza in a $329M venture to establish a data centre presence in Brazil, a promising market.

Anta Sports (2020 HK): 1Q25 Stable, yet the Margin Remains Our Concern

By Osbert Tang, CFA

1Q25 sales for Anta Sports Products (2020 HK) continue the trend in 4Q24, with ANTA and FILA brands recording a healthy high-single-digit YoY increase.
With the US-China trade war, the negative impact on consumer appetite is uncertain. It is difficult to project the 2Q-4Q25 revenue and margin outlook.
Its associate, Amer Sports (AS US), has 36% of revenue from the Americas, while the Jack Wolfskin acquisition has limited contribution. Its 50% premium to sector caps upside.

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Apr 10

Daily Brief China: CK Hutchison Holdings, HKBN Ltd, Shanghai Shenzhen CSI 300 Index, Jinhong Gas , Jiangsu Hengrui Medicine, Semiconductor Manufacturing International Corp (SMIC), Greentown China and more

In today’s briefing:

CK Hutch (1 HK): Back To Square One
HKBN (1310 HK): China Mobile Agrees to Acquire TPG’s Stake
China ETF Inflows & Implications: Central Huijin’s Huge Buying
STAR Chip Index Rebalance Preview: Potential Changes in June
Jiangsu Hengrui Pharma A/H Listing – Recent Updates and Thoughts on A/H Premium
HKBN (1310 HK): TPG Cashes In Early
Semiconductors and AI Servers in China
Lucror Analytics – Morning Views Asia

CK Hutch (1 HK): Back To Square One

The irony is that CKH (1 HK)‘s Panama-port sale was probably prompted, at least in part, by a desire to get out of a situation which was becoming increasingly political.
Instead, it has thrust the company right into the heart of it. And the share price has now given up all of its initial gains. And then some.
After Panama’s Attorney General recently determined CK Hutchison’s concessions were unconstitutional, the Comptroller-General has now announced that an audit had found “many breaches” of the concession.

HKBN (1310 HK): China Mobile Agrees to Acquire TPG’s Stake

China Mobile (941 HK) has entered a share purchase agreement to acquire TPG’s HKBN Ltd (1310 HK) shares and vendor loan note conversion shares by 28 November.
On completion, TPG will be released from its irrevocable, which has a competing offer clause. China Mobile’s agreement signals its expectation that I Squared will launch a competing proposal.
The agreement will not change I Squared’s approach as it would not negatively impact regulatory approvals (a key risk) or prevent it from meeting a 50% minimum tendering condition.

China ETF Inflows & Implications: Central Huijin’s Huge Buying

Nearly US$22bn has flowed into mainland China listed ETFs over the last 3 trading days, reversing outflows that started in mid February.
Central Huijin has announced that it will be increasing its ETF holdings to maintain smooth operation of China’s capital markets. The rest of the National Team will be buying too.
There are multiple implications of the huge ETF creations in a short time frame and a reversal of flows will lead to a reversion in a bunch of trades.

STAR Chip Index Rebalance Preview: Potential Changes in June

There could be 1 constituent change for the STAR Chip Index at the June rebalance. There will also be a few capping changes.
Estimated one-way turnover is 2.1% resulting in a round-trip trade of CNY 1.04bn (US$141m). Passives need to trade between 0.65-1.65x ADV in the potential changes.
Jinhong Gas (688106 CH) is also a potential delete from the STAR100 Index and that will lead to increased passive selling in the stock.

Jiangsu Hengrui Pharma A/H Listing – Recent Updates and Thoughts on A/H Premium

Jiangsu Hengrui Medicine (600276 CH) (JHP), a China-based pharmaceutical company, aims to raise around US$2bn in its H-share listing.
JHP has been ranked as one of the global Top 50 pharmaceutical companies by Pharm Exec for six consecutive years since 2019.
We have looked at the company’s past performance in our previous note. In this note, we talk about the recent updates and provide our thoughts on the possible A/H premium.

HKBN (1310 HK): TPG Cashes In Early

Back in December, China Mobile (941 HK) made a pre-conditional HK$5.23/share voluntary Offer for HKBN (1310 HK). The wild card is whether I Squared launches a counter-proposal.
This transaction has no shortage of intriguing developments. Last month, MBK mysteriously converted its VLNs. Now TPG has entered into an SPA with Mobile to sell its 15.46% stake.
IF I Squared were to make a counter-proposal, I doubt it would secure the necessary regulatory approvals. Evidently TPG is not waiting around to find out.

Semiconductors and AI Servers in China

By Nicolas Baratte

Semiconductors and AI chips have become a geopolitical tool, between the US and China but also between the US and the Rest of the World (Biden’s Jan-25 limitations by country).
This has led to an increase in Chinese R&D in Semiconductors since 2020. In particular 3 areas: AI chips, production equipment, small geometries below 7nm. This article reviews recent announcements.
Rush orders for Nvidia H20 GPU since Jan-25. Loongsoon breakthru AI chip. SMIC starting 5nm production in 2025. SiCarrier announced EUV lithography machine.

Lucror Analytics – Morning Views Asia

In today’s Morning Views publication we comment on developments of the following high yield issuers: Greentown China
In the US, the NFIB small business optimism index declined to 97.4 (99.0 e / 100.7 p), just below the 51-year average of 98.
US President Donald Trump’s tariffs are set to take effect from midnight ET today, according to the US Customs and Border Protection.

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Apr 09

Daily Brief China: Bestechnic Shanghai , Duality Biotherapeutics, Jiangsu Zenergy Battery Technologies, Beijing Yunji Technology Ltd, Yuexiu Property , Mixue Group and more

In today’s briefing:

STAR50/STAR100 Index Rebalance Preview: Central Huijin’s ETF Creations Skew Performance
Duality Biotherapeutics (映恩生物) IPO: Valuation Upside at Risk
Jiangsu Zenergy Battery Tech IPO: Forecasts and Valuation
Beijing Yunji Technology Ltd Pre-IPO Tearsheet
Lucror Analytics – Morning Views Asia
Mixue Group (2097 HK) – Updates on Valuation Outlook and Growth Forecast Based on 2024 Results

STAR50/STAR100 Index Rebalance Preview: Central Huijin’s ETF Creations Skew Performance

By Shifara Samsudeen, FCMA, CGMA

Nearing the end of the review period, we forecast 1 change for the SSE STAR50 (STAR50 INDEX) and 4 changes for the STAR100 Index in June.
We estimate turnover of 1.9% for the SSE STAR50 (STAR50 INDEX) and 4.5% for the STAR100 Index. The estimated round-trip trade is CNY 7.5bn (US$1.02bn).
Large ETF inflows could have led to the recent underperformance of a long add/ short delete trade. That could reverse once markets stabilize or when the passives trade the rebalance.

Duality Biotherapeutics (映恩生物) IPO: Valuation Upside at Risk

By Ke Yan, CFA, FRM

Duality, a China-based clinical-stage biotechnology company, launched its IPO to raise up to US$200m via a Hong Kong listing.
We look at the deal dynamics and latest developments in the biotech sector.
The deal initially presented upside for investors but there’s a portion of its valuation now at risk due to the latest development.

Jiangsu Zenergy Battery Tech IPO: Forecasts and Valuation

Jiangsu Zenergy Battery Technologies (JSZENERGY CH) has announced the terms for its IPO. The company plans to issue 121.5m shares at HK$8.27 per share, raising HK$1.0bn (US$130m).
The company’s earnings have seen strong growth during the last 3-4 years driven by its LFP battery products and fall in lithium carbonate prices have helped turn around profitability.
However, our analysis on the company’s valuation shows that JZBT’s IPO is expensive and with the ongoing geopolitical tensions, we would remain on the sidelines.

Beijing Yunji Technology Ltd Pre-IPO Tearsheet

By Rosita Fernandes

Beijing Yunji Technology Ltd (1860671D CH) (BYTL) is planning to raise about US$100m through its upcoming Hong Kong IPO. The lead bookrunners for the deal are Citic, CBB International.
BYTL provides hospitality robotic AI agents, using advanced robotics and AI to enhance customer experiences. Its solutions include physical-interaction robots and AI-driven digitalization systems for streamlined decision-making and operational efficiency.
According to the F&S Report, BYTL ranked first globally in 2024 among robotic AI agent companies with multi-layer adaptable robots, leading in concurrent robot operations and total consumers served.

Lucror Analytics – Morning Views Asia

In today’s Morning Views publication we comment on developments of the following high yield issuers: Yuexiu Property, Tata Motors, Softbank Group
US President Donald Trump wrote on Truth Social that Washington will impose an additional 50% tariff on China effective April 9th, if Beijing does not back down from its 34% retaliatory tariffs.
Mr Trump’s post also stated that the US will terminate all talks with China, while commencing negotiations with other countries. Separately, the President told reporters at the White House that he was not looking at a pause on tariffs, but added that “many countries” were seeking negotiations and there would be fair deals in certain cases.

Mixue Group (2097 HK) – Updates on Valuation Outlook and Growth Forecast Based on 2024 Results

Revenue growth of MIXUE in 2024 was the lowest in recent three year but is still higher than competitors.Together with higher profit margin, MIXUE’s valuation should be higher than peers.
Based on 2024 results, we adjusted our forecast for the next three years. Declining performance growth is inevitable, but successful internationalization helps reassure its high growth outlook in the future
Due to concerns, investors need to pay attention to the performance verification.If 2025H1 net profit growth is significantly lower than 30% YoY, investors should be alert to a potential correction.

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Apr 08

Daily Brief China: ESR Group , Shanghai Shenzhen CSI 300 Index, Chagee Holdings, Jiangsu Hengrui Pharmaceuticals, FWD Group Holdings, Jiangsu Zenergy Battery Technologies and more

In today’s briefing:

HK Merger Arb: Opportunities Amidst the Market Selloff
CSI 300 Index Outlook After Trump’s Threat of 50% Tariff on China
Chagee (霸王茶姬) Pre-IPO: Very Few Exact Competitors – A Viewpoint on the Ground
Hong Kong Arbs: (Largely) Immune From Trump Tariffs
Hengrui (恒瑞医药) A/H Listing: An Updated Comparison with Hansoh
FWD: An Ideal Acquisition Target for Korean Insurers?
Jiangsu Zenergy Battery Technologies IPO – PHIP Updates & Quick Thoughts on Peer Comp and Valuation

HK Merger Arb: Opportunities Amidst the Market Selloff

The gross spreads of large HK merger arb situations have increased due to the unfortunate fallout from Trump’s trade war. The HSI closed down 13.2%.
We assess the widening spreads of HK’s merger arb situations based on offer structure, preconditions, conditions, and other factors.
The deals, ranked in terms of increasing deal risk, are Tam Jai, Soundwill, Vesync, Goldlion, Canvest, ESR, OneConnect, HKBN, and ENN Energy.

CSI 300 Index Outlook After Trump’s Threat of 50% Tariff on China

By Nico Rosti

The Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX EQUITY) was less impacted than other indices by the global sell-off: on Monday it was down only -10% from the recent top.
On Monday Donald Trump posted that if China does not withdraw immediately its +34% tariffs increase, the United States will impose ADDITIONAL Tariffs on China of +50%, effective April 9th!
Although the CSI 300 Index is more insulated than other indices from global market volatility, it is not completely immune and remains vulnerable to the impact of US’s tariff threats.

Chagee (霸王茶姬) Pre-IPO: Very Few Exact Competitors – A Viewpoint on the Ground

By Ming Lu

Chagee is the No. 6 largest teahouse chain in China according to store number.
Very few teahouses have a per customer transaction higher than Chagee.
We believe Chagee has advantages in the high price market.

Hong Kong Arbs: (Largely) Immune From Trump Tariffs