China

• CATL (3750 HK) listed in May by selling 135.579m shares (including the Offer Size Adjustment Option) at HK$263/share. The overallotment option of 20.337m shares was also exercised in full.
• Nearly 50% of the IPO shares were allotted to cornerstone investors. The lock-up on those investors ends on 19 November. That increases float and will bring in passive flows.
• CATL (3750 HK) is trading at a big premium to CATL (300750 CH) and that could start to move lower as the number of free float shares increases.

• I 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: Smart Share Global (EM US), Mayne Pharma (MYX AU), ENN Energy (2688 HK), Soft99 Corp (4464 JP), Dongfeng Motor (489 HK), Joy City Property (207 HK). 
• Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Mandom Corp (4917 JP), Humm Group (HUM AU), Ainsworth Game Technology (AGI AU), Seven West Media (SWM AU). 

• 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 the December 2025 index capping flows.
• We have also presented our index change expectations for the next semiannual index review which will take place in March 2026.

• Context:Pop Mart (9992 HK) begins trading monthly options on the Hong Kong Exchange (HKEX) on Monday, 13 October 2025, marking its debut in the derivatives market.
• This Insight examines expected implied volatility, referencing both realized volatility trends and peer valuations for context.
• Why Read: Gain early insight into Pop Mart’s option launch, including option specifications and how implied volatility could set the tone for first-day trading.

• Zijin Gold (2259 HK) debuted on the HKEX on 30 September and soared more than 80% from its IPO offer price reaching a market cap of ~$44bn.
• Inclusion in Global All-World is expected in March 2026, with an upweight in June 2026 following the lock-up expiry.
• Inclusion in Global Standard is expected in May 2026 following the lock-up expiry. Inclusion in February 2026 is not unlikely despite the low float due to price surge.

• 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 our final expectations of index changes and the resultant capping flows for HSTECH index rebal event in December 2025.
• We expect one index change and roughly US$1.7bn in one-way index flows in December 2025.

• On the 12th August, Hangzhou Kangji Medical (9997 HK) announced an Offer, by way of a Scheme, from a consortium led by TPG and Qatar Investment Authority, together with the founders.
• The HK$9.25/share consideration price (declared final), was an lacklustre 9.9% premium to last close. But pitched around a four-year high. 
• The Scheme Document is now out, with a Court Meeting on the 10th November and expected payment around the 16th December – in line with my expectations.

• Zengame Technology is a niche developer of online card and board games in China, demonstrating strong historical profitability and a commitment to shareholder returns through high dividend payouts.
• Recent financial performance indicates a significant slowdown, with declining revenue and contracting margins, reflecting intense competition and potential saturation in its core markets. The 3-year CAGR for net income is negative, contrasting sharply with its 5-year growth.
• The stock trades at a low valuation compared to peers, suggesting it could be a value opportunity if it can stabilize its user base and revenue. However, it also faces substantial risks from regulatory oversight in China and competition from dominant industry players.

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• Wingtech Technology is undergoing a significant strategic transformation, divesting its lower-margin Original Design Manufacturer (ODM) business to focus on its high-margin semiconductor operations through its subsidiary, Nexperia.
• The company is a global leader in the smartphone ODM market, but this segment has faced profitability challenges, contributing significantly to recent net losses despite accounting for the majority of revenue.
• Future growth and valuation re-rating hinge on the successful expansion of its semiconductor business, particularly in high-growth sectors like automotive, industrial, and AI, leveraging Nexperia’s strong market position in discrete semiconductors, logic, and MOSFETs.

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• Hospital operation is an asset-heavy industry with large balance of fixed assets and intangible assets. So, there is a situation of expense “front-loading” and profit “back-loading” in Puxiang.
• Puxiang’s single-digit net profit margin is unsatisfactory. Net profit CAGR is much lower than revenue CAGR. Considering VBP and DRGs/DIP, Puxiang’s future net profit performance is unsettling.
• Due to concerns on profitability and future growth outlook, we think valuation of Puxiang should be lower than Topchoice, Aier, Hygeia, Jinxin, but could be higher than China Resources Medical

• Context: Friday’s sell-off occurred after the Hong Kong market closed, but several Hong Kong–listed companies were caught up in the rout through their U.S.-listed ADRs.
• This Insight details the impact on 15 prominent Hang Seng Index constituents — including Alibaba, Tencent, and HSBC. Implied volatility in U.S.-traded options on these ADRs moved sharply in response.
• Why Read: Understand what to expect when the Hong Kong market reopens after the weekend — both in terms of price performance and implied volatility.

• A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
• ECM developments: FineToday Holdings (420A JP), Tekscend Photomask (429A JP), Tata Capital Limited (TATACAP IN), LG Electronics India (123D IN), JST Group (1703609D CH) IPOs.
• Event-Driven developments: Hang Seng Bank (11 HK), Shengjing Bank Co Ltd H (2066 HK), Soft99 Corp (4464 JP), Toyota Industries (6201 JP), Infomedia Ltd (IFM AU). 

• As with large, clean liquid deals in Asia-Pac, expect Hang Seng (11 HK)‘s annualised spreads to widen (i.e. gross spread remains static) as investors hit their full quota early on. 
• The question is whether Soft99 (4464 JP)‘s MBO Bidco raises the price to  ¥3,200 saying “let’s split the difference”, and that would make some people happy. It’s doubtful they will.
• Sihuan Pharmaceutical (460 HK) has benefited a little from the HK$500mn buyback programme announced last October. But a HK$11bn run up in market cap YTD? This looks stretched to me.

• The 11th national VBP has optimized the selection of price difference control “anchor points”, which is an important signal, implying that future VBP will follow the general direction of “anti-involution”.
• As long as there’s no significant difference in pipeline data, buyers are more concerned about the speed of R&D progress and may not necessarily dwell on potential advantages and disadvantages.
• Hengrui’s innovative drug revenue was slightly lower-than-expected. The Company’s 2025 employee stock ownership plan has lowered the compound growth target for innovative drugs from 30% to 25%.

• Another of China’s major state-owned automakers is expanding its collaboration with Huawei Technologies Co. Ltd., as legacy carmakers increasingly turn to the tech giant for an edge in the smart vehicle race.
• Dongfeng Motor Group Co. Ltd. Chairman Yang Qing on Monday met with Huawei founder Ren Zhengfei, stating that Dongfeng will pursue comprehensive cooperation with Huawei in areas such as corporate management, product design, smart technologies and marketing, according to a Sept. 23 company statement.
• Several of Dongfeng’s brands, including Voyah, eπ and M-Hero, have already integrated Huawei’s systems into their vehicles.

• A renewed tariff threat from Trump sparked a sharp, sell-off across North American Equity markets.
• The sell off was broad based and accordingly we look at the performance of Asian Index ETF’s that trade in North America to help prepare for Monday’s price action.
• Implied volatility, price and option volume are displayed for each symbol.

• In our previous insight dedicated to the Hang Seng Index we formulated a key question: is this going to be a small pullback or a large pullback? 
• The HSI pulled back just for 1 week, small pullback, our models were reset. But this week the index pulled back again, almost reaching Q2 support (mildly oversold).
• Then, on Friday, Trump tweeted something against China, after the Asian markets closed and all hell broke loose. The HSI Oct. futures tanked to 25300. Let’s discuss support zones…

• ImmuneOnco Biopharmaceuticals (Shanghai) (IOB HK) announced the placement of 24.2M shares for subscription at HK$14.5 per share.
• The company intends to use most of the net proceeds for further research and development of drug candidates IMM01, IMM2510 and IMM27M.
• The current market price of the stock makes the placement offer unattractive. Concerns remain with no drugs commercialized yet and the only possible commercialization expected to happen not before 2027.

• Iron ore futures rallied as Chinese steel mills restocked post-Golden Week holiday, despite weak margins and persisting trade policy uncertainty.
• Managed money participants expanded net long positions, signalling sustained bullish conviction.
• The 65%-62% spread fell sharply while the 62%-58% spread surged, marking pronounced divergence in grade spreads following the post-holiday sessions. 

• Hong Kong equities erased last week’s gains, with further losses on Monday likely after Trump’s social media post Friday morning.
• Weakness was not widespread, though there was a sharp reversal in breadth week over week.
• Option volumes and ratios suggest there’s little concern in the market at this point.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Greentown China, Sunny Optical
• UST yields rose 1-2 bps across the curve yesterday, amid a soft auction of 30Y notes that tailed marginally by 0.4 bps despite strong bidding metrics.
• The yield on the 2Y UST rose 1 bp to 3.59%, while that on the 10Y UST was up 2 bps at 4.14%. Equities retreated, with the S&P 500 and Nasdaq declining 0.3% and 0.1%, respectively.

• Chery Automobile Co. Ltd. made a strong debut on the Hong Kong Stock Exchange Thursday, raising HK$9.2 billion ($1.2 billion) in the city’s largest carmaker IPO of the year and seeing its shares soar as much as 11.2%.
• Shares closed at HK$31.90, up 3.7% from the IPO price of HK$30.80, giving the company a market capitalization of HK$184 billion — placing it nearly on par with rival Geely Automobile Holdings Ltd.
• The listing marks a major milestone for the state-owned automaker, founded in 1997, after several failed attempts to go public.

• Hang Seng Bank (11 HK) has announced an Offer from controlling parent (63.3551%), HSBC Holdings (5 HK), by way of a Scheme, in a HK$106bn (US$13.6bn) deal. 
• The Scheme Consideration is HK$155/share, a 30.3% premium to last close. The price is final. A “third interim dividend” will be added. Optically, the price is bang on.
• The long stop for conditions is the 30th September 2026. I think this transaction can be wrapped up in around five months. 

• Hang Seng Bank (11 HK) announced a scheme privatisation offer from HSBC Holdings (5 HK) at HK$155, a 30.3% premium to the undisturbed price.  
• Based on an estimated 2025 third dividend of HK$1.3 per share, the total consideration is HK$156.30 per share. The offer price is final.
• The offer is attractive compared to peer multiples and historical trading ranges. At the current price and for a late March payment, the gross/annualised spread is 2.9%/6.2%.

• The Hang Seng Index is the benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.
• In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in December 2025.
• The index changes are expected to be confirmed on 21st November 2025.

• InnoScience Suzhou Technology (2577 HK) aims to raise around US$200m in its Hong Kong placement.
• Innoscience was only listed in Dec 2024 and it undertook another primary raising in July 2025, the lockup for which has yet to expire.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
• In this insight, we take a look at the potential index changes and capping flows for HSCEI index rebal event in December 2025.
• We expect three ADDs and three DELs for December 2025. We also estimate there to be US$303mn in one-way flows.

• Dickson Concepts trades at a 40% discount to net cash, with a market cap of HK$2bn and HK$3.3bn in cash.
• Founder Dickson Poon attempted privatization at HK$7.20/share, blocked by minority shareholders with 10.16% voting against.
• Business remains profitable despite downturn, with average net income of HK$200m and HK$1.4bn operating business value.

• Total deliveries grew by 35% YoY in Sep. 2025 and 43% YoY in 3Q25.
• BEV (Battery Electric Vehicle) deliveries were double of the same period last year.
• We believe the stock has at least 29% upside for next 12 months.

• With a 37.3% rally in Shanghai Electric Group Company (2727 HK)‘s share price in the last 5 trading days, it is poised for a correction, which is a long-term opportunity. 
• Key positive drivers include its Fanuc Robots earnings, progress in China’s nuclear fusion project, solid new order momentum, and speculation on asset acquisition.
• PER valuations are not cheap, but this is understandable due to the company’s transition. However, its 1.5x P/B multiple is not outrageously expensive relative to peers.

• Sirius Therapeutics, a China-based clinical-stage biopharma company, is looking to raise at least USD 100 million via a Hong Kong listing. GS, Haitong, and HSBC are the joint sponsors.
• In this note, we look at the company’s core products, SRSD107, and the key product SRSD216.
• We also look at the company’s pre-IPO investors and management team.

Key points (machine generated)

• Hong Kong-listed bubble tea companies are seen as classic fad stocks, presenting short-selling opportunities.
• Guming is highlighted as the preferred choice for short-selling due to its available borrow, while Nayuki serves as a cautionary example of decline.
• The author compares the bubble tea trend to previous restaurant fads, indicating a pattern of declining growth and increased competition.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• On the 12th November 2024, Sihuan Pharmaceutical (460 HK) proposed spinning-off the shares of Xuanzhu Biopharm on the main board of Hong Kong.
• Xuanzhu Biopharmaceutical‘s prospectus is now out. Shares are priced at HK$11.60/share, backing out a market cap of ~HK$6bn vs. Sihuan Pharma’s HK$17.4bn market cap. Trading commences on the 15th October.
• Sihuan Pharma will hold 49.1% post IPO. Its share price is up 189% YTD. Looks frothy. Then again, so does Hong Kong’s IPO market.

• WuXi AppTec (2359 HK) is looking to raise US$308m via selling some of its stake in WuXi XDC Cayman (2268 HK).
• The deal is a small one, representing 4.5 days of the stock’s three month ADV, and 2.3% of total shares outstanding.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• World’s Largest Footwear Manufacturer: Yue Yuen is the global leader in athletic and casual footwear manufacturing, producing for top-tier brands like Nike, Adidas, and New Balance. Its immense scale provides significant competitive advantages.
• Dual Business Model with Integrated Retail: The company operates a core manufacturing (OEM/ODM) business and a significant sportswear retail and distribution arm in Greater China, Pou Sheng International (3813 HK). This provides diversification and end-to-end solutions for its brand partners.
• Challenging Near-Term Outlook but Attractive Valuation: While facing headwinds from rising labor costs, geopolitical uncertainties, and soft consumer demand in its retail segment, the company’s valuation appears compelling. Strong recent growth in net income and a high dividend yield present a potentially attractive risk/reward profile for long-term investors.

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• Guangdong Chj Industry Co A (002345 CH) (CHJ) submitted an application to list H-shares on the Main Board of the Hong Kong Stock Exchange.
• Despite higher valuation multiples, the company has been able to successfully generate higher sales and profits in the past several years. 
• The high and rising global gold prices have created a strong loyal customers and investor base that could positively impact this IPO on the HK Stock Exchange. 

Key points (machine generated)

• Modern Dental (3600) manufactures and distributes dental prosthetics with a potential for over 15% CAGR from a share price of HKD 4.35.
• The company generates approximately 75% of its revenue from developed markets despite its primary manufacturing facility being in Shenzhen, China.
• Modern Dental is well-positioned to benefit from the growing global reputation of Chinese manufacturers for quality and competitive pricing.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Leading Integrated Water Solutions Provider in China: Beijing Enterprises Water Group (BEWG) is a dominant player in China’s water treatment industry, boasting the largest water treatment capacity in the nation. The company operates an extensive network of over 1,400 water and sewage treatment plants across China and has expanded its presence internationally.
• Strong Government Backing and Strategic Focus: As a state-owned enterprise, BEWG benefits from significant government support, facilitating access to financing and project approvals. The company is strategically shifting towards an asset-light model, focusing on technology and operational services to enhance efficiency and reduce capital expenditure.
• Favorable Industry Tailwinds Driven by Regulation: China’s increasing focus on environmental protection, underscored by stringent government policies like the “Water Ten Plan”and the “Dual Carbon”goals, creates a robust demand for advanced water treatment solutions. This policy-driven market expansion provides a long-term growth runway for BEWG.

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• MUYUAN’s 25H1 performance growth was strong. The core driving force lies in the Company’s continued implementation of cost reduction and efficiency enhancement strategies, which have achieved satisfactory results.
• Inflation expectations would push up hog prices. If the price can fluctuate within the range of RMB14-18/kg in next three years, it will provide a favorable profit environment for MUYUAN.
• Valuation of MUYUAN should be higher than peers and the industry average. We raised our 2025 forecast. Based on 2025 net profit forecast, market value is about RMB240-300 billion.

• JST Group (1703609D CH) is China’s largest e-commerce SaaS ERP provider. It is seeking to raise US$250 million to US$300 million.     
• JST (Jushuitan) is China’s largest e-commerce SaaS ERP provider in terms of relevant revenue in 2024, with a market share of 24.4%, according to CIC.
• The investment case is bullish due to robust book-to-bill ratios, strong growth, high contract liabilities, underlying profitability and cash generation.  

• Strategic Pivot to Renewables: China Resources Power is aggressively expanding its renewable energy portfolio, particularly in wind and solar, aligning with China’s national decarbonization goals. This transition is set to be a primary driver of future growth and valuation re-rating, though it requires significant capital expenditure.
• Improving Profitability in Thermal Power: After a challenging period of high commodity prices, the company’s thermal power segment is experiencing a significant recovery in profitability. This is largely due to moderating coal prices and favorable government policies, which are enhancing earnings and cash flow in the near term.
• Attractive Valuation and Shareholder Returns: The company trades at a compelling valuation relative to its earnings and book value, complemented by a strong and growing dividend yield. This combination of value and income is attractive to institutional investors, supported by a robust financial performance recovery.

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• Xuanzhu Biopharmaceutical has filed for IPO to raise up to HK$781M. The company plans to sell 67.3M shares at HK$11.6 per share.
• Xuanzhu Biopharmaceutical is an innovation-driven biopharmaceutical company focused on developing treatment options in the fields of digestive diseases, oncology and non-alcoholic steatohepatitis (NASH).
• 2026 will be an inflection point for the company with all three core products fully commercialized, but will not be enough for the company to establish a sustainable market play.

• Semi-Tech Group (1890554D CH) is looking to raise at least US$200m in its upcoming Hong Kong IPO. The deal will be run by Deutsche Bank, CICC and Guotai.
• It is a leading provider of intelligent industrial software solutions in China.
• With strong commercialization capabilities, ST is one of the few China-based advanced-industry intelligent manufacturing software companies to achieve profitability.

• Sa Sa International Hldgs (178 HK)‘s 1.63x P/B is near-trough level, but the recovery in earnings in FY26 (+56.4%) and improving industry figures suggest earnings have bottomed. 
• Its 2Q FY26 turnover grew 8.4%, accelerating from 4.7% in 1Q and -9.7% in FY25. The 1H turnover equals 49.3% of FY26F (vs. 47.2% historically). We see upgrade potential.
• With net cash amounting to 19.3% of the share price, its 15.9x and 12.4x PERs for FY26F and FY27F do not look stretched.

• Midea will achieve double-digit growth in 2025. As domestic home appliance market enters a stage of competition for existing customers, B-end market and overseas markets have become new growth keys.
• The development path of three giants becomes clear – Midea pursues full industry chain synergy with diversified layout/digital capabilities.Haier builds a global brand matrix through high-end/localized operations.Gree is lagging behind.
• For mature industry leading enterprises, 10-18x P/E is reasonable, or market value of RMB430-855bn based on Midea’s 2025 net profit forecast. Considering higher growth, valuation would be higher than Haier.

• U.S. tire shipments projected at a record 340.2 million units in 2025  
•  Dynamics shift, with Chinese tire imports falling and SE Asian imports rising  
• Top players pursue expansion, innovation, and portfolio revamp  

• Horizon Robotics is a leading provider of integrated hardware and software solutions for Advanced Driver-Assistance Systems (ADAS) and autonomous driving (AD) in China, positioning it to capitalize on the country’s rapidly growing smart vehicle market.
• The company is expected to experience significant near-term tailwinds from passive capital inflows due to its inclusion and increased weighting in major stock indices, as highlighted by Smartkarma analyst Brian Freitas.
• While demonstrating explosive revenue growth, the company remains in a high-investment phase, characterized by substantial operating losses and negative cash flow, reflecting the capital-intensive nature of the semiconductor and AI industries.

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• Remegen (9995 HK) recorded revenue of RMB 1.1B, a 48% rise YoY, driven by robust sales growth of telitacicept (treatment of autoimmune diseases) and disitamab vedotin (treatment of solid tumors).
• Remegen entered into a license agreement with Vor Biopharma (telitacicept global rights) and Santen (RC28-E rights in China and other few countries). Upfront payments to reflect in revenues in 2H25.  
• Vor Biopharma is conducting a global multi-center Phase III clinical trial (first patient enrolled in August 2024, in U.S) of telitacicept for the treatment of patients with myasthenia gravis (gMG).

• On the 22nd August 2025, SOE-backed Dongfeng Motor (489 HK) announced a privatisation; together with a concurrent listing of its EV arm, VOYAH.
• Dongfeng has now released the application proof for VOYAH, with finances through to July 2025. Of interest, VOYAH is in the black for 7M25.
• The market is implying a price-to-trailing-sales of 1.5x for VOYAH versus the basket average of 2.1x.

• Zijin Gold (2259 HK) , post the meteoric rise in its share price since listing last week, is now the most expensive gold miner stocks, globally, on an EV/Reserve basis.
• Investor expectations of gold prices climbing higher, driven by the yen’s sharp drop, a U.S. government shutdown, and growing anticipation of additional Federal Reserve rate cuts, are fueling the stock.
• For Hong Kong investors, Zijin Gold is the only pure-play, globally diversified gold miner, with expectations of index inclusion and strong demand driving its share price above fundamentals.

• PDD Holdings, Inc.’s second-quarter 2025 financial results reflect a strategic focus on long-term value creation rather than short-term financial gains.
• The company’s revenue for the quarter increased by 7% year-over-year to RMB 104 billion, driven primarily by online marketing services and transaction services.
• However, operating profit experienced a significant decline of 21% year-over-year, reflecting the company’s substantial investments in enhancing its platform ecosystem through its RMB 100 billion support program aimed at bolstering merchant capabilities and fostering sustainable growth.

• Milian Technology, a fast-growing marriage and dating platform in China, filed for an IPO in Hong Kong. The company has achieved significant traction with now ~10M avg. MAUs.
• Milian Technology has raised ~US$77M in equity financing to date from investors, including Xiaomi, XVC Fund, Shunwei Capital, and Sky9 Capital, among others.
• I believe Milian Technology’s growth is exceptionally high for any online social networking platform company in China at such scale.

• Xuanzhu, a China-based commercial stage biopharm, launched its IPO to raise at least USD 100 million via a Hong Kong listing.
• In our previous note, we have examined the company’s core product, including XBP-3571, XZP-3287, and XZP-3621, and its management team and investor backing.
• In this note, we look at the deal term. We think the valuation is demanding and lacks institutional interest.

• Tencent Music Entertainment Group’s second quarter of 2025 demonstrates a blend of growth across its diversified service portfolio, delivering a robust financial performance and showcasing strategic advancements in both content and platform services.
• Positively, the group’s revenue reached a record high of RMB 8.4 billion, representing an 18% year-over-year increase.
• This growth was primarily fueled by its online music services, which saw a notable 26% year-on-year revenue increase, reaching RMB 6.9 billion.

• China Mobile (941 HK) and Meta (META US) are both oversold according to our quantitative tactical models.
• We have been discussing China Mobile (941 HK) before, in early September, we said the pattern was bearish (“brief rally then down again”) , but now this has changed.
• Meta (META US) is a different story, looks like a bearish pattern but it is very oversold, it could rally 2 weeks before going lower.

• Tong Ren Tang’s performance growth is mainly driven by M&As, or “purchase revenue externally” to expand scale. As the pace of acquisition/integration slows down, overall growth will also decline accordingly.
• Although Tong Ren Tang has turned losses into profits, the Company is still in expansion period and profits are unstable.So, we think it’s more appropriate to use P/S for valuation.
• Tong Ren Tang is inferior to Gushengtang in terms of profitability and capital operation model for expansion. So, Tong Ren Tang’s valuation should be lower than Gushengtang and industry average.

• UMP Healthcare (722 HK) reported soft results for FY25, with revenues/core net profits down 3%/10% YoY, due to a weak consumer spending environment in Hong Kong. 
• Cost-Cutting initiatives helped boost EBITDA margins, with PBT remaining flat despite a decline in revenue; however, a higher effective tax rate resulted in lower profits.
• The company has HKD 330 million in net cash, representing more than 80% of its market capitalization, with a trailing P/E multiple of 12.4x and a dividend yield of 6.7%. 

• On 22 August, Dongfeng Motor (489 HK) disclosed a pre-conditional privatisation by merger by absorption by Dongfeng Motor Corporation, along with a proposed distribution and listing of VOYAH shares.
• The VOYAH application proof, filed on 2 October, points to strong fundamentals and suggests that the appraised value of VOYAH and the offer are conservative. 
• Based on the data points from the application proof, I calculate that the implied offer is HK$12.11-12.25 per H Share, a 11.6%-12.9% premium to the appraised value of HK$10.85. 

• In a pick-up in primary market activity, there have been 25 new listings on the Main Board of the HKEX (388 HK) in Q3.
• Zijin Gold (2259 HK) will be added to the HSCI after market close on 15 October and should be added to Southbound Stock Connect from the open on 27 October.
• There could be 4 (maybe 5) additions to the HSCI Index in December and 3 of those stocks will be added to Southbound Stock Connect from the open 8 December.

• Materials, Healthcare and Tech sectors continue to lead the Hong Kong Secular Bull Market higher. The tech sector has been re-rating since Alibaba (9988 HK) announced its AI chip.
• Momentum, Growth, and Liquidity factors have led the Hong Kong market performance year-to-date.  Southbound flows into the Hong Kong market continue at historically high levels.
• Kingsoft Cloud Holdings (3896 HK) was rated a BUY by Deutsche Bank with its initial target price of HK$11.  Shenwan Hongyuan initiates coverage of CaoCao (2643 HK) a BUY.

• I 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: Smart Share Global (EM US), Mayne Pharma (MYX AU), ENN Energy (2688 HK), Soft99 Corp (4464 JP), I Net Corp (9600 JP), Daiseki Eco. Solution (1712 JP).
• Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Humm Group (HUM AU), Mandom Corp (4917 JP), Seven West Media (SWM AU), Ainsworth Game Technology (AGI AU).

• New Chinese regulations mandate risk sharing with banks, likely raising Qfin’s platform CoR. Management is responding conservatively with tighter controls and higher provisioning before Oct 2025.
• Strong 2024, early 2025 profits were supported by low CoR. Based on peer analysis, a conservative 4% CoR is assumed for Qfin’s platform, which lacks underwriting or credit guarantees.
• Regulatory impact lowers expected RoE by ~2pts. With an 18% CoE, fair value is ~$43/share, implying ~60% total return and supporting a positive investment outlook.

• 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, all of the listings this week ended up doing well.
• On the placements front, given the holiday shortened week in Hong Kong and India, there were no major placements this week.

• Chow Tai Fook Jewellery (1929 HK) is one of the best-performing Hang Seng Index (HSI INDEX) constituents YTD, but it is time to take some money off the table.
• At 5%, its 12-month forward dividend yield is about the lowest in the last five years, implying limited share price upside. Valuations have run ahead of earnings momentum.
• The recent recovery in Hong Kong jewellery retail sales is partly due to the low base effect. Additionally, a higher gold price will weigh on demand for gold products. 

• Saint Bella (2508 HK) achieved 1H25 revenue of RMB 449.5M (up 26% YoY) driven by higher sales from postpartum business (up 25% YoY) as number of postpartum centers increased.
• The company opened 36 stores in 1H25 and average contract value of postpartum recovery sales at all service brands witnessed rise (Bella Isla saw highest increase, up 36% YoY).
• With no major growth hurdles visible for Saint Bella, secular demand in place and with consistent capacity additions it is worth to buy the stock at this point of time.

• Context: Volatility cones provide a straightforward framework to evaluate whether options are trading cheap or rich. This Insight provides volatility analysis for 8 prominent Hong Kong stocks and the benchmark index.
• Highlights: In contrast, Alibaba’s IV remains rich, while Hang Seng Index IV is cheap across the curve, offering attractive hedge entry points.
• Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.

• Despite TONGSHIFU’s leading position through vertically integrated business model, the inherent limitations of the industry are obstacles for further expansion. Performance growth is clearly constrained by the overall market capacity.
• The “double attack” market pattern makes it more difficult for TONGSHIFU to achieve breakthrough growth within the existing market. Outside of copper-based products, TONGSHIFU hasn’t found a second growth curve.
• TONGSHIFU’s valuation should be lower than Pop Mart/Laopu Gold/Bloks due to the big gap in growth potential/profitability/cashability. However, valuation could be higher than industry average due to leading market position.  

• The Labubu craze has resulted in a ~200% increase in Pop Mart (9992 HK)’s shares YTD. MINISO (9896 HK)‘s TOP TOY will be wanting to cash in on this exuberance.
• Those who want to buy Sony Financial (8729 JP) may wait until earnings. If shares stayed flat for a month until earnings came out, don’t short the eve of earnings.
• Zijin Mining Group (2899 HK) is fully valued as Zijin Gold (2259 HK)  trades at a 100% premium to peers on forward PER and EV/EBITDA multiples. 

• Mufemilast will face fierce competition and price reduction due to NRDL negotiation for related indications. For autoimmune disease drugs, overseas market space and ceiling are much higher than in China.
• Hemay022’s market space is narrower than pan HER2 inhibitors and HER2 ADC. There is still uncertainty in efficacy/safety profile. Hemay022 will face challenges in terms of commercialization after market launch.
• The current valuation logic for innovative drugs in China has changed. Without decent licensing cooperation, Hemay’s valuation will be discounted. Valuation of Hemay should be lower than peers.

• HSI extended gains to fresh highs, supported by strong breadth, surging Materials and IT names, and rising single stock option activity
• Broad gains across all sectors highlighted strong momentum, with leadership from Materials and Information Technology.
• We examine the distribution of returns since the April lows finding that the tails are distinctly unbalanced.

• As Zijin Gold (2259 HK)‘s share price defies gravity, so does Zijin Mining Group Co Ltd H (2899 HK)‘s.
• Full disclosure: I misread the room. I thought Zijin Gold was fully priced at HK$71.59/share. As was Zijin Mining. Zijin Gold is now up 92% and Zijin Mining 20%.
• Zijin Gold currently trades at a 100% premium to peers on forward PER and EV/EBITDA multiples. 

• Negative steel mill margins will likely result in production cuts that could adversely impact the near-term demand for iron ore. 
• Beijing’s stricter stance on BHP and Simandou’s safety-related suspension are altering the iron ore power dynamics and tightening supply.
• Bearish MA crossover and weakening MACD signal fading momentum, with prices below key MAs, pointing to increasing downside pressure.

• BYD (1211 HK) is currently in a position from where it could rally. Our previous insight suggested a possible bottoming area around 100.9 but the stock never reached that low.
• This week the stock rallied to 114.7, then pulled back. If the stock is temporarily bottoming, it could rally past 115 and up to 130 from here. 
• According to our TIME MODEL the duration of the rally could be up to 3-4 weeks (2-3 more weeks up from here).

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Logan Group
• The UST curve flattened marginally yesterday, as long-end yields declined marginally while the short end was stable.
• Trading volumes were reported to be below average, as macro releases were stalled in the second day of the US government shutdown.

• Key 1H25 takeaways include: 1) As previously disclosed, MFI’s co-founders recently sold the company to Fire Lucky Investment Co., controlled by Mr. Dawei Yuan.
• Looking ahead, we would not be surprised to see Mr. Yuan increasingly leverage his considerable background/expertise, particularly as it relates to digital assets, to shift MFI’s strategic vision/business model, thereby enhancing the company’s growth prospects, revenue profile, and earnings power over time.
• 2) In September, MFI filed a prospectus as part of a previously-filed “shelf” registration statement to potentially raise up to $700 million via the sale of equity, debt, and/or warrants.

• Viomi filed its Form 20-F annual report with the SEC, and the audited financial statements did not materially change from the preliminary results released roughly six months ago in March.
• We will update our complete model and review our price target once the complete first-half results are released later this month.
• Viomi introduced a new high-end filtration system for the US market and announced several new marketing initiatives in China ahead of the key shopping holidays in November and December.

• We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.
• Our bullish near-term outlook will remain in place as long as the 4+ month uptrend continues on ACWI-US. Remain aggressively long/continue to expect more upside into year-end and the early2026.
• Europe’s EURO STOXX 50 is breaking out from its 7-month base, above the crucial 5500 level, and RS is attempting to reverse its 5-month downtrend — buy.

• CK Hutchison is a global conglomerate with leading positions in ports, retail, infrastructure, and telecommunications, offering significant diversification benefits.
• The company is currently trading at a substantial discount to its intrinsic value, indicated by low price-to-book and price-to-earnings ratios, presenting a potentially attractive entry point for long-term investors.
• Significant uncertainty surrounds the company due to a major pending sale of its port assets, which faces considerable geopolitical and regulatory hurdles, making it a key catalyst and risk.

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