China

In today’s briefing:

HKBN (1310 HK): Another Sing Tao Article as Speculation Swirls on MBK’s Loan Notes Conversion
Fengxiang (9977 HK): Privatisation by PAG?
Canvest (1381 HK): Precondition Satisfied
Quiddity Leaderboard HSTECH Jun25: US$204mn One-Way; No Index Changes Likely
Quiddity Leaderboard HSIII Jun25/Sep25: Capping Flows in June and Index Changes in September
Ping An Insurance (2318 HK): 2024 Earnings, Divergence Between Option-Implied And Historic Move
Quiddity Leaderboard HSCEI Jun25: Large Price Swings Needed to Trigger Index Changes
Hong Kong Single Stock Options Weekly (March 10 – 14): Sentiment Shifts, Option Volumes Cool
WuXi AppTec (2359 HK): In-Line 2024 Performance; Announces Dividend and A Share Buyback Plan
IRGMA Raises Alarm Over Dumping Of Inferior Gloves Into India

HKBN (1310 HK): Another Sing Tao Article as Speculation Swirls on MBK’s Loan Notes Conversion

A new Sing Tao Daily article on HKBN Ltd (1310 HK) claims that China Mobile (941 HK)’s offer is a stalemate, and a potential I Squared offer faces regulatory challenges.
The article is being unduly alarmist. The concerns raised on the China Mobile offer remain premature, and there remains a medium-to-high probability of a competing offer from I Squared.
Last Friday, MBK converted its vendor loan notes (VLN) into shares, which could signal that an I Squared competing offer is imminent.

Fengxiang (9977 HK): Privatisation by PAG?

Shandong Fengxiang (9977 HK) entered a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers.” PAG, the controlling shareholder, likely aims to privatise Fengxiang.
The offer will likely be structured as a privatisation by merger by absorption requiring approval by at least 75% of independent H Shareholders (<10% of all independent H Shareholders rejection).
The presence of several substantial shareholders necessitates a reasonable offer. An offer of HK$1.80-2.00 (a 21%—33% premium to the last close) could win over these shareholders’ backing.

Canvest (1381 HK): Precondition Satisfied

Grandblue Environment Co A (600323 CH) has satisfied the precondition related to its privatisation offer for Canvest Environmental Protection Group (1381 HK).
The offer remains attractive despite the re-rating of peers since announcing the deal. The vote risk is low as the two shareholders holding blocking stakes will be supportive.
This is a done deal. At the last close, the gross/annualised spread for a mid-June payment is 3.8%/13.0%.

Quiddity Leaderboard HSTECH Jun25: US$204mn One-Way; No Index Changes Likely

By Janaghan Jeyakumar, CFA

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 rankings of potential ADDs and potential DELs for the June 2025 index rebal event.
We see zero index changes based on the latest available data but we estimate there to be US$204mn one-way flows due to capping.

Quiddity Leaderboard HSIII Jun25/Sep25: Capping Flows in June and Index Changes in September

By Janaghan Jeyakumar, CFA

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 our capping flow expectations for the June 2025 index rebal event.
We have also presented our index change expectations for the next semiannual index review which will take place in September 2025 (regular ADDs/DELs only take place in March and September).

Ping An Insurance (2318 HK): 2024 Earnings, Divergence Between Option-Implied And Historic Move

Ping An Insurance (2318 HK / 601318 CH) is set to announce Annual 2024 Results on 19 March 2025.
Option markets are currently pricing in a significantly larger post-announcement price move than historical patterns would suggest.
Two trade examples for calendar spreads, taking advantage of elevated near-term implied volatility, are presented.

Quiddity Leaderboard HSCEI Jun25: Large Price Swings Needed to Trigger Index Changes

By Janaghan Jeyakumar, CFA

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 rankings of potential ADDs and potential DELs for the June 2025 index rebal event.
We see no index changes based on the latest available data. However, there will be some flows in June 2025 due to capping.

Hong Kong Single Stock Options Weekly (March 10 – 14): Sentiment Shifts, Option Volumes Cool

Market sentiment shifted again this week, with participation in stock gains dropping sharply from last week’s levels.
Option volumes continued to decline from February peaks, though single stocks saw a notable increase in activity on Friday.
We cover stocks with liquid options that have earnings reports in the coming week.

WuXi AppTec (2359 HK): In-Line 2024 Performance; Announces Dividend and A Share Buyback Plan

By Tina Banerjee

WuXi AppTec (2359 HK) has reported 2024 result, with revenue reaching RMB39.2M, in-line with guidance of RMB38.3–40.5B. Excluding Covid-19 commercial project, 2024 revenue represents 5% YoY growth.
The company has announced a cash dividend of RMB9.8 and a special dividend of RMB3.5 for every 10 shares. Wuxi AppTech has also proposed RMB 1B buyback plan (for A-shares).
Based on the current backlog, Wuxi AppTech expects continuing operations revenue to resume double-digit growth of 10–15% YoY in 2025, targeting to deliver a total revenue of RMB41.5–43.0B.

IRGMA Raises Alarm Over Dumping Of Inferior Gloves Into India

By Vinod Nedumudy

Dumping of gloves from Malaysia, Thailand, Vietnam into India alleged
IRGMA petitions Indian Government for intervention to stop
DGTR recommends ADD on imports of titanium dioxide from China

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Mar 17

Daily Brief China: CK Hutchison Holdings, Tencent, HKBN Ltd, Xiaomi Corp, Great Wall Motor, Zai Lab , Ping An Healthcare and Technology, Hang Seng Index and more

In today’s briefing:

CK Hutchison (1 HK): Political Turbulence
Tencent (700 HK): Expected Move on Profit Announcement and Option Insights
HKBN (1310 HK): MBK Ups Stake Via VLN Conversion
HK Connect SOUTHBOUND Flows (To 14 Mar 2025); Big Volumes, Big Net; Tech and Banks Still Leading
Xiaomi (1810 HK): Overpriced Volatility Ahead of 2024 Results
A/H Premium Tracker (To 14 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening
China Healtchare Weely (Mar.16) – 2025 VBP Instructions, GLP-1s Cooling Down, Zai Lab’s Headwinds
Xiaomi Earnings: Option Market Expectations, Past Performance and Hedge Opportunities
Ping An Healthcare and Technology (1833 HK) – Updates on Performance Forecast and Valuation Outlook
HSI Index Options Weekly (March 10-14): Flat Week but Still and Strong Relative Performer

CK Hutchison (1 HK): Political Turbulence

On 13 March, Ta Kung Pao, a Hong Kong newspaper owned by the Chinese government and Communist Party, denounced CK Hutchison Holdings (1 HK)’s planned port transaction.
The opinion piece is mainly political rhetoric, as even if China managed to block the deal, it would still not address the underlying concerns expressed in the article.
In the near term, the shares will likely be under pressure from a nationalistic backlash. Nevertheless, deal or no deal, the valuation remains undemanding.

Tencent (700 HK): Expected Move on Profit Announcement and Option Insights

Tencent (700 HK) / Tencent Holdings (ADR) (TCEHY US) is set to announce Annual 2024 Results on 19 March 2025.
Options pricing implies a 4-6% move after earnings, significantly higher than historical patterns. From an options perspective, calendar spreads offer opportunities.
Tencent‘s significant index weighting, around 8% in key Hong Kong indices, means its earnings has the potential to impact broader market performance.

HKBN (1310 HK): MBK Ups Stake Via VLN Conversion

China Mobile (941 HK) has made a pre-conditional HK$5.23/share voluntary Offer for HKBN Ltd (1310 HK). However, a possible separate Offer from I Squared continues to make the news.
In an unusual move, MBK, via Twin Holding, has converted HK$970.5mn of VLNs, at a whopping HK$11.60/share conversion price, lifting MBK’s stake to 16.39% on a fully diluted basis.
Speculation is rife that MBK provides an irrevocable to I Squared for its enlarged shareholding. Maybe. I still don’t see China supporting a U.S.-based infrastructure firm over an SOE .

HK Connect SOUTHBOUND Flows (To 14 Mar 2025); Big Volumes, Big Net; Tech and Banks Still Leading

Gross SOUTHBOUND volumes dropped again somewhat but still high at HK$625bn. NET buying by SOUTHBOUND was HK$61bn which is HUGE.
The flows here are still striking. >25% of the top 100 most liquid Southbound eligible stocks saw SOUTHBOUND buy more than 10% of weekly traded volume to March 12.
A summary of important China-related stock news as I saw it this week is included.

Xiaomi (1810 HK): Overpriced Volatility Ahead of 2024 Results

Xiaomi Corp (1810 HK) is set to announce 2024 results after the close on 18 March.
Options markets imply a price movement in excess of historic averages, creating trading opportunities through calendar spreads and short straddles that capitalize on March’s elevated implied volatility.
Xiaomi Corp (1810 HK) is a major constituent in key Hong Kong indices (HSI Index, HSCEI Index, and HSTECH Index). Its post-results move will likely impact the broader market.

A/H Premium Tracker (To 14 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening

AH Premia continue to fall. Spread curve torsion was a barbell this week. Narrow and wide spreads see Hs outperform. Middling spreads outperform less.
To me, warning signs are flashing on spreads. They are at their narrowest in 5yrs and they are volatile, though volatility is coming down.
Lots of spreads see the HA premium less than 15%. That is historically tight.

China Healtchare Weely (Mar.16) – 2025 VBP Instructions, GLP-1s Cooling Down, Zai Lab’s Headwinds

The NHSA has issued clear instructions for VBP in 2025, including two batches of national VBP of drugs and one batch of medical consumables VBP. TCM will also be included.
The sales growth of GLP-1s has entered a turning point, it will be far from the previously high expectations. The actual market size of GLP-1s could be only US$100 billion.
Rapid sales growth of Efgartigimod is the key factor for Zai Lab to narrow the losses.But whether it can be breakeven relies on the decline of cost/expenses, not revenue growth.

Xiaomi Earnings: Option Market Expectations, Past Performance and Hedge Opportunities

Xiaomi earnings are upcoming. We analyze what the options market is pricing and examine historical trends and tendencies.
Historical earnings reactions show notable differences across quarters, with Q4 standing out for its downside risk.
We outline a tactical hedge that minimizes jump risk while taking advantage of extended implied volatility.

Ping An Healthcare and Technology (1833 HK) – Updates on Performance Forecast and Valuation Outlook

PAGD’s 2024 performance beat expectations. The support of Ping An Group remains the key for PAGD to turning losses into profits. A breakthrough point is the Senior care services business.
The CAGR of PAGD’s revenue could be 12%-15% from 2025 to 2027, and revenue in 2027 may reach RMB6.5-7 billion. The peak revenue scale could be just about RMB8 billion.
Adjusted net profit could reach RMB250-300 million in 2025 and exceed RMB400 million in 2027.If based on P/S of 2-3x, revenue of RMB6.5-7 billion in 2027, valuation is RMB13-21 billion.

HSI Index Options Weekly (March 10-14): Flat Week but Still and Strong Relative Performer

We look into whether long or short volatility strategies on the HSI have been the most effective.
Implied volatility remained under pressure as muted trading and weak price action weighed on implied volatility.
Despite finishing lower, HSI remained a strong relative performer among global indexes, particularly against SPX.

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Mar 15

Daily Brief China: Tencent, Bama Tea, Duality Biotherapeutics, New World Development, Zhipu AI and more

In today’s briefing:

Dividends, Volatility, and Profits: HSI and HSCEI Heavyweights Reveal Results, 17 – 21 March
Bama Tea Pre-IPO – Fourth Attempt to Go Public
Duality Biotherapeutics (映恩生物) Pre-IPO: PHIP Updates Show Slight Improvements
Lucror Analytics – Morning Views Asia
Chinese Startup Zhipu AI Raises $207 Million Funding in Less Than a Month

Dividends, Volatility, and Profits: HSI and HSCEI Heavyweights Reveal Results, 17 – 21 March

Over a dozen Hang Seng Index companies (31% of index weight) report next week, along with significant portions of HSCEI (38%) and Hang Seng TECH Index (32%) components.
The four index heavy-weights Xiaomi Corp, Tencent, China Mobile, and Meituan all report next week.
Weekly options expiring March 21 provide targeted instruments for traders looking to capitalize on earnings-related price movements.

Bama Tea Pre-IPO – Fourth Attempt to Go Public

By Troy Wong

Bama Tea (BT) is looking to raise at least US$100m in its upcoming Hong Kong IPO.
BT mainly grew through franchising. Its broad portfolio boosts market reach. A shift to online sales and stable tea prices may improve gross margins.
BT needs capital for expansion but faces challenges: a fragmented, slow-growing industry, declining franchise earnings, weak 9M24 tea-leaf sales, supplier/customer concentration, and this being BT’s fourth attempt at going public.

Duality Biotherapeutics (映恩生物) Pre-IPO: PHIP Updates Show Slight Improvements

By Ke Yan, CFA, FRM

Duality Biotherapeutics, a China-based clinical-stage biotechnology company, plans to raise up to US$300m via a Hong Kong listing.
The company has passed the hearing for the listing and filed a new version of the prospectus.
We look at the difference between previous filing and current filing.

Lucror Analytics – Morning Views Asia

In today’s Morning Views publication we comment on developments of the following high yield issuers: New World Development
In the US, the February final demand PPI came in lower than expected at 0.0% m-o-m (0.3% e / 0.6% revised p) and 3.2% y-o-y (3.3% e / 3.7% revised p). PPI excluding food and energy fell 0.1% m-o-m, but was up 3.4% y-o-y (3.5% e / 3.8% revised p).
The PPI was weighed down by a 1% decline in trade services. That said, categories that go into the PCE price index (the Fed’s preferred measure of inflation) were largely firmer, which could contribute to a high PCE print (vs. the CPI) later this month.

Chinese Startup Zhipu AI Raises $207 Million Funding in Less Than a Month

By Caixin Global

Zhipu AI, a leading Chinese generative artificial intelligence (AI) start-up, has raised 500 million yuan ($69 million) in new funding less than a month after securing 1 billion yuan ($138 million) in its previous round.
On Thursday, Huafa Group, a conglomerate backed by the Zhuhai city government in Guangdong province, announced its investment in Zhipu AI, to drive technical innovation and business development for Zhipu’s foundation model, GLM.
The same day, Huafa and the Zhuhai National High-Tech Industrial Development Zone signed a cooperation agreement with Zhipu to speed up the industrial application of its AI models.

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Mar 14

Daily Brief China: Tencent, CK Hutchison Holdings, BYD, Xiangtan Electric Manufacturing Co,Ltd., AIA Group Ltd, Hang Seng Index, Baidu, Silergy Corp, Salter Brothers Emerging Cos L, Kanzhun and more

In today’s briefing:

Asian Equities: Valuation Mean Reversion – The Winners and Losers
CK Hutch (1 HK): Still Trading Cheap
BYD (1211 HK) 2024 Result Preview: Expanding in Domestic Market and 19% Upside Left
CSI 1000 Index Rebalance Preview: US$3.7bn Trade; Adds Outperform as ETFs Face Redemptions
AIA Group (1299 HK) Results Day: Expected Price Swings and Dividend Boost
HSI Outpaces SPX — Structural Break or Head Fake? Strategies for Hedging
[Baidu, Inc. (BIDU US, SELL, TP US$92.5) TP Change]: What Can Change BIDU from SELL to a BUY?
Silergy (6147.TT): 1Q25 Outlook Sales: Down QoQ but up QoQ. 2025 Outlook Sales: Up 20-30% YoY.
Asia Real Estate Tracker (13-Mar-2025): Mitsui AM buys 50% of Tokyo Data Centre for $120M.
[Kanzhun (BZ US, BUY, TP US$20) TP Change]: Catalysts from Robust Post CNY Hiring and AI Initiative

Asian Equities: Valuation Mean Reversion – The Winners and Losers

By Manishi Raychaudhuri

Valuations across Asia are mean reverting – expensive markets derating and the cheap ones rerating. We think this is likely to continue somewhat longer.
We think HK/China could rerate more; India and Taiwan could derate slightly further. India looks interesting. Valuation range has structurally shifted upwards. But another 5-10% relative valuation correction is warranted.
Principal stock choices in HK/China, Korea and India pertain to themes of domestic consumption, AI resilience and unloved sectors. Some of the companies have mitigating strategies for the tariff war.

CK Hutch (1 HK): Still Trading Cheap

To avoid a political landmine, on the 4th March CK Hutchison Holdings (1 HK) announced a deal with Blackrock to offload its entire port ops, including the contentious Panama ports.
It’s an astute deal selling to a buyer, ostensibly backed by the Trump administration, at the top of the market, knowing global trade could fall under a new tariff regime.
The risk to the transaction is one of timing. US/Panama approvals are a shoo-in. But it’s a complex deal, which will take time to work through the system.

BYD (1211 HK) 2024 Result Preview: Expanding in Domestic Market and 19% Upside Left

By Ming Lu

BYD will release its 2025 annual results on March 24.
The stock price has risen by 38% since our last buy rating on January 6.
However, we believe there is still an upside of 19% for the next twelve months.

CSI 1000 Index Rebalance Preview: US$3.7bn Trade; Adds Outperform as ETFs Face Redemptions

By Brian Freitas

With over 85% of the review period now complete, we forecast 100 changes (the maximum permitted) for the CSI 1000 Index at the close on 13 June.
We estimate a one-way turnover of 11% at the rebalance resulting in a round-trip trade of CNY26.9bn (US$3.7bn). The Industrials sector could gain the most index spots.
The forecast adds have outperformed the forecast deletes this calendar year. Part of that can be attributed to the outflows from ETFs tracking the CSI1000 Index.

AIA Group (1299 HK) Results Day: Expected Price Swings and Dividend Boost

AIA Group (1299 HK) is set to announce its 2024 Annual Results on 14 March 2025, 09:00 am HK Time.
AIA Group (1299 HK) has historically experienced volatile trading during results days, with a median move of +/- 4.2%, considerably higher than typical daily movements.
AIA Group Ltd (1299 HK) will announce its final dividend. With a history of increases, a divided raise can be expected.

HSI Outpaces SPX — Structural Break or Head Fake? Strategies for Hedging

HSI has surged past SPX, but past instances of strong outperformance have often preceded reversals. We examine key historical trends.
The YTD divergence between HSI and SPX calls into question whether this is another temporary rally or the start of a new trend.
We highlight some key hedging strategies to manage risk in this evolving market dynamic.

[Baidu, Inc. (BIDU US, SELL, TP US$92.5) TP Change]: What Can Change BIDU from SELL to a BUY?

By Ying Pan

We conducted a drill exercise in which BIDU’s search revenue will shrink to 1/3 of its size while its AI cloud
Our key concern is margin compression as search’s high margin as a result of browser infrastructure and monopolistic status aren’t repeatable in AI;
We raise the TP from US$80.0 to US$92.5 and maintain SELL.

Silergy (6147.TT): 1Q25 Outlook Sales: Down QoQ but up QoQ. 2025 Outlook Sales: Up 20-30% YoY.

By Patrick Liao

2025 outlook Sales: up 20-30% YoY. More certain on China demand recovery. Gradually enters Mass-Production (MP) for Gen 3/4 products. Main growth drivers are consumer and Electric Vehicle.
Silergy targets for auto sales contributed to reach 15% in 2025.
Will witness a rebound in 2Q25 for computing and Consumer and auto will also grow QoQ given resumption for production in China.

Asia Real Estate Tracker (13-Mar-2025): Mitsui AM buys 50% of Tokyo Data Centre for $120M.

Mitsui AM invests $120M in acquiring 50% stake in Greater Tokyo Data Centre, expanding their presence in the region.
Star Entertainment secures $590M refinancing from Salter Brothers in Australia, providing capital for future growth and development.
Panel discussion highlights how Australia’s evolving society is shifting focus of Build-to-Rent sector from macro to micro level.

[Kanzhun (BZ US, BUY, TP US$20) TP Change]: Catalysts from Robust Post CNY Hiring and AI Initiative

By Eric Wen

Kanzhun Limited (BZ) reported 4Q24 revenue in-line with consensus, and non-GAAP net income beat by 4.0%, thanks to efficient user acquisition,
Although t`he cash billing collected is weak in 4Q24, post CNY job posting number is a bright spot, leading us to tentatively raise 2025 topline by 2.5%;
We rise the TP to US$20 and maintain BUY rating to factor in the early trend in hiring recovery and AI initiatives.

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Mar 13

Daily Brief China: Changyou.com, Bestechnic Shanghai , ESR Group , Lonking Holdings, China Jinmao Holdings, BYD, Shanghai Bao Pharmaceuticals, SGX Rubber Future TSR20, Softcare and more

In today’s briefing:

Changyou (CYOU US): Short-Form Merger Dissent Now (Definitely) Permitted
CSI500 Index Rebalance Preview: 50 Changes; 10% Turnover; US$3.6bn Round-Trip Trade
ESR Group (1821 HK): Steady Progress
Lonking (3339 HK): Boom, Boom, Boom
Lucror Analytics – Morning Views Asia
BYD (1211 HK) 2024 Result Preview: Expanding in Domestic Market and 19% Upside Left
Pre-IPO Shanghai Bao Pharmaceuticals – Future Commercialization Is a Test
Annual Tire Company Results Show Pace Of Change
Softcare Pre-IPO – Strong Market Penetration but Gross Margins May Be Capped

Changyou (CYOU US): Short-Form Merger Dissent Now (Definitely) Permitted

In a long-form merger for Cayman incorporated companies, dissenters can petition the Grand Court for determination of fair value. For short form merges, that avenue of dissent was not available.
But on the 28 January 2021, the Grand Court of the Cayman Islands concluded that shareholders of companies that undertake a ‘short-form’ merger were entitled to dissent.
Changyou.com (CYOU US) appealed this decision in the Court of Appeal, and was dismissed. Then appealed to the Privy Council. In a judgement handed down yesterday, this was also dismissed.

CSI500 Index Rebalance Preview: 50 Changes; 10% Turnover; US$3.6bn Round-Trip Trade

By Brian Freitas

With 85% of the review period now complete, we forecast 50 changes (the maximum permitted) for the CSI Smallcap 500 Index at the close on 13 June.
We estimate a one-way turnover of 10% at the rebalance resulting in a round-trip trade of CNY26.4bn (US$3.6bn). The Information Technology gains at the expense of Healthcare and Consumer Staples.
The forecast adds have outperformed the forecast deletes and the CSI Smallcap500 Index over the last 6 months. The best part is that the volatility of the trade is very low.

ESR Group (1821 HK): Steady Progress

ESR Group (1821 HK)’s preconditional scheme offer from the consortium is either cash (HK$13.00), scrip or a combination of cash/scrip. The offer is final.
On 7 March, the consortium disclosed two additional irrevocable (3.47% of outstanding shares) and satisfied two regulatory preconditions (UK FCA and Singapore MAS).
Since announcing the offer, peers have materially derated, lowering the vote risk. At the last close and for an end August payment, the gross/annualised spread is 4.5%/10.1%

Lonking (3339 HK): Boom, Boom, Boom

By Osbert Tang, CFA

Industry sales of wheel loaders and excavators surged 16.5% and 27.2% in 2M25. For Feb alone, the growth rates are even more impressive at 34.4% and 52.8%, respectively.
Post-CNY, the utilisation hours and rates of construction machinery rose 70.3% YoY and 12.3pp. Market share gain in developing countries will drive exports.
Government supportive policies announced in NPC will provide support to demand. Current consensus forecasts for profit decline in FY25 are disconnected from industry data.

Lucror Analytics – Morning Views Asia

In today’s Morning Views publication we comment on developments of the following high yield issuers: China Jinmao, Nickel Industries, Vedanta Resources, Bharti Airtel
In the US, JOLTS job openings increased slightly to 7.74 mn (7.60 mn e / 7.51 mn revised p) in January, with the job openings rate little changed m-o-m at 4.6%. Layoffs declined for a fourth straight month to the lowest level since June 2024.
Overall, the JOLTS report showed that the labour market was steady in January, albeit demand for labour could soften in the months ahead.

BYD (1211 HK) 2024 Result Preview: Expanding in Domestic Market and 19% Upside Left

By Ming Lu

BYD will release its 2025 annual results on March 24.
The stock price has risen by 38% since our last buy rating on January 6.
However, we believe there is still an upside of 19% for the next twelve months.

Pre-IPO Shanghai Bao Pharmaceuticals – Future Commercialization Is a Test

KJ017 is the first and only recombinant human hyaluronidase to reach NDA stage in China. Bao needs to combine SC Formulations with antibodies. KJ103 may not be a blockbuster variety.
Considering multiple mature FSH products have been on the market for many years and also been recognized by patients, Bao needs to invest in educating the market/patients to accept SJ02.
After Series C+ Financing, Post-money valuation reached RMB4.87 billion. However, we think there could be some uncertainties in terms of future commercialization performance of Bao’s three core products.

Annual Tire Company Results Show Pace Of Change

By Farah Miller

The tire majors losing volume
Smaller tire makers gaining prominence
Most tire majors saw flat or drop in profits

Softcare Pre-IPO – Strong Market Penetration but Gross Margins May Be Capped

By Nicholas Tan

Softcare (SOFT HK) is looking to raise at least US$300m in its upcoming Hong Kong IPO.
Softcare (SC) is an international hygiene product corporation engaged in the development, manufacturing and sales of baby and feminine hygiene products.
In this note, we look at the firm’s past performance.

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Mar 12

Daily Brief China: ESR Group , SK Inc, Goldlion Holdings, ATRenew , Quantasing Group , Yuexiu Property and more

In today’s briefing:

ESR (1821 HK) Chips Away At Pre-Cons
Asia Real Estate Tracker (11-Mar-2025): Singapore buying Sydney office for $70M.
Goldlion Holdings (533 HK) Privatization – The Offer Price Is Acceptable
RERE: 4Q24 Earnings – EPS as Expected Investing for Growth to Keep Pace with Accelerating Demand
QuantaSing Group Limited: EPS Beat on Higher Revenues/Operating Income
Lucror Analytics – Morning Views Asia

ESR (1821 HK) Chips Away At Pre-Cons

When the Starwood/Warburg Pincus Consortium announced a firm offer on the 4th December, it was pre-conditional on a raft of regulatory approvals from no less than eight countries/jurisdictions.
We’re half way there, with four approvals now squared away, leaving Australia, China, Hong Kong and New Zealand still to give the go ahead.
Irrevocables comprising 34.26% of the register (and 57.01% of disinterested shares) are now in the bag. This is a done deal. It’s just a question of timing.

Asia Real Estate Tracker (11-Mar-2025): Singapore buying Sydney office for $70M.

Cambridge, a Singapore-based firm, purchases a Sydney office block for $70M from a former Tysan boss, expanding its real estate portfolio
Hong Kong Land reports a significant increase in losses, totaling $1.4B, attributed to challenges within its Central Portfolio
M&G Real Estate invests $62M in student housing in Melbourne, Australia, highlighting their focus on the Australian real estate market. Warburg Pincus forms a partnership with SK Group to develop Korean senior living facilities, tapping into the growing demand for elderly care in South Korea.

Goldlion Holdings (533 HK) Privatization – The Offer Price Is Acceptable

In recent years, Goldlion is facing performance headwinds. Both revenue and net profit have shown a downward trend due to declining consumption, real estate crisis and unfavorable external factors.
In short term, the weak consumer confidence and market momentum are unlikely to improve. Goldlion’s performance may gradually pick up in 2026 and 2027 but is still in downward trend.
Considering the low trading liquidity, weak fundamentals, uncertainties on performance brought by Goldlion’s potential strategic transformation and the concerns on the outlook, we think the Cancellation Price is acceptable.

RERE: 4Q24 Earnings – EPS as Expected Investing for Growth to Keep Pace with Accelerating Demand

By Zacks Small Cap Research

Key 4Q24 takeaways include: 1) real-time step ups in trade-in activity and consumer demand for high-quality preowned products on the heels of recently introduced government subsidies and ongoing growth in the supply of new smartphone shipments continue to drive accelerating revenue growth 2) in response to building demand trends, management plans to continue to expand the company’s footprint (800 new store openings planned for this year), branding initiatives via new social media content/channels, and fulfillment capabilities and 3) while we assume adjusted operating income margins hold steady this year, our model calls for material margin expansion looking out to 2026, as revenue growth momentum continues to build and expense inflation moderates.

QuantaSing Group Limited: EPS Beat on Higher Revenues/Operating Income

By Zacks Small Cap Research

Key F2Q25 takeaways include: 1) senior executives remain focused on continually realigning/improving the online learning course catalog, and increasingly leveraging QSG’s existing online platform and customer base
2) steady cash flows from the legacy online learning services platform continue to fund the strategic transition, with a focus on higher-quality products/services geared toward the silver demographic
3) management continues to launch new health/wellness related products and services aimed at the silver demographic, while exploring opportunities across the consumer sector to enhance growth

Lucror Analytics – Morning Views Asia

In today’s Morning Views publication we comment on developments of the following high yield issuers: Yuexiu Property, Adani Energy Solutions
In the US, treasuries climbed on safe-haven demand and increased expectations of Fed rate cuts, amid growing concerns over the US economy. The UST curve bull-steepened, with the yield on the 2Y UST declining 12 bps to 3.89%, while the yield on the 10Y UST fell 9 bps to 4.22%. Fed-dated OIS were pricing in 81 bps of rate cuts this year, with the first decrease expected in June.
Equities sank on rising economic uncertainty, given rising trade tensions and after US President Donald Trump’s comments that the economy is facing a “period of transition” this year. The S&P 500 fell 2.7% to 5,615, while the Nasdaq slid 4.0% to 17,468.

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Mar 11

Daily Brief China: Kuang-Chi Technologies , Xiaomi Corp, Alibaba Group Holding , SITC International, Sun Hung Kai Properties, Huge Dental, Longfor Properties, SK Inc, JNBY Design Ltd and more

In today’s briefing:

CSI300 Index Rebalance Preview: 7 Changes a Side as Market Trades in a Range
Xiaomi (1810 HK): 4Q24 Preview, All Businesses Healthy, But Vehicle Overvalued
Alibaba Group’s AI Power Move—Can It Outpace DeepSeek and OpenAI?
SITC International (1308 HK): Another Strong Year, with Excellent Yield
Seeking Value and Safety in HK/China: SHKP 16 HK
Xiaomi Aims to Take Its EV Sales Overseas by 2027
Pre-IPO Huge Dental Limited – The Business and the Concerns Behind
Lucror Analytics – Morning Views Asia
Asia Real Estate Tracker (10-Mar-2025): Warburg Pincus teams with SK Group for Korean senior living.
HK-Listed Apparel & Footwear Screener: March 2025 / Analysing JNBY, Leverstyle, And More

CSI300 Index Rebalance Preview: 7 Changes a Side as Market Trades in a Range

By Brian Freitas

There could be 7 changes at the June rebalance with the Information Technology sector gaining 3 index spots and the Materials sector losing 3 spots.
We estimate one-way turnover of 1.45% at the rebalance leading to a round-trip trade of CNY 28.1bn (US$3.9bn). There are 6 stocks with over 2x ADV to trade.
There have been redemptions in mainland China ETFs over the last couple of months and that leads to a lower impact on the stocks compared to the last rebalance.

Xiaomi (1810 HK): 4Q24 Preview, All Businesses Healthy, But Vehicle Overvalued

By Ming Lu

We believe all business, including smartphone and vehicle, will grow strongly in 4Q24 and 2025.
We expect EPS will increase by 15% YoY in 4Q24 and 41% in 2025.
However, we believe the market overvalues the newly launched vehicle business.

Alibaba Group’s AI Power Move—Can It Outpace DeepSeek and OpenAI?

By Baptista Research

Alibaba Group Holding has made a significant move in the AI space with the release of its latest artificial intelligence model, QwQ-32B, as it seeks to establish itself as China’s leading AI developer, challenging DeepSeek.
The model, which excels in mathematical reasoning, coding, and problem-solving, demonstrates capabilities comparable to both DeepSeek’s R1 and OpenAI’s latest technology.
However, a key differentiator is its size, as QwQ-32B operates with only 32 billion parameters compared to DeepSeek R1’s 671 billion.

SITC International (1308 HK): Another Strong Year, with Excellent Yield

By Osbert Tang, CFA

SITC International (1308 HK)‘s 93.5% profit growth in FY24 is at the top-end of the positive profit alert. A final DPS of HK$1.4 put it on a 7.3% dividend yield.
The FY25 long-term contract rate is expected to rise 10%, with volume growing at least 5% and lower costs. The consensus forecast of a 23.1% earnings decline is too conservative.
Having an ROE of 32% for FY25F, its 12-month forward P/B of 2.46x (vs. average of 2.59x) with net cash equals 5.4% of market capitalisation are inexpensive.

Seeking Value and Safety in HK/China: SHKP 16 HK

By Jacob Cheng

MSCI China has rallied 19% YTD, outperforming DM and EM by 18% and 14% respectively. We think it makes sense to look at China and Hong Kong again
Part of the rally is driven by AI optimism. In terms of fund flow, we are seeing increasing south-bound fund flow to HK equity market at a fast pace
We think Sun Hung Kai Properties, which is a proxy for Hong Kong, may benefit and play the catch up game on the back of very attractive valuation

Xiaomi Aims to Take Its EV Sales Overseas by 2027

By Caixin Global

Xiaomi Corp. aims to expand its electric vehicle sales outside China by 2027, while accelerating the international rollout of its other consumer electronics, company president William Lu said at the Mobile World Congress (MWC) in Barcelona on Monday.
During the event, Xiaomi unveiled its high-end Xiaomi 15 Ultra smartphone series to the global market, priced at 1,499 euros. The company also showcased its premium electric sedan, the SU7 Ultra, and the Xiaomi SU7, though these vehicles have yet to be launched outside China.
“After MWC, I plan to visit several European countries with the goal of officially introducing Xiaomi cars overseas by 2027,” Lu said on the sidelines of the event. He revealed that Xiaomi will begin offering its home appliance products in international markets next year.

Pre-IPO Huge Dental Limited – The Business and the Concerns Behind

Since HUGE ranks in the first tier among domestic brands, the import substitution would be the main logic to continue driving the performance growth based on its strong cost effectiveness.
If HUGE wants to achieve success in non-advantageous areas in the future, reducing price to compete for more market share could be an essential means. VBP is also a challenge.
Comparable companies include Sinocera Functional Material, Yantai Zhenghai Bio-Tech, Angelalign, Modern Dental Group, Topchoice Medical. We think valuation of HUGE could be higher than peers due to higher profitability.

Lucror Analytics – Morning Views Asia

In today’s Morning Views publication we comment on developments of the following high yield issuers: Longfor Group, Melco Resorts, Sands China, Tata Motors
In the US, February nonfarm payrolls increased to 151 k (160 k e / 125 k revised p), albeit the figure came in slightly below estimates. Moreover, the January number was revised downwards to 125 k (143 k p), with the two-month revision at negative 2 k (+100 k p). The unemployment rate edged up to 4.1% (4.0% e / 4.0% p). The average hourly earnings rose 0.3% m-o-m (0.3% e / 0.4% revised p) and 4.0% y-o-y (4.1% e / 3.9% revised p).
Fed Chairman Jerome Powell has reiterated that the US central bank is in no rush to reduce rates. He said: “Despite elevated levels of uncertainty, the US economy continues to be in a good place”, adding that “sentiment readings have not been a good predictor of consumption growth in recent years”.

Asia Real Estate Tracker (10-Mar-2025): Warburg Pincus teams with SK Group for Korean senior living.

Warburg Pincus and SK Group have joined forces to launch a new senior living venture in Korea.
KKR, APG, Gaw, and Alyssa will be participating in discussions about residential trends on MTD TV Forum.
Alyssa has extended its partnership with Dai-Ichi Life for the management of 669 Japanese apartments.

HK-Listed Apparel & Footwear Screener: March 2025 / Analysing JNBY, Leverstyle, And More

By Sameer Taneja

We provide result updates for JNBY Design Ltd (3306 HK) and Lever Style (1346 HK). Separately, Crystal International (2232 HK) was added to the HSCI (eligible for trading on Stock Connect).
We introduce Bosideng International Holdings (3998 HK) on our screen. With a 5-year average ROCE of 17%, net cash, and a 7% dividend yield, the stock is worth a look.
Our top picks include JNBY Design Ltd (3306 HK) and Pacific Textiles (1382 HK), with a favorable mention of Nameson Holdings (1982 HK) due to its attractive dividend yield.

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Mar 10

Daily Brief China: China Vanke (H), Tencent, ESR Group , JD.com , Mixue Group, Hang Seng Index, Chifeng Jilong Gold Mining, Soundwill Holdings, J&T Global Express , AviChina Industry & Technology H and more

In today’s briefing:

A/H Premium Tracker (To 7 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening
HK Connect SOUTHBOUND Flows (To 7 Mar 2025); Big Volumes, Big Net; Tech, Banks, and Telecoms
Merger Arb Mondays (10 Mar) – Seven & I, Naigai, ESR, Soundwill, OneConnect, Goldlion, PointsBet
JD.com (9618 HK) FY Earnings Recap: Intra-Day Swing of 7.3%.
MIXUE Group (2097.HK) – Updates on Performance Forecast and Valuation Outlook
Hong Kong Single Stock Options Weekly (March 03 – 07): From Caution to Euphoria as Sentiment Flips
Chifeng Jilong A/H Trading – Weak Institutional Demand and Probably Close to Fair Value
Soundwill Holdings (878 HK): Founder’s Scheme At $8.50/Share
J&T Global Express H224 Results: Levers That Drove Earlier Improvement Are Losing Power
AviChina Industry (2357 HK): The Discount to Narrow

A/H Premium Tracker (To 7 Mar 2025): AH Premia Still Falling; Expect Curve Torsion or AH Widening

AH Premia continue to fall. Spread curve torsion reverses again with wide premia trades seeing Hs perform the best vs their As.
To me, warning signs are flashing on spreads. They are at their narrowest in 5yrs and they are volatile. Last week I recommended a HUGE trimming (30%) of the book.
Hindsight is 20:20. I should have kept them, but the book still produced 51bp of alpha for the week on top of the 35bp of H/A beta.

HK Connect SOUTHBOUND Flows (To 7 Mar 2025); Big Volumes, Big Net; Tech, Banks, and Telecoms

Gross SOUTHBOUND volumes dropped somewhat but still high. NET buying by SOUTHBOUND was HK$35bn which is still quite strong. Round-tripping volume down 20% week-on-week.
The flows here are still striking. >20% of the top 100 most liquid Southbound eligible stocks saw SOUTHBOUND buy more than 10% of weekly volume.
It feels like there is some common understanding among SOUTHBOUND investors which I do not understand. The numbers are big/growing.

Merger Arb Mondays (10 Mar) – Seven & I, Naigai, ESR, Soundwill, OneConnect, Goldlion, PointsBet

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: Naigai Trans Line (9384 JP), Soundwill Holdings (878 HK), Seven & I Holdings (3382 JP), OneConnect Financial Technology (OCFT US), Smart Share Global (EM US).
Lowest spreads: Shibaura Electronics (6957 JP), Domain Holdings Australia (DHG AU), PointsBet Holdings (PBH AU), Makino Milling Machine Co (6135 JP), Proto Corp (4298 JP).

JD.com (9618 HK) FY Earnings Recap: Intra-Day Swing of 7.3%.

JD.com (9618 HK) Q4 2024 earnings significantly exceeded analyst expectations with revenue reaching RMB 347 billion (13.4% YoY increase).
The stock experienced a volatile two-day reaction, rising 8.4% on March 6 followed by a 5.0% decline on March 7, resulting in a net gain of 3.03%.
Options strategies including straddles, strangles, and call calendar spreads were actively traded ahead of earnings with potential intraday profitability. Longer dated implied volatility decreased following the announcement.

MIXUE Group (2097.HK) – Updates on Performance Forecast and Valuation Outlook

MIXUE’s IPO debut was stellar. the IPO pricing of HK$202.5/share was indeed conservative. MIXUE is able to obtain more valuation premium space after IPO from a relatively low IPO pricing.
However, concerns on future performance growth remains. Investors need to pay attention to the performance verification. Market sentiment is becoming “overheated”, and the pressure for short-term stock price corrections increases.
We updated our forecast for 2025-2027. If based on P/E of 20-25x, market value is HK$109.4-136.8 billion, HK$122.5-153.2 billion, HK$134.8-168.5 billion based on 2025, 2026 and 2027 net profit, respectively.

Hong Kong Single Stock Options Weekly (March 03 – 07): From Caution to Euphoria as Sentiment Flips

A dramatic shift saw stocks surge as market sentiment reversed week over week.
Single stock option volumes were significantly lower vs prior two weeks.
We highlight stocks that have had unusual moves in price, volume and implied volatility.

Chifeng Jilong A/H Trading – Weak Institutional Demand and Probably Close to Fair Value

By Nicholas Tan

Chifeng Jilong Gold Mining (600988 CH) , a gold mining company in China, raised around US$363m in its H-share listing in Hong Kong.
It operates six gold mines in Asia and Africa and has been listed on the Shenzhen Stock Exchange since 2004.
We have covered the company and deal background in our previous notes. In this note, we talk about the trading dynamics.

Soundwill Holdings (878 HK): Founder’s Scheme At $8.50/Share

After small-cap property developer Soundwill Holdings (878 HK) was suspended pursuant to the Takeovers Code, I expected an Offer by way of Scheme.
And that is what unfolded. Grace Foo (ED) and her family, controlling 74.97% of shares out, are Offering $8.50/share, including a $1.00/share dividend, a 62.84% premium to undisturbed.
That’s still a whopping 87.66% discount to the most recent NAV (30th June 2024). But what are the options for minorities (apart from the headcount test)? And terms are final.

J&T Global Express H224 Results: Levers That Drove Earlier Improvement Are Losing Power

By Daniel Hellberg

H224 showed moderating top-line growth, but solid Y/Y improvement in EBITDA margin
However, the levers that drove margin improvement in 2024 appear to be losing power
Within China’s express and logistics segment, we find SF Holding to be far more attractive

AviChina Industry (2357 HK): The Discount to Narrow

By Osbert Tang, CFA

The share price of AviChina Industry & Technology H (2357 HK) has picked up in Mar, and it will continue to chase the HSI and HSCEI, in our view.
At 54.1%, AviChina’s discount to its A-share holdings has narrowed 4.2pp YTD, but is still behind the 6.2pp contraction for overall H-A shares. There is more room to catch up.
The increase in defense spending, advancement in domestic commercial aviation and development of the low-altitude economy are major potential drivers.

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Mar 09

Daily Brief China: Hang Seng Index, JD.com Inc (ADR), Soundwill Holdings, JD Logistics , CK Hutchison Holdings, Mixue Group, Hang Seng China Enterprises Index and more

In today’s briefing:

HSI Index Options Weekly (March 03-07): Alibaba’s Breakout and Policy Support Boost HSI
[JD.com, Inc (JD US, BUY, TP US$52) Earnings Review]: Market Calls for Longer-Term Growth Drivers
Soundwill Holdings (878 HK): Foo Family’s Offer at HK$8.50
JD Logistics Q424 Earnings: Taobao / Tmall Access Fails to Generate Expected Benefits
Last Week in Event SPACE: Cheung Kong, Macromill, China National Building Material, Canvest
China Healthcare Weekly (Mar.9) – 11th VBP, PD-1/VEGF BsAb Outlook, MIXUE’s Stunning IPO Debut
HSCEI Index Options Weekly (March 03-07): Strong Gains as Skew Signals Tail Demand

HSI Index Options Weekly (March 03-07): Alibaba’s Breakout and Policy Support Boost HSI

Positive sentiment helps push HSI to new highs aided by rally in Alibaba.
Implied vol at high levels but so far supported by historic vols that are above implieds.
We highlight a large trade in out-of-the-money Calls for May expiry.

[JD.com, Inc (JD US, BUY, TP US$52) Earnings Review]: Market Calls for Longer-Term Growth Drivers

By Ying Pan

JD C4Q24 revenue exceeded our estimate/consensus by 3%/4% and adjusted NI by 16%/19%, driven by subsidies and logistic efficiency gains.
We expect JD to maintain 11% YoY revenue growth in C1H25 but moderate to 5.9% in 2H.
We maintain JD.com’s TP at US$ 52 and the BUY rating. Market concern on lack of details for long term driver is valid but JD.com still has time.

Soundwill Holdings (878 HK): Foo Family’s Offer at HK$8.50

Soundwill Holdings (878 HK) announced a privatisation offer from the Foo Family, the largest shareholder, at HK$8.50 (HK$7.50 cash + HK$1.00 special dividend), a 62.8% premium to the undisturbed price.
Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection) and a headcount test. No disinterested shareholder holds a blocking stake.
While the offer is light compared to peer multiples, it is attractive compared to historical trading ranges. A low AGM minority participation rate facilitates the vote.

JD Logistics Q424 Earnings: Taobao / Tmall Access Fails to Generate Expected Benefits

By Daniel Hellberg

Investors had hoped to see tangible benefits of Taobao / Tmall access in Q424 results
But revenue growth acceleration was unimpressive, and core margins fell noticeably
We believe its disappointing Q424 numbers will result in near-term underperformance

Last Week in Event SPACE: Cheung Kong, Macromill, China National Building Material, Canvest

Did Trump do CKH (1 HK) a solid, convincing them to sell assets that have profited from international trade growth, just as Trump starts imposing tariffs on anything that moves?
An OK package for Seven & I (3382 JP). Not perfect. SEI IPO’s a bit dodgy. It may be designed to spur ACT into action, but isn’t an awful fallback.
Macromill (3978 JP)‘s Offer bumped. If you want to make sure this deal doesn’t get done, do the things you need to do to make sure it doesn’t get done.

China Healthcare Weekly (Mar.9) – 11th VBP, PD-1/VEGF BsAb Outlook, MIXUE’s Stunning IPO Debut

The 11th national VBP is expected to start in 2025H1. Companies such as Kelun, CSPC, Qilu Pharmaceuticals, Fosun Pharma, China Resources Pharmaceutical, etc. are expected to be affected the most.
It is estimated that the entire market of PD-1/L1 x VEGF BsAb is approximately US$20-30 billion. AK112 is expected to seize about 40%-50% of the market or US$8-15 billion.
MIXUE’s IPO debut was stellar. Conservative investors can considering taking profits as risk of share price corrections has increased. Radical investors can choose to bet on valuation exceeding Nongfu Spring.

HSCEI Index Options Weekly (March 03-07): Strong Gains as Skew Signals Tail Demand

HSCEI rebounded 5.90%, reversing last week’s weakness and extending its rally since mid-January.
Volatility softened in the short term, with implieds trending below key historic vol measures.
Skew shifted as demand for tail risk increased, with both out-of-the-money Puts and Calls seeing higher implied volatility, reflecting a bid for protection and upside exposure.

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Mar 08

Daily Brief China: Alibaba Group Holding , Zoomlion Heavy Industry H, Hang Seng Index, Chery Automobile Co. Ltd., Health And Happiness (H&H), KKR & Co, NetEase and more

In today’s briefing:

Alibaba (9988 HK): Trends in CALL Strikes and Open Interest Visualized in Animation and Charts
Alibaba (9988 HK): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts
Technically Speaking, Breakouts and Breakdowns: HONG KONG (March 6)
The HSI PUT: Hedging Strategies for an Overextended Rally
Chery Auto Pre-IPO Tearsheet
Lucror Analytics – Morning Views Asia
Asia Real Estate Tracker (07-Mar-2025): KKR sells Seiyu to Trial Holdings for $2.5B.
NetEase Inc.: Are Its Efforts Towards Content & Community Building in Music & E-commerce Yielding Results?

Alibaba (9988 HK): Trends in CALL Strikes and Open Interest Visualized in Animation and Charts

While Alibaba Group Holding (9988 HK) rallied, lower in-the-money calls were closed, realizing gains, while higher out-of-the-money strikes gained popularity.
The median strike price lagged the sharp increase in stock price. The median strike currently stands at 107.50.
With 81% of March calls currently in-the-money and higher strikes trading at premium implied volatility, active trading is expected in the 150-170 strike range.

Alibaba (9988 HK): Trends in PUT Strikes and Open Interest Visualized in Animation and Charts

As Alibaba Group Holding (9988 HK) rallied, put strike distribution remained largely unchanged with median strikes only rising from 80 to 85, pushing protection increasingly deep out-of-the-money.
With most puts now deep out-of-the-money, active trading is expected in the 120-140 strike range.
The deep out-of-the-money put strikes trade at a significant premium to at the money implied volatility. The 130 strikes trade below, offering an opportunity for an effective hedge.

Technically Speaking, Breakouts and Breakdowns: HONG KONG (March 6)

By David Mudd

Hong Kong continues its secular bull market and has now reached its first significant resistance in the 24k to 25k. Growth factor investing is leading in long-only investing.
Mainland buyers continue buying Hong Kong stocks at a historic rate with buying focused in the tech sector and specifically in AI-related companies.
Zoomlion Heavy Industry H (1157 HK) has broken its double-top formation and is at a new high. Vtech Holdings (303 HK) broke out to a new high with improving momentum.

The HSI PUT: Hedging Strategies for an Overextended Rally

By Nico Rosti

The HSI INDEX has been defying gravity, recently. It is up more than 30% from its most recent low.
In our previous, Jan. 11th insight we highlighted very precisely the support zone (18.8k-17.5k) from where the index was poised to resume its rally (the bottom was printed at 18671).
Our models are currently indicating a very overbought condition. Leveraging the information relayed by Gaudenz Schneider in a recent insight, we think a “HSI PUT” could make sense here.

Chery Auto Pre-IPO Tearsheet

By Akshat Shah

Chery Automobile Co. Ltd. (CACTZ CH) is looking to raise about US$1bn in its upcoming Hong Kong IPO. The deal will be run by CICC, Huatai and GF Securities.
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.
According to F&S, it was the second largest Chinese domestic brand passenger vehicle company, and the 11th largest globally, in terms of global sales volume of passenger vehicles in 9M24.

Lucror Analytics – Morning Views Asia

In today’s Morning Views publication we comment on developments of the following high yield issuers: Health and Happiness (H&H), Geely Automobile
In the US, the January trade deficit surged to a record high of USD 131.4 bn (USD 128.8 bn e / USD 98.1 bn p).
Imports soared 10% to a record USD 401.2 bn (amid front-loading of imports ahead of tariffs), while exports rose 1.2% to USD 269.8 bn.

Asia Real Estate Tracker (07-Mar-2025): KKR sells Seiyu to Trial Holdings for $2.5B.