China

• I summarise the latest spreads and newsflow for the merger arb situations covered across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, the Philippines, Thailand, and Chinese ADRs.
• Highest spreads: Skyworth (751 HK), Changhong Jiahua (3991 HK), Z Fin (1168 HK), Tourism Holdings (THL NZ), OFX Group (OFX AU), Cleanaway Waste Management (CWY AU), Atlantic Lithium (A11 AU). 
• Lowest spreads: Kakaku.com Inc (2371 JP), FleetPartners Group (FPR AU), Accent Group (AX1 AU), Vault Minerals Ltd (VAU AU), Japan Property Management Center (3276 JP), Albis Co Ltd (7475 JP). 

• STAR50 rebalance will be effective on 14 Sep 2026 before market open, with 5 ADDs and 5 DELETEs.
• Four of the five ADDs gained at the post-announcement open, and all five then fell over the rest of the bridge. AVIC Chengdu UAS was the only DELETE to gain.
• Historically, ADDs with a negative bridge averaged higher first-week returns than ADDs with a positive bridge. DELETEs with a negative bridge mostly kept falling in the first implementation week.

• Stock trades at .3 x P/B, Cash on books is .38 cents per share, and Liquidation Value is .64 cents ( Net Current Assets less all liabilities is .64 cents.
• Manufacturing business is the main business, and the company has blue-chip customers but not much pricing power.
• The retail business has a chequered history, and the property value per share is 40 cents per share. Dividend Yield is 7%

• ENN Energy (2688 HK)‘s 1H26 results demonstrated that, even without ENN Natural Gas (600803 CH)‘s privatisation, its fundamentals remain solid. 
• Its gross margin decline has stabilised; with cost control initiatives, the FY26 earnings will stay healthy. Upside will come from improvement in the IE and smart home segments.
• At 7.6x PER for FY26 and FY27, it is among the cheapest in the HSI and the gas utilities sector. Its P/B is now over 1SD below average. 

• SHEIN listed on the HKEX Main Board on 1 Sep 2026, and we work out entry timing for HSCI, HSI, HSCEI, HS TECH, Stock Connect and MS-China.
• HSIL confirmed the HSCI ADD after the 14 Sep 2026 close on 2 Sep, and a 2.3% FF holds MS-China and HSCEI entry until the 28 Feb 2027 lock-up expiry.
• The December 2026 HSI review is the first cycle SHEIN can enter, and Southbound inclusion follows the WVR rule of six months plus 20 trading days on 31 Mar 2027.

• Insilico Medicine (3696 HK) has risen since its 1H26 earnings announcement.  The company’s rentosertib drug reversed biological aging markers in its Phase IIa trial.
• Rentosertib holds a singular distinction: it is the first end-to-end AI-discovered and AI-targeted drug to reach Phase III clinical development globally.
• The China CDE permitted a direct jump from Phase IIa to Phase III based on efficacy data, an unusual regulatory concession.

• ASR Microelectronics is a fabless semiconductor platform company, a market leader in cellular connectivity chips, ranking No. 1 globally in 2025.
• ASR Microelectronics ranked No. 1 globally in cellular connectivity chip market by shipment volume in 2025 with 37.8% market share.
• ASR Microelectronics reported a loss of RMB390,285 for 2025 and a profit of RMB84,244 for six months ended June 30, 2026.

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• In this insight we update readers on new developments affecting SHEIN, Temu, AliExpress
• New laws and ongoing investigations are likely to raise the cost of operating in the EU
• We expect to hear about important legal milestones in the coming weeks – stay tuned!

• Revenue grew by 230% YoY in 2Q26 with gross margin up to 66% from 37% in 2Q25.
• Chip giants pursue high-margin HBM and leave the niche DRAM market behind.
• GigaDevice is the only fabless company that focus on niche DRAM.

• 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, Shenzhen Longsys Electronics (9976 HK) didn’t do much at listing and had one of the lowest institutional coverage ratios yet for large A/H listings.
• On the placement front, the week wasn’t as busy but we did look at a few deals and upcoming lockups.

• Transition to “Token Economy” is complete but risky: Z.AI has successfully pivoted its business model from high-margin customized on-premise installations to public API token delivery, with API revenue surging to 86.5% of the mix in H1 2026. However, this shifts the battleground entirely to compute economics and exposes the firm to intense margin pressure.
• The USD 2.4 billion ARR target is heavily concentrated: While Z.AI’s end-of-year target of $2.4 billion in ARR appears technically achievable on current run-rates, over 31% of this revenue is concentrated in just two major customers. This creates immense churn and structural pricing risk as those clients build out their own internal capabilities.
• The USD 5 billion capital raise is a compute-survival play: The dual tranche financing launched on September 11, 2026—comprising a $2 billion share placement and $3 billion in zero-coupon convertible bonds—is driven entirely by the urgent need to fund a massive domestic GPU infrastructure pivot, as U.S. export blacklists restrict access to leading-edge global silicon.

• ARR surged 6× in five months, with token volume up 40× and API ASP up 101% — evidence that Z.AI has achieved genuine production-scale demand.
• Domestic compute is becoming a potential structural advantage, but customer concentration and a 30% FY28E gross margin keep earnings power unproven.
• NEUTRAL, HK$1,000 FV, based on 15× FY28E EV/sales plus net cash; we need >28% 2H26 gross margin to turn bullish.

• Guangdong Mic-Power New Energy Co., Ltd. provides integrated, high-performance, safety-enhanced mini-size lithium-ion batteries for wearable devices, smart medical devices, and portable energy storage.
• Revenue increased by 51.7% to RMB532.9 million in 2024, while net profit grew 755.0% to RMB58.1 million in 2024.
• For the six months ended June 30, 2026, revenue was RMB337,163 thousand and profit for the period was RMB26,345 thousand.

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• NetEase, Inc. reported steady financial and operational performance for the second quarter of 2026, with total net revenue reaching RMB 30.1 billion (USD 4.4 billion), driven predominantly by its games business.
• The company’s games and related value-added services (VAS) generated RMB 25 billion in net revenues, reflecting a 10% year-over-year increase, despite a 2% sequential decline attributed primarily to certain self-developed and licensed titles.
• This growth was supported by a diverse portfolio spanning original IPs, live operations, and innovations such as the recent launch of Sea of Remnants in China and new content updates to established games like Sword of Justice, Identity V, and the NARAKA: BLADEPOINT franchise.

• PDD Holdings, Inc. reported steady revenue growth in the second quarter of 2026 amid ongoing investments in platform governance, supply chain enhancement, and broader ecosystem support.
• Group revenue rose 8% year-over-year to RMB 112.4 billion, driven primarily by an increase in transaction service revenues, which grew 13%.
• However, net income declined 12% year-over-year to RMB 27.2 billion, influenced by elevated investment levels in platform improvement and industry ecosystem development.

• Trip.com will finally report Q2 results after the US close on Tuesday, September 15
• Earlier investigation, now concluded, was likely a drag on growth & earnings in period
• Management commentary could indicate pace of recovery from Trip.com’s latest stumble

• Z.AI (2513 HK) (aka Knowledge Atlas/Zhipu) is looking to raise around US$2bn via issuing shares and another US$3bn via CBs. The company had raised US$4bn in July 2026.
• Zhipu is one of the leading players in China’s domestic LLM space. Its IPO linked lockup had recently expired.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Five-For-Five on initiation. We started BULLISH at HK$230.20 on 6 August, flagged HK$300 as trim, and identified September’s unlock as entry, not exit. The stock followed cleanly as expected.
• A secondary selloff, separate from the unlock, saw huge declines: July’s placing price, 21% below fair value, and 13.4x FY2028E EV/revenue. Margins cleared discipline; MSCI inclusion approaches. Thesis unchanged.
• Re-Enter. Buy at HK$267.80. Add aggressively below HK$260. Maximum position below HK$240. Do not chase above HK$300. Position for the November MSCI event by end-October.

• Transwarp Technology (688031 CH) , an AI infrastructure software provider, aims to raise up to US$109m in its H-share listing.
• Transwarp Technology (Shanghai) Co (TTC) is an AI infrastructure software provider in China. TTC enables enterprises to efficiently build AI infrastructure software.
• We have looked at the PHIP updates in our previous note. In this note, we talk about the IPO pricing.

• The 10% Objection Rule is the Principal Execution Risk: Because the scheme of arrangement requires cancelling 3.29 billion shares (representing 34.5% of issued share capital), the blocking threshold under the Hong Kong Takeovers Code’s 10% objection rule is exceptionally low at just 3.45% of total outstanding shares. A concentrated block of activist arbitrageurs or passive funds could easily derail the transaction, though the 44.2% premium and 1.8x P/B valuation are structurally calibrated to preempt such dissent.
• Out-of-the-Money Exchangeable Bonds (EBs) Force Parent Cash Outlay: The HK$3.88 billion zero-coupon exchangeable bonds due 2032 carry an exchange price of HK$4.24, rendering them significantly out-of-the-money relative to the HK$3.00 take-private offer. Under Rule 13 of the Takeovers Code, the offeror must make a comparable proposal, which in practice will trigger delisting put options, forcing the parent to redeem the bonds at par and pushing the maximum cash required for the transaction to HK$12.6 billion.
• Severe Retention Risks in Impending Post-Merger Integration: The privatization of Guotai Junan International (GTJAI) is the second phase of Guotai Haitong’s offshore restructuring, following the 2024 privatization of Haitong International (HTI). Merging these two highly divergent platforms will trigger major cultural and operational friction, particularly as the rigid risk-averse Shanghai SOE parent seeks to dismantle GTJAI’s historical operational autonomy and compress the flexible compensation structures necessary to retain key wealth management talent.

• Alibaba Group reported mixed financial results, with strong cloud and artificial intelligence growth offset by profitability pressure from heavy investment.
• Total revenue reached RMB 269 billion, up 9% year-over-year, driven largely by a 45% increase in Alibaba Cloud external revenue, marking the 22nd quarter of acceleration.
• AI-related cloud products sustained triple-digit growth for the 12th consecutive quarter and reached an annualized revenue run rate of RMB 49.5 billion, or approximately USD 7.3 billion.

• Strong Core Profitability Inflection: GenScript’s Life Science Group (LSG) has crossed a key utilization threshold, with 1H 2026 adjusted operating profit surging 102.8% to US$94.0 million on a 28.8% revenue increase. This operating leverage is heavily driven by high-throughput automation and the doubling of high-margin AI-driven protein orders.
• Capital Raise Driven by Cap Table Restructuring: The newly announced US$300 million primary placement at HK$30.50 per share is strategically timed to offset the US$225.1 million cash outlay used to buy back Hillhouse Capital’s preferred shares in ProBio. This restructuring cleans up ProBio’s cap table ahead of its newly approved HKEX Main Board spin-off.
• Bifurcated Competitive Landscape: GenScript retains an 80%+ win rate against Twist Bioscience and IDT for long-chain, highly complex genes (>10kb) due to proprietary error-correction algorithms, but loses on pure price ($0.003/base) to Twist for standard, low-complexity gene fragments (<1.5kb). Geopolitical overhang from the BIOSECURE Act is driving US biopharma clients to multi-source, capping GenScript’s near-term US market share expansion.

• As reported by Brian Freitas global index trackers will start to buy China International Capital (601995 CH) at the close on Monday September 14th.
• Tri-Party share-swap merger absorbing Dongxing Securities (601198 CH) and Cinda Securities (601059 CH) was approved by CSRC in early September 2026.
• CICC  is trading at good discount value, mildly oversold, according to our model, but it could go lower before global index trackers buy and push the price higher.

• 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 December 2026 index rebal event.
• At present, we see two changes based on the latest data but the rankings can change until 30th September 2026.

• On the 7th July Guotai Haitong Securities (601211 CH) pitched a pre-conditional (SASAC/NDRC) Scheme for Guotai Junan (1788 HK) at HK$3/share, a 44.2% premium to last closes. Terms declared final.
• The pre-con long stop date is the 31st October – uncommonly nimble. This could (should) be wrapped up before year-end. Clean deal.
• A perusal of the s329 investigative reports provides a clearer picture on who holds what. Not that I expect the vote to be a cause for concern.

• Alibaba’s recent HK$80 billion (US$10.2 billion) equity placement was a direct response to offshore liquidity pressure. This funding strategy bypasses the 10% mainland withholding tax and State Administration of Foreign Exchange (SAFE) approval frictions required to transfer onshore e-commerce profits to the offshore Cayman holding company to support capital projects and existing buybacks.
• The cancellation of Cloud and Cainiao spin-offs reflects a strategic reality rather than just regulatory retreat. Cloud has been repurposed as a capital-intensive “full-stack AI factory” that requires immense, ongoing cash subsidies from core commerce, while Cainiao’s full integration is structurally necessary to compete with Temu and Shein in international logistics.
• Heavy AI investments have pushed quarterly Capex to RMB 67.7 billion, leading to a negative free cash flow of RMB 44.6 billion in the June 2026 quarter. This aggressive infrastructure spending carries highly ambitious 2-to-3-year payback targets that remain vulnerable to China’s ongoing domestic cloud price wars and a shifting margin pool where merchant take-rates are structurally squeezed.

• The current HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
• A new methodology has been proposed and if implemented, index composition could change drastically in the next index rebal event.
• There could be at least 20 changes to the index as the new methodology aims to increase index member count from 30 to 50 in December 2026.

• GenScript Biotech (1548 HK) is looking to raise up to US$300m from a primary placement. Proceeds are to be used for capacity expansion and platform infrastructure purposes.
• Genscript Biotech is a global life-science platform spanning research tools and services, biologics CDMO (ProBio) and industrial synthetic biology, with additional exposure to cell therapy through Legend Biotech.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• The Hang Seng Internet & IT (HSIII) index represents the top 30 Hong Kong-listed stocks related to internet and information technology businesses.
• We expect no index changes in December 2026 but we see capping flows of ~US$112mn one-way.
• We expect at least two ADDs/DELs in the next index review which will take place in March 2027. 

• Cathay Share Placement and Bond Buyback: Swire Pacific’s September 2, 2026 accelerated exchange trade—selling a 5.96% stake in Cathay Pacific (362.65 million shares) at HK$13.20 to fund the repurchase of HK$4.69 billion in zero-coupon exchangeable bonds due 2027—strategically removes a major dilution overhang. While it trims Swire’s Cathay stake to 39.15%, it locks in a HK$1.12 billion gain on the placement and leaves Swire’s management control fully intact.
• Dual-Class B-Share Discount Anomalies: The A-to-B share premium is currently at a 24-year high (with B-shares trading at a ~28% discount to their theoretical 1/5th economic value of the A-shares). Despite this massive discrepancy, a share consolidation is structurally blocked by parent company John Swire & Sons, who hold 74.83% of B-shares to maintain 70.97% voting control over the listed group at a cheaper economic cost.
• Parent-Subsidiary Misalignment and KPI Anchoring: Executive compensation and alignment at Swire Pacific are heavily biased toward the private UK parent, John Swire & Sons, through a long-standing Services Agreement. Senior leadership are JSS secondees whose long-term incentives are tied to the private parent’s global returns rather than public market share performance, explaining their high tolerance for a persistent 30% to 40% NAV discount.

• Almost a year in, Changhong Group has yet to secure the regulatory approvals for its HK$1.223 scheme offer for Changhong Jiahua (3991 HK).
• The offer will be effectively blocked, not by a Sichuan NDRC/Commerce rejection with stated reasons, but by the approval process failing to conclude by the 20 September long stop date.
• On a deal break, I expect little-to-no downside due to improving fundamentals, significant peer re-rating and significant discount to the undisturbed price. 

• Wasion (3393 HK) share price remains depressed, even though revenue and orders hit record highs, but margins are not expanding. 
• AI and data center-related revenue +153% YoY to RMB 1.89 billion. The company is now an AI-related name; hence, higher valuation?
• The share buyback should pull some confidence back into the share price but if they cancel the shares, then it is even a stronger signal. 

• JD.com’s second quarter of 2026 results showed a steady operational performance amid challenging macroeconomic and industry conditions, delivering a mix of positives and areas for cautious observation.
• Revenues declined slightly by 2.9% year-over-year to RMB 346 billion, primarily due to headwinds in the electronics and home appliances categories.
• This segment faced pressure from a high comparison base linked to last year’s trade-in program and upstream raw material cost increases.

• Dongxing Securities (601198 CH) and Cinda Securities (601059 CH) shares will stop trading after 14 September following the merger with China International Capital (601995 CH). 
• There will be buying in China International Capital (601995 CH) from global index trackers at the close on Monday.
• There will be additions and other flows for the CSI 300 Index, CSI 500 Index and the CSI 1000 Index at the time of delisting of Dongxing Securities and Cinda Securities.

• Our 2020 thesis correctly identified Perfect Medical’s cash generation and management discipline, but underestimated how narrow and execution-dependent its moat was.
• The full financial history shows resilience rather than compounding: overseas expansion disappointed, margins compressed sharply, and competitive pressure remained persistent.
• At roughly 9x FY03/2026 earnings with an 11% trailing dividend yield, the stock is interesting again – but the thesis is now stabilization and cash return.

• Hunan Junxin Environmental Protection (HJXEP HK), a waste treatment company, aims to raise around US$400m in its H-share listing.
• Hunan Junxin Environmental Protection (HJEP) operates in the solid waste treatment and green energy sectors.
• In this note, we talk about the company’s past performance.

• The “Split-Brain” Strategy and Crisis: Want Want China is experiencing an operational bottleneck, highlighted by Chairman Tsai Eng-meng’s August 2026 internal letter calling their 38% Q1 profit plunge a “major operating crisis”. Senior management is paralyzed: they are pushing the R&D team to innovate sugar-free and healthy products, while concurrently incentivizing the sales force to dump legacy, high-sugar, high-margin products like Want Want Milk to meet aggressive short-term volume targets.
• Channel Conflict and Cannibalization: Legacy traditional wholesale channels (which historically represented the core of Want Want’s business) are in a structural decline, down high single-digits. The rapid expansion into hard-discount specialty snack retail (now representing 15% of total revenue) is cannibalizing traditional distributors. Lower-tier distributor channel inventory has ballooned from a healthy 30-day baseline to a dangerous 90 to 100 days.
• Macro and Raw Material Pressures: Recent margin erosion is structural rather than cyclical. Spiking raw materials—with global sugar hitting a multi-month high above 18.36 cents per pound and palm oil hovering around RM 4,966 per tonne—are colliding with high internal M&A hurdle rates (WACC of 15%) that prevent the company from acquiring healthy snack brands defensively, leaving them trapped with declining legacy assets.

• On the 20th January 2026, Skyworth (751 HK) announced an inter-conditional Scheme and concurrent listing of 70%-held Skyworth Photovoltaic (Skyworth PV) on the HKEx, by way of introduction.
• The Dongfeng (489 HK)/Voyah (7489 HK)-like structure appeared fair. The challenge was that Skyworth PV’s key comps were/are A-share listed, and Skyworth PV should trade at an H-share discount.
• Currently trading right at the Scheme cash consideration, assigning zero value for Skyworth PV. Skyworth’s share price is 22% below the pre-spin-off announcement price.  I can see this trending lower.

• VASRO GmbH has initiated coverage of Sirnaomics Ltd. (HKEX: 2257) with a BUY recommendation and a target price of HK$7.07 per share.
• Sirnaomics develops siRNA medicines, drugs that silence a disease-causing gene before it is turned into protein. The hard part is delivery, and beyond the liver very few groups can do it. The company owns two platforms: PNP, which it places among the world’s few extra-hepatic siRNA delivery systems with clinically proven safety, and GalAhead, which it describes as the only programmable RNAi platform for dosing intervals in global clinical development. Four programmes are in human trials, a fifth is IND-ready, and the company holds global rights across them.
• The five years since listing were costly. Accumulated losses reached US$536.8m, spending was cut from US$91.8m in 2022 to US$15.3m in 2025, and headcount fell from 225 to 37. The audit opinion is qualified and going concern is flagged.

• Shenzhen Kinwong Electronic Co., Ltd. is a globally recognized PCB manufacturer, holding the world’s largest market share in automotive electronics PCB. The company is undertaking a primary listing on HKEX.
• Kinwong Electronic is the world’s largest automotive electronics PCB provider with 10.6% market share in 2025, and achieved 14 consecutive years of revenue growth.
• Revenue was RMB15,308,052 thousand in 2025, with a 20.9% growth rate. Gross profit margin decreased to 18.7% by April 30, 2026.

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• Genfleet Therapeutics (2595 HK) (GFT) raised around US$240m in its Hong Kong IPO in September 2025. The lockup on its pre-IPO investors is set to expire soon.
• GFT is a biopharmaceutical company focused on developing novel treatment options in the fields of oncology.
• In this note, we will talk about the lockup dynamics and possible placement.

• Shenzhen Kinwong Electronic (KNWNG HK) is looking to raise about US$600m in its upcoming Hong Kong IPO.
• Kinwong is a leading global printed circuit board (PCB) provider with a comprehensive product portfolio spanning rigid PCBs (RPCBs), flexible printed circuits (FPCs), and other specialized PCBs.
• In this note, we look at the company’s past performance.

• Insilico Medicine (3696 HK)‘s lead asset rentosertib has demonstrated potential for biological age reversal. Data from Phase 2a trial shows 3–4 years reversal in biological age.  
• Recently, the company has announced 1H26 result, with revenue increasing 287% YoY to $106M, and achieved its first profitable half-year since listing, with an adjusted net profit of $36M.
• Execution of additional strategic collaborations to maximize the application and commercial opportunity of Pharma.AI platform will be the near-term catalyst.

• Back in 1Q25, Fosun International (656 HK) took ClubMed operator Fosun Tourism private at ~US$1.2bn via a Scheme: Fosun Tourism (1992 HK)’s Scheme Buyback Vote On The 4th March. 
• Fosun is now proposing to relist the unit. Word is that Fosun is seeking to raise US$500mn, with a possible listed valuation upward of US$3bn.
• With sliding earnings, falling margins, that kind of pricing is optimistic.

• Public Financial (626 HK) announced a scheme privatisation offer from Public Bank (PBK MK) at HK$2.50 per share, a 61.3% premium to the undisturbed price. The offer is final.
• The offer is well below book value (P/B of 0.35x) and light compared to peer multiples. However, it is an attractive exit as it represents a 10-year high. 
• The vote is low-risk, as the high takeover premium will appeal to minorities given the near-term cash certainty compared to remaining a minority holder in an illiquid, 73%-controlled stock. 

• YMTC, a 3D NAND flash memory IDM, has filed its prospectus with the Shanghai Stock Exchange for a STAR Market listing. CITIC and CSC are the joint sponsors.
• We look at the company’s core segments: NAND Flash products and other products and services.
• We then look at the company’s financial profile, profit turnaround, pre-IPO valuation and investor backing.

• ClubMed Lifestyle Group (CLBMD HK) is looking to raise up to US$700m in its upcoming Hong Kong IPO. The deal will be run by BNP, HSBC and JPM.
• ClubMed Lifestyle Group is a global premium vacation lifestyle group.
• The firm focuses on delivering comprehensive, high-quality premium all-inclusive resort operations and asset-light vacation scenario services.

• In Public Financial (626 HK) Halted: Public Bank (PBK MK) Takeover Expected, I speculated Public Bank (PBK MK) may make a HK$2.50/share Scheme Offer for 73.23%-held  Public Financial (626 HK).
• And that is what unfolded. It’s a 61.29% premium to last close. The Offer price is final. Dividends will be netted.
• I don’t see why this transaction cannot be fast-tracked in say, four months, well ahead of the 31st March 2027 long-stop.

• CICC (3908 HK) has received CSRC approval for its merger with Cinda Securities (601059 CH) and Dongxing Securities (601198 CH), but its share price has fallen. 
• Concerns about EPS dilution are valid, as CDS’ and DXS’ 1H26 earnings are weaker than CICC’s. However, amid increased industry consolidation, the merger is strategically important.
• CICC now sits at 0.57x 12-month forward P/B, just the average since 2021. We expect the merger to enhance book value, and H-shareholders will benefit more. 

• This insight discusses about comparison between the financial and operational results of Midea Group (300 HK) , Haier Smart Home (6690 HK) and Gree Electric Appliances (000651 CH) 
• It compares the domestic & export performance, revenue mix and guidance for H2FY2026.
• Finally, we discuss about valuation comparison between the companies and our view.

• Hosin Global Electronics (HGE)  is looking to raise at least US$500m in its upcoming Hong Kong IPO.
• HOSIN Global Electronics is a leading independent memory product enterprise, ranking as the world’s fifth largest and China’s second largest by revenue in 2025, according to Frost & Sullivan (F&S).
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• The Hang Seng Index (HSI INDEX) has been rallying briefly in July, then flat/slightly down in August. September is a question mark, the index direction is unclear at the moment.
• Solid domestic macro fundamentals—notably strong mainland China trade balance data and targeted state liquidity injections— continue to drive institutional Southbound capital flows into Hong Kong-listed equities.
• This insight plots out our model support and profit targets for tactical positioning in case a breakout happens in the next 2-3 weeks. 

• Successful Strategic Pivot to Offshore Markets: Shenzhen Forms Syntron has effectively navigated intense price competition in Mainland China by executing a stark pivot toward Hong Kong and Southeast Asia. This shift is highlighted by overseas revenue contributing 80.6% of total revenue in 2025, driving gross margin expansion to 37.8% despite a 14.8% decline in top-line revenue.
• Backlog Cleansing Behind Q1 2026 Margin Drop: The sudden decline in gross margin to 30.3% in early 2026 was a deliberate accounting clearance rather than a structural deterioration. It reflects the final delivery and cost-of-sales recognition of 22 legacy loss-making projects in Mainland China as the company aggressively winds down non-core domestic operations.
• Deep Infrastructure Lock-in Mitigates Customer Concentration: While top-five customer concentration remains extremely high at 86.5%—with Bank of China Group acting as the core anchor client—Forms Syntron’s central role in critical digital financial infrastructure (such as HKMA’s Project mBridge, e-HKD, and Project Ensemble) provides high switching costs and structural pricing power that peers like Sunline or Yusys cannot easily replicate.

• In this insight we discuss about Midea Group (300 HK)’s resilient business model in midst of challenging industry situation. 
• We discuss how AI, Robotics & Smart Buildings Are Saving the Day for the company.
• Finally, we conclude with our view on H2 FY2026 performance.

• Shenzhen Longsys Electronics (301308 CH) (SLE), a branded independent semiconductor memory product enterprise, raised around US$1,050m in its H-share listing.
• SLE designs, develops, manufactures and sells a comprehensive portfolio of memory products for edge AI and traditional consumer, enterprise and industrial applications.
• We have looked at the past performance and likely A/H premium in our previous note. In this note, we talk about the trading dynamics.

• Longsys, a branded memory-module maker, raised HKD 6,803.2m (USD 867.7m) in net proceeds from its Hong Kong IPO and will list on the SEHK on Tuesday, September 8, 2026.
• In our previous note, we looked at the company’s deal terms, cornerstone and sponsor track records, and valuation.
• In this note, we provide an update for the IPO before its trading debut.

• Short sellers made bold moves the week of August 31.
• MOO saw the most dramatic buildup – short interest tripled in seven days.
• At the other end, MSFT shorts nearly disappeared entirely, and GME saw rapid covering ahead of its September 8 earnings.

• In 1H26, YOFC’s total revenue grew by 54% YoY, with the main business OCP up by 59%YoY.
• Operating Margin rose to 37% in 2H26 from 9% in 1H25.
• We believe the stock has at least 37% upside potential for 2027.

• SASAC Valuation Floor Deadlock: The primary regulatory bottleneck stalling the M&A transaction is the State-owned Assets Supervision and Administration Commission (SASAC) valuation floor, which prohibits the sale or transfer of state-owned enterprise (SOE) assets below their appraised net asset value (NAV). With Changhong Jiahua trading at a deep market discount of approximately 0.3x to 0.4x price-to-book (P/B), a massive valuation gap exists between public market pricing and the regulatory minimum transfer price, halting private strategic interest.
• AI Distribution Working Capital Strain: The company’s strategic pivot toward AI distribution (e.g., domestic AI servers and localized graphics processing units) is a working capital drain rather than a margin savior. The cash conversion cycle is deteriorating because upstream domestic chip designers demand near-cash or tight 30-day payment terms, while downstream state-backed enterprise buyers demand extended payment windows of 120 to 180 days, severely squeezing liquidity and increasing short-term borrowing costs.
• Geopolitical Sanctions Discount: Geopolitical tech-import restrictions and the parent company’s (Sichuan Changhong Electric) historical industrial ties create a persistent valuation discount. Prospective foreign buyers and multinational private equity firms are deterred by US Department of Commerce Entity List risks and foreign exchange repatriation hurdles managed by the State Administration of Foreign Exchange (SAFE), leaving only domestic state-backed syndicates as viable but slow-moving acquirers.

• In H126 J&T Global reported strong top-line growth of almost 40% Y/Y vs H125
• Growth was broad-based, and core adj EBITDA margin also showed solid Y/Y improvement
• Overall, a nice set of numbers from J&T Global in H1, but stock isn’t cheap here

• Shenzhen Forms Syntron Information Co., Ltd. is a Greater Bay Area fintech service provider, delivering software development, consulting, and system integration services to financial institutions. It holds seven patents and.
• Over 90% of the workforce are technical professionals, and the Hong Kong fintech market is projected to reach RMB44.0 billion by 2030.
• In 2025, revenue was RMB631,068 thousand and profit for the year was RMB74,281 thousand. Net current assets were RMB1,258,798 thousand as of March 31, 2026.

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• Unlike traditional CROs which act as external service providers to handle scattered tasks, TRIAPEX is strategic R&D partner for clients,offering end-to-end services covering entire process from drug discovery to NDA.
• Monkeys, as biological assets, have their fair value changes directly recorded in profit statement, acting as an “amplifier” for TRIAPEX’s performance. This will lead to significant fluctuations in future performance.
• TRIAPEX’s valuation would be lower than Joinn Lab. The final valuation depends on  the price trend of laboratory monkeys and the overall valuation of biopharmaceutical sector in Hong Kong stock market.

• Meituan (3690 HK) returned to profit in 2Q26 after 3 quarters of losses.  The company had a net income of RMB 2.16B vs. a consensus loss of RMB 1.23B.
• Operating profit surged to RMB 2.69 bn, an 11-fold increase YOY, as easing competition allowed the company to reduce food delivery subsidies, improving unit economics across food and non-food categories.
• Meituan’s profit surge, combined with JD.com cutting promotional spending and Alibaba reducing sales and marketing expenses, adds to the evidence that China’s quick-commerce price war may be peaking. 

• HK Connect implementation will be effective on 7 Sep 2026 before market open, with 53 ADDs and 15 DELETEs.
• ADDs gained +5.2% on average over the bridge and DELETEs fell 10.9%. All 15 DELETEs closed the bridge lower.
• Historically, positive-bridge ADDs extended their gains in the first implementation week and negative-bridge ADDs were flat. DELETEs kept falling. We place each group in its historical reference set below.

• The HS TECH rebalance will be effective on 7 Sep 2026 before market open, with one ADD and one DELETE.
• Iluvatar Corex’s bridge return was -5.0% and Tongcheng Travel’s was -10.0%, both following declines in the pre-announcement window.
• Both names fall into negative-bridge historical groups. Those groups mostly extended lower into the first implementation week.

• HSI rebalance will be effective on 7 Sep 2026 before market open, with two ADDs.
• Hua Hong Grace returned -4.4% and Weichai Power -3.8% over the bridge. Both fell on the first trading day after announcement, then recovered part of the loss.
• Historically, negative-bridge ADDs declined in the first implementation week in most cases. Both names belong to that group.

• I summarise the latest spreads and newsflow for the merger arb situations covered across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, the Philippines, Thailand, and Chinese ADRs.
• Highest spreads: Skyworth (751 HK), Changhong Jiahua (3991 HK), European Lithium (EUR AU), Z Fin (1168 HK), OFX Group (OFX AU), Cleanaway Waste Management (CWY AU), Atlantic Lithium (A11 AU). 
• Lowest spreads: Accent Group (AX1 AU), FleetPartners Group (FPR AU), Kakaku.com Inc (2371 JP), Vault Minerals Ltd (VAU AU), Ausgold Ltd (AUC AU), Japan Property Management Center (3276 JP).

• Hua Hong Grace (1347.HK) reported Q2 2026 revenue of $717.5 million, up 26.8% YoY and 8.6% QoQ, a record high and easily beating the guided midpoint of $695 million
• Gross margin reached 16.5%, up 5.6 percentage points YoY and 3.5 points QoQ, clearing the top end of the 14-16% guide.
• Looking ahead, the company forecasted current quarter revenues of $775 million at the midpoint, a roughly 8% sequential increase. Gross margin is expected to be ~17%, marginally up QoQ.

• 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, both SHEIN Global Holdings (625 HK) and Mech-Mind Robotics Technologies  failed to do much.
• On the placement front, deals continued to flow in across the region, throughout the week.

• Shenzhen International (152 HK)‘s loss-making 1H26 is disappointing, but looking ahead, the potential profit recovery in 2H26 is more important.  
• It may potentially book a significant gain from the South China Logistics Park transformation in 2H26, possibly leading to an attractive dividend yield of 8.7%.
• Its 0.33x 12-month forward P/B, 2SD below average, has already discounted the market concerns. Stripping out Shenzhen Expressway (600548 CH) , its other assets are free. 

• CCSH Corporation (CCSH CH) aims to raise Rmb33bn in its IPO in the A-share STAR market. The Shanghai Stock Exchange has accepted its application and started enquiries.
• Its leadership position will ride on the encouraging industry outlook. It has the technological strength and a comprehensive product mix which fits well into China’s tech self-reliance push.
• While loss-making in FY23, it turned into a net profit of Rmb14.2bn in FY25. For 1Q26, net profit reached Rmb33.4bn, or 135% higher than FY25, highlighting its profitability. 

• The S086 (Xinchaotuo) Commercial Execution is the Real Growth Driver: Following its May 2025 NMPA approval for primary hypertension and its subsequent December 2025 inclusion in the National Reimbursement Drug List (NRDL), S086 has become Salubris’s primary growth engine. Along with Enarodustat (Enaro), innovative formulation revenues grew 26.84% year-on-year in the first half of 2026, offsetting the commoditized legacy generic portfolio.
• The JK07 Phase II Clinical Disappointment Redraws the Valuation Curve: In May 2026, the interim data release for the RENEU-HF Phase II trial of JK07 (an NRG-1 fusion protein) revealed that the primary endpoint of Left Ventricular Ejection Fraction (LVEF) improvement at 26 weeks did not achieve statistical significance over placebo. While Salubris highlighted positive subjective KCCQ score improvements, the lack of robust structural efficacy significantly increases the regulatory risk and delays both the domestic and U.S. clinical pathways.
• HKEX Listing Resubmission Points to Urgent Liquidity Needs: On September 3, 2026, Salubris resubmitted its listing application to the Main Board of the HKEX, sponsored by Goldman Sachs, Citigroup, and CITIC Securities, after its initial February 2026 filing lapsed in August. The push for Hong Kong capital is driven by a desire to fund expensive global clinical trials and provide a dedicated offshore capital runway, amidst close scrutiny from the CSRC regarding overseas capital allocations.

• A leading Chinese pharmaceutical company focused on the CKM sector, engaged in R&D, production, and sales of pharmaceuticals and medical devices. It seeks a primary HKEX listing, having been listed.
• The company ranked second in China’s in-hospital cardiovascular drug sales with 11.3% market share in 2025. Total revenue increased to RMB4,352.7 million in 2025.
• Gross profit was 3,247,584 RMB’000 and profit for the year was 652,784 RMB’000 in 2025. Total assets reached 11,297,803 RMB’000 as of December 31, 2025.

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• Vatai Holdings Limited is an AI-empowered global platform providing cross-border e-commerce compliance services, seeking a primary listing on HKEX. According to CIC, it was the largest provider globally and in.
• Vatai Holdings was the largest cross-border e-commerce compliance service provider globally and in China in 2025, holding 21.5% market share in China.
• Revenue was RMB528,476 and profit for the year was RMB97,175 in 2025. Net cash from operating activities was RMB269,110.

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• Tencent’s restructuring of its Bilibili holding—selling US$400 million in Class Z shares while subscribing to US$200 million of the new convertible senior notes—is a strategic hedging play rather than a retreat. It reduces Tencent’s direct equity exposure while maintaining an anchor position, helping Bilibili execute a US$300 million concurrent buyback to neutralize immediate float pressure and manage capital tax-efficiently offshore.
• Bilibili’s monetization engine has structurally pivoted to advertising, which grew 28% year-over-year in Q2 2026 to RMB 3.13 billion, overtaking Value-Added Services (VAS) as its largest revenue segment. This growth is driven by AI-powered search and multi-scenario ad distribution, though the platform faces a rigid ~10% ad-load ceiling to preserve its core user community.
• The gaming segment remains highly volatile and is shifting away from high-risk in-house R&D toward low-capex publishing. The 14% year-over-year decline in mobile game revenue to RMB 1.39 billion in Q2 2026—due to a tough comparison base from the breakout success of San Guo: Mou Ding Tian Xia—underscores the unpredictability of first-party pipelines and the structural stability of licensed, casual IPs.

• Four days into life as a publicly-traded company, SHEIN shares are down more than 21%
• If OP margin remains depressed in FY27, it appears SHEIN is still trading ~18x forward EPS
• However, even a modest OP margin lift next year implies a PER of just 11-14x

• Tencent (700 HK) aims to raise around US$400m via selling some of its stake in Bilibili (9626 HK) in HK.
• At the same time, the company will issue CB, along with a delta placement, and buyback some shares.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Ligent, a Hisense-controlled optical transceiver and optical network terminal maker, has passed the HKEX listing hearing and is seeking a Main Board listing. Citi and CITIC are the joint sponsors.
• Our prior note covered the company’s business, financials and pre-IPO investor backing.
• This note compares Ligent with listed peers from a financial, operating and valuation perspective.

• Ascentage Pharma (6855 HK) reported revenue of RMB 302.2M in 1Q26 (up 29% YoY), from the sales of pharmaceutical products, commercialization rights income from Innovent Suzhou and service income.
• R&D cost will continue to tread on a higher trajectory. Company will continue to advance enrolment in the trials and actively advance inclusion of Lisaftoclax in China’s NRDL in 2026.
• Building on the differentiated clinical profile of both products, Ascentage is well positioned to accelerate market penetration and prepare for potential new indication approvals and upcoming NRDL inclusion opportunities.

• A late-week rebound changed the tone after a soggy start with single stock option volumes following suit.
• The debut of 625 drew attention as both the shares and newly listed options began trading during a difficult week.
• Financials separated themselves from the broader market as performance across the rest of the optionable universe remained weak.

• Imminent Unconditional Takeunder: Lotus Horizon’s current trading halt (effective September 3, 2026) is highly likely the prelude to a classic shell-sale exit by the controlling shareholder, Platinum Lotus, structured as an unconditional takeunder at a massive discount (over 90%) to the pre-halt market price of HK$1.14.
• Extremely Inflated Valuation: The stock’s pre-halt valuation of 18.14x P/B (HK$2.28 billion market cap versus HK$125.66 million in net tangible assets) is a speculative bubble detached from fundamentals. A realistic transaction value for the clean listing shell would price the equity at a minor premium to net assets (HK$0.063 per share), rather than the inflated trading multiple.
• Formidable Regulatory Hurdles: For the SFC and HKEX to lift the trading suspension, the incoming buyer must navigate rigorous anti-backdoor listing rules under HKEX Listing Rule 14.54. Any prompt attempt to inject new assets or pivot the business will be classified as a Reverse Takeover (RTO), triggering a lengthy and demanding new listing application process.

• Shenzhen Longli Technology Co., Ltd. (300752 CH) is a leading Chinese designer and manufacturer of LED backlight display modules, aggressively transitioning from commoditized consumer electronics into high-value automotive Mini-LED backlights and advanced LIPO (Light Integrated Package Optics) encapsulation technologies under its ‘1+2+N’ strategic blueprint.
• Financial performance demonstrates an ongoing operational turnaround, with full-year revenue expanding from RMB 1,024.17M in 2023 to RMB 1,559.20M in 2025 (a 3-year CAGR of 7.68%), while net income expanded at a 3-year CAGR of 29.75% to RMB 60.88M in 2025, supported by stable gross margins of 14.06% and Q1 2026 revenue of RMB 367.76M.
• Despite positive long-term secular tailwinds in automotive smart cockpits, near-term valuation remains elevated at a trailing P/E of 78.0x and P/B of 2.9x (EV/Sales of 2.3x), reflecting heavy ongoing capital expenditure on the Xiamen and Huizhou smart manufacturing bases and free cash flow volatility (-RMB 105.45M in 2025).

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