China

• Alibaba (9988 HK) / Alibaba (BABA US) has announced a placement of HK$80bn (US$10.2bn) to invest in its full stack AI capabilities and to expand and enhance its AI infrastructure.
• The shares are being offered at HK$112.7/share, an 8.4% discount to the Alibaba (9988 HK) close and a 3.6% discount to the Alibaba (BABA US) close.
• There will be passive buying from trackers of one global index later this week, while trackers of the other global index will buy in November. No impact for local indices.

• Alibaba (9988 HK)  is looking to raise around US$10bn to fund its AI spending.
• Alibaba (BABA US) recently reported its 1H26 results, with elevated AI capex and negative free cash flows.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• There are 61 adds and 15 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 580.
• Of the 61 HSCI inclusions, 6 are already a part of StockConnect. 54 stocks will be added from the open 7 September. All 15 deletion will be removed from StockConnect.
• Stocks that are expected to be added to Southbound Stock Connect have massively outperformed stocks that are expected to be removed from Southbound Stock Connect over the last 3 weeks.

• HSIL announced the Sep 2026 rebalance results, with two ADDs and no DELETE.
• Hua Hong Grace and Weichai Power join the HSI on 7 Sep 2026.
• Both ADDs fell into the announcement. Historically, positive opening gaps averaged -2.3% post-open, so we wait for the open before sizing.

• HS TECH September 2026 review announced one ADD and one DELETE.
• Iluvatar Corex enters and Tongcheng Travel leaves, effective 7 Sep 2026.
• Both names fell into the announcement in the pre-announcement window. Historically, comparable ADDs kept rising after the open, and comparable DELETEs rebounded after announcement day.

• The September 2026 HSCI review adds 53 names to southbound Connect, 49 new and 4 returning, and removes 15, all effective 7 Sep 2026.
• The announced list ran wider than our forecast. 33 of our 36 ADD calls and 14 of 25 DELETE calls were announced.
• Current ADDs rose into the announcement and DELETEs fell. Historically, ADD-NEWs outperformed ADD-REJOINs over the bridge, while DELETEs fell further after announcement.

• Zhuhai Kingsware Artificial Intelligence Co., Ltd. is an AI company providing AI digital worker and enterprise-grade agent solutions. It ranked first in China’s AI digital worker solutions market by revenue.
• Zhuhai Kingsware deployed over 2.0 million AI digital workers and serves over 1,600 clients, including 120+ Fortune Global 500 companies.
• The company reported revenue of RMB256,097 in 2025 and a loss for the year of RMB(345,635) in 2025. Net liabilities were RMB1,578,703.

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• 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, SHEIN Global Holdings (SHEIN HK) is set to launch this week/today, as per media reports, while deal in India continue to flow in.
• On the placement front, Alibaba (9988 HK) launched the largest HK primary raising yet on Sunday. 

• Eaglerise Electric & Electronic (CHINA) Co., Ltd. is a global supplier of power equipment and solutions, leveraging proprietary core technologies and R&D capabilities, specializing in transformer equipment.
• The company ranked second among China-based suppliers in the global medium-voltage transformer equipment market with a 2.3% share in 2025.
• Gross profit margin decreased from 21.7% in 2023 to 17.6% in 2025.

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• SSI New Material (Zhenjiang) Co., Ltd. is an electronic functional enhancement materials company with an established presence across four key material types. Its products enhance performance in consumer electronics and.
• The company ranked first in global acoustic enhancement materials with 20.0% market share in 2025, and revenue increased by 76.1% in 2025.
• Gross profit margin decreased from 56.1% in 2024 to 46.6% in 2025, and net profit may decline for the year ending 2026.

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• Junlebao Dairy Group Co., Ltd. is a reputable Chinese dairy company with over 30 years of experience. It ranked No. 3 in China’s dairy market in 2025 with a 4.3%.
• The company operated 33 dairy farms and 20 dairy production facilities across China as of June 30, 2026, cooperating with approximately 5,200 distributors.
• The company reported a net loss attributable to owners of (21,442) in 2023 and net current liabilities of 5,276,220 as of December 31, 2024.

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• Panacro (Hangzhou) Pharmaceutical Consulting Co., Ltd. is a clinical CRO based in Hangzhou, China, advancing clinical research through digital transformation. It provides clinical trial technical services to accelerate drug development.
• Proprietary digital infrastructure integrates CTMS, eTMF, and CTFS across the full project lifecycle. The company reported a gross profit margin of 38.9% in 2025.
• Net cash generated from operating activities was RMB46,583 thousand for the six months ended June 30, 2026.

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• In 1H26, Shanghai Conant Optical (2276 HK) reported revenue rise of 8% YoY buoyed by growth across segments like multifunctional lens (up 12%) and customized lens (up 37%).
• In 1H26, the company kept up with its consistency of expanding its gross margins period after period, as margin expanded from 41% in 1H25 to 42.9% in 1H26.
• Shanghai Conant’s demand outlook, capacity expansion plans, R&D initiatives and margin strength offer a strong long term secular growth story.

• Medcaptain Medical Technology is a global medical device provider with a product portfolio across life support, minimally invasive intervention, and in vitro diagnostics, serving over 140 countries and regions.
• The company ranked first in China’s infusion workstation market from 2018 to 2025, reaching over 6,000 hospitals in China and 140 countries globally.
• FY2025 revenue was RMB1,619,152 thousand, and gross profit was RMB869,660 thousand. The company reported a net loss of RMB96,617 thousand in FY2024.

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• A weekly summary of key developments in ECM and Event-Driven names that I track in Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India, and Chinese ADRs.
• ECM developments: SHEIN Global Holdings (SHEIN HK) and GCash (Mynt) (GCASH PM) IPOs; Lintec Corp (7966 JP) secondary offering.
• Event-Driven developments: Baudroie (4413 JP), Ausgold Ltd (AUC AU), Carnaby Resources (CNB AU), EQT Holdings (EQT AU), European Lithium (EUR AU), Steadfast (SDF AU), Reliance Worldwide Corp (RWC AU). 

• SKG’s 16.5% revenue growth in 2025 masks a fundamental shift toward lower-margin physical massagers and unprofitable smartwatches, exposing the company to severe margin compression as the gross margin dropped from 50.7% to 48.2% in early 2026.
• The company operates primarily as a discretionary consumer electronics player rather than a sticky medical-utility brand, with demand heavily dependent on high-cost marketing funnels (sales expenses rising to 23.6% of revenue) and seasonal gifting cycles rather than clinical necessity.
• Competitively, SKG is trapped between Breo’s high-end niche and a brand-licensing onslaught from Philips, which has flooded e-commerce channels with cheap, licensed massagers, forcing SKG to outsource 66.1% of its volume to match competitor pricing.

• Direct-drive technology is not a universal replacement for traditional harmonic gear reducers in robotics; instead, a structural bifurcation is occurring. Direct-drive (DD) and quasi-direct-drive (QDD) architectures excel in high-dynamic, low-load, and impact-resistant applications (such as legged robots and consumer sweepers), but traditional harmonic drives maintain an unassailable advantage in heavy-payload, high-stiffness, and ultra-precision industrial arms.
• Direct Drive Tech operates with an extreme customer concentration risk that severely limits its pricing power and compresses margins. The top five customers accounted for 85.7% of 2025 revenue and 81.3% in 1H2026, with a single Suzhou-based consumer robot giant contributing 53.6% of sales in 1H2026. This dependency forces the company to accept low single-digit margins on its high-volume, RMB 29 consumer-grade motor modules, while its high-tech humanoid joint modules and complete robots remain commercial footnotes.
• The company’s massive GAAP losses are driven by non-operating accounting liabilities, but its actual cash burn makes the post-IPO capital runway highly critical. Although the RMB 881 million net loss in 2025 was inflated by RMB 770 million in fair value changes of preferred share redemption liabilities, the company’s operating cash outflow of RMB 64.8 million in 1H2026 against limited cash reserves highlights its reliance on Chapter 18C IPO proceeds. If the IPO fails to price, the redemption liabilities—which escalated to RMB 1.74 billion by June 2026—could be triggered, posing an existential threat.

• CK Hutchison (1 HK) initiates a second arbitration against the Republic of Panama after Panama’s highest court annulled CKH’s port contracts earlier this year. 
• After falling post-1H26 results,  China Unicom (762 HK) is inexpensive to its parent China United Network A (600050 CH) – its hybrid domestic A-share twin 
• The “upside-down world” continues as Trump embraces North Korea, and amps up hostility towards it southern neighbour, possibly disrupting Hanwha’s acquisition of Austal Ltd (ASB AU)‘s US ops. 

• Last week, CK Hutchison (1 HK) reported a 6.1% and 6.4% lift in 1H26 revenue and underlying net profit (excluding one-off items) to HK$241.6bn and HK$12.6bn. Pretty decent numbers.
• End-July, CKH offloaded its 49% stake in VodafoneThree for US$5.8bn. No mention of the AS Watson IPO in the results or the anaylsts’ call. Reportedly it’s been delayed to 2027.
• The Panama port cessation incurred a HK$496mn hit to EBITDA. CKH has now announced a  Investment Treaty Arbitration against the Panamanian Republic, an entirely separate claim to the contractual arbitration.

• UK Telecom Exit Liquidity Windfall: CK Hutchison’s sudden £4.3 billion (€4.9 billion) cash exit from its 49% stake in VodafoneThree on July 30, 2026, completely reshapes its balance sheet. Confronted with onerous UK CMA behavioural commitments, including an £11.1 billion network upgrade, CK Hutchison opted for immediate asset monetization, generating HK$45.5 billion in cash to defend its Moody’s A2 and Fitch A investment-grade credit ratings.
• Geopolitical Squeeze and Ports Stagnation: The escalating concession dispute in Panama, highlighted by CK Hutchison filing a $1.5 billion (HK$11.7 billion) treaty arbitration on August 20, 2026, represents a broader sovereign risk read-through. This escalating dispute and national security scrutiny have indefinitely delayed the $22.8 billion global ports portfolio sale to BlackRock and MSC, forcing the company to hold onto low-growth, high-capex marine terminals.
• The Watson Valuation Standoff: The long-delayed A.S. Watson IPO remains stalled at a rigid $30 billion target valuation. Because public markets price retail peers at 7x to 9x EBITDA while CK Hutchison demands an 11x to 12x multiple to facilitate a clean exit for its 24.95% minority partner Temasek, the parent company prefers to extract high-margin retail dividends rather than accept an IPO discount.

• Earnings remained a major driver of individual stock moves, creating sharp contrasts beneath an otherwise stronger broader market.
• Option activity increased across the week, while Call participation remained relatively subdued despite the stronger equity backdrop.
• Health Care drew renewed attention as biotech enthusiasm helped lift activity and performance across the sector.

• SKG Health Technologies Co., Ltd. develops smart devices for soothing, recovery, and health management across wearables and home products. It ranked first in China’s smart soothing wearables industry by GMV.
• SKG Health Technologies ranked first globally in smart soothing wearables with 4.6% market share in 2025, holding 1,554 registered patents worldwide.
• Revenue was RMB1,217,540 thousand in 2025, and net profit decreased slightly to RMB131.8 million in the same year.

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• Government subsidies are the only reason the company has ever shown a profit: While Chenxing reported a paper thin net profit of 0.74 million RMB in 2025, this was entirely propped up by 8.88 million RMB in government subsidies. Stripping this out, the company has consistently been in the red, including a -28.80 million RMB net loss in the first half of 2026.
• Cross-product diversification into SCARA is currently a value-destroying venture: To expand beyond their core parallel robot market, Chenxing entered the SCARA market, where they are bleeding cash. High-speed SCARA gross margins were -125.1% in 2024, -18.3% in 2025, and remained highly negative at -23.1% in the first half of 2026 due to aggressive price discounting against entrenched giants like Inovance and Epson.
• The June 2026 name change back to “Chenxing” was a mandatory legal maneuver to clear copyright liabilities ahead of the HK IPO: Reverting from “Atomrobot” back to “Chenxing Technology” was not an arbitrary rebranding, but a necessary step to mitigate overseas IP litigation risk associated with Japanese cartoonist Osamu Tezuka’s “Astro Boy” (translated as “铁臂阿童木” in Chinese) as they pivot to international markets and list under Chapter 18C.

• Direct Drive Tech Limited is a robotics technology company specializing in direct drive technology, selling robotic actuator modules and robots in China. It seeks a Main Board HKEX listing under.
• Direct Drive Tech ranked 1st in PRC consumer robotic direct drive actuator modules by revenue in 2025 with 61.1% market share. Revenue increased from RMB17.5 million in 2023 to RMB281.7.
• The company incurred operating loss since inception, with net loss of (880,977) RMB’000 in 2025 and net liabilities of (1,347,370) RMB’000 as of June 30, 2026.

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• The commercial viability of in vivo CAR-T platforms like Immunofoco’s iMAGIC hinges on the biological trade-offs of using a viral vector. While the mutated MxV glycoprotein (MxV-G-mut) and T-cell targeting module (TCM3) successfully bypass the traditional VSV-G patent thicket and show high specificity in preclinical models (IMV101 and IMV102), the permanent genomic integration of a lentiviral vector carries long-term insertional mutagenesis risks that may limit its use in autoimmune indications compared to transient LNP-mRNA systems like Capstan’s CPTX2309.
• The regulatory feasibility of solid-tumor CAR-T has been proven, but clinical benchmarks remain weak. CARsgen’s NMPA approval of satricabtagene autoleucel (CT041) on June 22, 2026, for third-line gastric cancer established a precedent, but its modest efficacy (median PFS of 3.25 months vs 1.77 months for physician’s choice) leaves a massive commercial gap. Immunofoco is trying to exploit this with its VHH-nanobody-based IMC002, currently in a Phase III trial (NCT07103668), aiming for better safety and durability, but patient recruitment in China’s crowded clinical environment remains a major bottleneck.
• Immunofoco’s financial position is critical, making its recent Hong Kong IPO filing a survival-driven defense. Having raised a cumulative RMB 973 million through its Series C in February 2026 (which valued the company at a post-money RMB 2.075 billion), the company’s updated HKEX filing on August 18, 2026, is essential to fund the expensive Phase III of IMC002 and push IMV101 through clinical trials. Without a successful IPO or a major cross-border out-licensing deal within the next nine to twelve months, the company’s cash runway will be fully depleted.

• Higher memory costs remain the primary storyline in the world of consumer electronics.
• Higher memory costs and supply disruptions have led to price increases from many consumer electronics OEMs. Higher prices for new handsets have negatively impacted demand for new devices but have increased demand in the secondary market, where ATRenew operates.
• ATRenew continues to explore new business lines and service models to increase brand awareness and increase the percentage of customer spending it can capture.

• CXMT listed on the SSE STAR Market on 27 Jul 2026. This note works through the entry rules and timing for Stock Connect, STAR50 and CSI 300.
• We estimate Northbound Connect access in Nov 2026 and a possible STAR50 ADD in Dec 2026. Then CSI 300 ADD in December 2027.
• It is already in MS-China All Shares. Then a possible MS-China ADD would follow at the February 2027 review, effective 1 Mar 2027.

• Growth. 1H26 revenue growth slowed sharply vs what is implied from consensus, confirming the reset we expected heading into results.
• Geography. Overseas revenue growth turned negative for the first time in the current growth cycle.
• IP sustainability. The flagship IP “The Monsters” declined YoY, partially offset by Twinkle Twinkle.

• After falling 12% post-1H26 results, China Unicom (762 HK) is inexpensive to its parent China United Network A (600050 CH) – its hybrid domestic A-share twin – and to peers
• Preceding my comments on Unicom, are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• Public Financial (626 HK) is suspended pursuant to Hong Kong Code on Takeovers and Mergers. Expect a Scheme Offer from Public Bank (PBK MK), holding 73.23%.
• Public Bank could offer, say $2.50/share, a 60% premium, which still backs out a low trailing P/B of 0.35x. It may well go higher to factor in the headcount test.
• Public Financial is super-illiquid. Look away now if this is not your thing.

• Public Financial (626 HK) has entered a trading halt “pending the issuance of an announcement pursuant to the Code on Takeovers and Mergers which contains inside information of the Company.” 
• It is likely that the controlling shareholder (Public Bank (PBK MK)), representing 73.23% of the outstanding shares, is seeking to launch a privatisation through a Bermuda scheme. 
• While no disinterested shareholder holds a blocking stake, the headcount test necessitates a reasonable offer. I estimate a potential offer range of HK$2.20-2.80 (41.9%-80.6% premium to last close).

• SMIC last week reported second quarter revenues of just over $3 billion, up 19.7% QoQ, up 36% YoY and handily beating the forecasted 15% growth at the midpoint.
• Gross margin was 25.3%, up 5.2 percentage points QoQ and up 4.9 points YoY. The significant improvement here was also attributed to both ASP increases a more favourable product mix.
• SMIC’s AI companion chip demand is enormous, we pulled forward shipments and increased this significantly. In this report we said the increase, on a comparable basis, should be around 40%.

• CATL’s Rmb 15.5 billion AI energy infrastructure program is not a portfolio diversification play; it is a defensive, vertical land grab structured through minority equity positions to lock in its proprietary energy storage standards and high-voltage direct current (HVDC) architectures in data centers before competitors can react.
• The Licensing, Royalty, and Service (LRS) model in North America faces severe structural bottlenecks following recent US policy shifts under Section 45X. Regulatory rules targeting Foreign Entities of Concern (FEOC) increasingly interpret Chinese intellectual property and engineering control as disqualifying triggers for tax credits, creating major execution risks for future JVs.
• CATL’s upstream lithium integration, spearheaded by the Jianxiawo lepidolite mine, acts as a strategic price cap rather than a direct profit engine. With internal cash production costs of Rmb 80,000 to Rmb 100,000 per ton of LCE, the mine’s recent restart serves to depress merchant lithium carbonate prices (currently at Rmb 140,000 to Rmb 150,000 per ton), but will become uneconomical if spot prices drop toward the Rmb 80,000 floor.

• This is our first report on VEON Ltd., a company that is becoming increasingly difficult to analyze as a conventional emerging-market telecommunications company, yet we believe that is still largely how investors are framing the business.
• Connectivity remains the foundation of the Group, providing the spectrum, network infrastructure, distribution, billing relationships and consumer trust required to serve more than 150 million telecommunications customers across Pakistan, Ukraine, Kazakhstan, Bangladesh and Uzbekistan.
• What has changed is what VEON is building on top of that foundation.

• EPS miss (non-GAAP US$1.26 vs US$1.50) is discrete: AI Labs RMB13.9bn EBITA loss, peaked QoQ per management; EC DSA fine; RMB4.5bn goodwill impairment.
• AI Cloud +45% YoY; segment EBITA +133%; AI revenue reaches 35% of external cloud — twelfth consecutive quarter of triple-digit growth.
• Maintain BULLISH, with unchanged FV US$170/ADS & HK$166 — SOTP-derived: commerce 8x FY27F EBITA, cloud 4x FY27F EV/Sales, 10% geopolitical discount. 

• This is our first report on VEON Ltd., a company that is becoming increasingly difficult to analyze as a conventional emerging-market telecommunications company, yet we believe that is still largely how investors are framing the business.
• Connectivity remains the foundation of the Group, providing the spectrum, network infrastructure, distribution, billing relationships and consumer trust required to serve more than 150 million telecommunications customers across Pakistan, Ukraine, Kazakhstan, Bangladesh and Uzbekistan.
• What has changed is what VEON is building on top of that foundation.

• An addition to the existing index themes will see 14 stocks added to the KraneShares CSI China Internet ETF (KWEB US) next week.
• The trade is over US$2bn round-trip and there is a big funding impact for some of the existing index constituents.
• Following the methodology change, more money could flow into the KraneShares CSI China Internet ETF (KWEB US) as the free float market cap increases significantly.

• Consensus. The Street reset its numbers after the March results and the May update, then stopped while July channel data weakened. We think a second reset is ahead.
• Positioning. July’s bounce is accompied by short covering. Southbound has been a seller since June and the company’s buyback has been idle since April.
• Guidance risk. Management has lowered the bar twice this year. We expect the results call to lower the growth tone again.

• CATL has committed ~Rmb15.5bn across Zhongheng, VNET and DeepSeek in five months — roughly 0.9% of its market cap. None of the three consolidates. Near-term earnings impact is nil.
• The market has declined to pay: shares are down 1.3% over the three sessions since the 14 August definitive signing, and sit 17% below the 52-week high.
• We remain BULLISH with unchanged FV of Rmb500/share. The AI programme cost Rmb3.37/share; one turn of multiple is Rmb21/share. Own CATL for the batteries, consider this option attached for free.

• Alibaba Group Holding Limited is advancing another major portfolio simplification as its Lingxi Games business moves toward new ownership under Asian private-equity firm Trustar Capital.
• The latest development goes beyond preliminary acquisition interest: Alibaba has reached an agreement to sell Lingxi Games, with reports indicating a valuation of more than $1.5 billion, although the final consideration has not been publicly disclosed.
• Lingxi Chief Executive Zhou Bingshu described the transaction as part of Alibaba’s broader effort to sharpen its strategic focus, while the company continues directing more capital toward artificial intelligence, cloud infrastructure, e-commerce and consumption.

• The core competitiveness of Mech-Mind lies in its “perception – cognition – decision-making – execution” full-stack technology. The prominent feature of the Company’s products is its versatility. 
• The industrial scenarios that Mech-Mind is proficient in are fundamentally different from the broader consumer-level scenarios at present.The data trained for industrial scenarios cannot be fully applicable in all cases.
• Considering that Mech-Mind is not yet profitable and has a small revenue scale but a fast growth rate, comfortable P/S range could be 12-18x if based on 2026 revenue forecast.

• SITC International (1308 HK)‘s 1H26 net profit grew 7.4% despite a challenging environment. Its interim dividend payout ratio increased by 5.2pp as net cash surged. 
• The outlook remains decent as fuel, charter and port handling charges elevate freight rates. So far in 2H26, China-SE Asia and China-Korea freight rates are higher YoY. 
• The market is underestimating the 2H26 earnings, implying upgrade potential. Its 12.3x PER and 5.4x P/B are undemanding given high ROE and net cash on hand.

• Hunan Yuneng New Energy Battery Material Co., Ltd. is a globally leading new energy materials company focused on R&D, manufacturing, and sales of phosphate-based cathode materials, primarily LFP cathode materials.
• The company ranked #1 globally in phosphate-based cathode materials shipment volume for six consecutive years (2020-2025), holding a 28.2% global market share in 2025.
• Revenue was RMB41,357,671 in 2023, with total assets of RMB49,271,086 and total equity of RMB19,103,243 as of March 31, 2026.

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• Qingtao KUNSHAN ENERGY DEVELOPMENT (QEDG) plans to raise around US$900m in its upcoming Hong Kong IPO.
• QEDG manufactures solid-liquid hybrid and all solid-state batteries for electric vehicle (EV) and energy storage system (ESS) applications.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• Sichuan Kelun-Biotech Biopharmaceutical (6990 HK) 1H26 revenue increased 3% YoY to RMB 978.3M, as pharmaceutical products grew to RMB 657M (vs RMB 309.8M in 1H25).
• Sac-TMT’s NDA was accepted by NMPA for 1L treatment of patients with recurrent or metastatic triple-negative breast cancer (TNBC) who have a PD-L1 combined positive score (CPS).
• Given the prospective drug pipeline, company’s R&D capabilities and extensive licensing agreements already in place we prefer to remain bullish on the name.

• Rapid Scale and Market Leadership: Founded in 2021 by a seasoned engineering team from Delta Electronics, Hangzhou BOCO Electronics has scaled rapidly to become the No. 2 provider of high-performance computing server power supplies in Mainland China (15.8% market share in 2025) and No. 5 globally (6.9% market share), achieving a 3-year revenue CAGR exceeding 100% (from RMB 261.2m in 2023 to RMB 1,044.6m in 2025).
• Emerging Dual-Engine Architecture: The company is transitioning from a specialized digital computing power supply pure-play (68.8% of 2025 revenue) into high-density AI data center power supplies (surging 754.4% YoY in Q1 2026) and Energy Storage System (ESS) power conversion systems (30.5% of 2025 revenue), supported by a RMB 1.0bn smart manufacturing base in Hengyang, Hunan.
• Near-Term Earnings & Working Capital Pressure: Despite top-line momentum (+35.2% YoY to RMB 215.0m in Q1 2026), BOCO swung into an operating net loss of RMB -5.32m due to a 70.2% YoY surge in R&D expenses, elevated FX hedging losses (RMB 8.15m), acute customer concentration (top-5 clients generating 93.5% of revenue), and stretched debtor days (83.8 days) leading to an operating cash outflow of RMB -79.77m.

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• We screen the STAR Market eligible universe ahead of the STAR50 Sep 2026 review.
• Four stocks stand out as high-conviction ADDs this cycle, all with clear rank cushions.
• We expect 3 high-conviction DELETEs and 2 mid-conviction DELETEs due to their proximity to the edge of DELETE zone.

• Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 4 September.
• We highlight 7 stocks that have a higher probability of being added to the index. With the index committee entitled to a lot of discretion, there will be differences.
• The Healthcare industry continues to remain the most underweight and there could be more additions from the industry as we near the 100-stock target.

• We screen the HS TECH eligible universe ahead of the September 2026 quarterly review.
• One stock ranks inside the ADD Zone this cycle, paired with one Buffer Zone DELETE.
• Both calls are mid-conviction, as the DELETE candidate is inside the Buffer Zone and close to the DELETE Zone.

• The “Hard-Sell” Engine is Structural, Not Incidental: Perfect Medical’s high margins are structurally dependent on aggressive staff incentives and upsell-heavy consultations. Attempting to pivot to a purely transparent, soft-sell model would cause immediate top-line collapse because first-time client organic retention is extremely low.
• Cross-Border Leakage Shifting Competitive Moats: The post-pandemic outflow of Hong Kong discretionary spend to Shenzhen and South Korea has permanently damaged local mid-tier aesthetic volumes. Perfect Medical is defending its domestic market by aggressively cutting costs and introducing lower-margin, high-turnover “Korean-style” treatments, shifting their premium physician-led brand toward a mass-market value play.
• Strict Private Healthcare Licensing Raising Operational Friction: The rollout of the Private Healthcare Facilities Ordinance (PHFO) licensing regime starting October 13, 2025, forces operators to appoint formal Chief Medical Executives. While Perfect Medical’s doctor-founded legacy provides a compliance buffer, it severely escalates administrative overhead and limits the execution speed of clinic redeployments.

• H-Share bookbuilding is live; pricing 21 Aug, first trade 25 Aug. A-shares surged 34.3% on Day 1 of bookbuilding to CNY155.39 — equivalent to HK$167.82 against the H-offer cap HK$102.80.
• The H-offer cap of HK$102.80 acquires the same economic interest as the A-share at CNY155.39 — a 38.7% structural discount the market closes over 12–24 months as float builds.
• Initiate BULLISH. Fair value HK$112 — A/H compression to the 50% historical median. Fundamental floor HK$90 at 42x FY26E NP of RMB1,016m. Half GigaDevice’s implied forward multiple.

• Amid the impact of oil prices, the car maker recorded a growth rate of 15% YoY in 2Q26.
• Export growth has exceeded 100% YoY over past half year and surged to 200% YoY in July.
• We estimate that the stock price will double at the end of 2027.

• The “Scissor Gap” is Narrowing: Shenzhen Longsys Electronics’ (SLE) spectacular H1 2026 earnings surge—with net profit reaching 10.58 billion yuan up from just 14.76 million yuan in H1 2025—is an “inventory dividend” driven by low-cost wafer stockpiles meeting peak contract prices. This peak is transient; with NAND/DRAM price growth slowing down to 10–15% in Q3 2026, SLE faces a severe margin compression risk in 2027 as cheap inventory is fully depleted.
• Structural Working Capital Squeeze Defeats Cash Flows: Despite massive paper profits, SLE’s operating cash flow plunged to -2.87 billion yuan in Q1 2026 due to a massive 439% increase in wafer prepayments. Top-tier foundries are holding all the leverage, demanding upfront cash to allocate scarce capacity, meaning the proposed $500 million H-share listing is a critical working capital lifeline rather than a pure global expansion play.
• Moat Constraints and Stalled Alliances: SLE’s shift from a commodity price-taker to a high-margin enterprise player remains unproven. While packaging capabilities have improved via PTI Suzhou, its controller technology (e.g., the WM7400) remains low-to-mid tier compared to Phison. Furthermore, the strategic embedded-storage joint venture with Kingston has effectively stalled, leaving SLE struggling to gain high-volume traction in stickier Tier-1 enterprise accounts.

• Guangdong Electric Power Development holds a strategic position as a key power producer in Guangdong, China’s most economically significant province, which is experiencing record-breaking electricity demand.
• The company is in a transitional phase, with a historical reliance on coal-fired power generation, but is actively investing in and expanding its portfolio of clean energy projects, including natural gas, wind, and solar power.
• Financial performance is characterized by high volatility, with strong recent growth in operating cash flow and net income, but this is contrasted by a history of declining long-term profitability, negative free cash flow due to heavy investment, and a sharply reduced dividend payout.

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• POCO is one of the few domestic enterprises that possess the entire production capacity of alloy soft magnetic materials. The three business lines have achieved a “micro-ecosystem” synergy effect
• Global leaders in inductors have overcome the technical shortcomings. Leveraging their strong customer relationships, patent barriers, and scale advantages, they may directly seize orders from core customers such as NVIDIA.
• As POCO is a global leader in its specific field and is in a high-growth sector, A/H discount could be relatively limited. Based on 2026 forecast, P/E could be 50-70x. 

• Sovereign Localization vs. Real AI ROI: Transwarp’s revenue is heavily polarized. State-mandated localization (Xinchuang) initiatives drive roughly 70% of current revenue, primarily through the replacement of legacy legacy products like Oracle and Cloudera. In contrast, commercial generative AI and LLMOps (Sophon) deployments represent less than 20% of revenue, as enterprise buyers remain highly conservative, prioritizing low-cost proof-of-concept (POC) projects over large-scale production deployments.
• Structural Competitive Disadvantage in OLTP: Transwarp lacks pricing power in the traditional transactional database (OLTP) market, where its KunDB has a win-loss ratio of under 20% against dominant rivals like Alibaba’s OceanBase and Huawei’s GaussDB. To secure bundle deals, Transwarp frequently discounts its database products by up to 50% to 60%. Conversely, its pricing power is preserved in multi-model data platforms (TDH) and analytical environments (ArgoDB), where it achieves gross margins exceeding 50%.
• The Capital Runway and the H-Share Pivot: The planned HKEx H-share listing to issue up to 24,583,500 shares (targeting approximately USD 100 million) is a vital liquidity bridge. With cash reserves dwindling to RMB 252 million as of January 2026 and historical operating cash flow consistently negative (-RMB 109.65 million in 2025), the raise is driven by strict A-share refinancing restrictions onshore. Management’s path to positive operating cash flow by late 2026 or 2027 depends on converting high-cost R&D (which accumulated over RMB 654 million between 2023 and 2025) into standardized, repeatable software assets rather than highly customized, low-margin project deliveries.

• CXMT Corporation (688825 CH) listed on 27 July after selling 10% of the company and is now the largest listed company in China (by far!) by full market cap.
• There will be a few mainland index inclusions this year and passives will need to buy over 11% of the free float.
• CXMT Corporation (688825 CH) should be added to Northbound Stock Connect in November and global index inclusions will follow starting next February. That will further reduce real float.

• Ingenic Semiconductor, a fabless memory and computing IC designer, launched its IPO to raise USD 410m through an A+H listing. GTJA is the sole sponsor.
• In this note, we look at the deal terms and provide our thoughts on valuation for the company.
• We analyze reference A+H transactions, cornerstone and sponsor performance and assess the risk-reward of the deal.

• We expect MiniMax’s H1 2026 revenue to be at least 5x its H1 2025 level.
• Technical rankings, such as intelligence and speed, dropped in August.
• The stock has been capped by 60-day moving average, but Price/Sales suggests a buying opportunity.

• Ingenic Semiconductor (INGC HK) is looking to raise up to US$410m in its upcoming Hong Kong IPO.
• Ingenic is a leading global integrated circuit (IC) provider with a comprehensive product portfolio spanning memory, computing, and analog ICs.
• In this note, we examine the IPO dynamics, and look at the firm’s valuation.

• Mech-Mind, a supplier of AI and 3D vision-guided robot components, has passed the HKEX listing hearing and is seeking a Main Board listing. CSI and CITIC are the joint sponsors.
• We look at the company’s core segments: intelligent robotic guidance and intelligent inspection and measurement.
• We then look at the company’s financial profile, loss-making status, pre-IPO valuation and investor backing.

• Company consistently generates high double-digit ROE despite having more than 30% of equity in cash
• Promoter shareholding is high, indicating alignment of interest with minority shareholders
• Recent weakness in the stock price makes the valuation attractive for a business that makes decent free cash fdlow. And a high dividend yield

• Ingenic Semiconductor launched Hongkong IPO to raise nearly HK$3.2B. They are an Integrated Circuit (IC) provider with a product portfolio spanning across memory, computing, and analog ICs.
• Ingenic intends to use the proceeds for innovation, product development, strategic investment, sales promotion and working capital.
• Investors can expect a sustained growth momentum, but the incremental growth possibilities does not fully justify the relatively higher pricing of the issue.

• Transwarp Technology (688031 CH) , an AI infrastructure software provider, aims to raise around US$100m in its H-share listing.
• Transwarp Technology Co (TTC) is an AI infrastructure software provider in China. TTC enables enterprises to build AI infrastructure software that drives intelligent transformation and business model innovation across industries. 
• In this note, we talk about the company’s past performances.

• Inovio Pharmaceuticals, Inc. (NASDAQ: INO) has suddenly become the kind of biotech stock that momentum traders love.
• The share price closed at $1.09 on August 14, 2026, according to the S&P Capital IQ data supplied for this report.
• That sits far below its 52-week high of $2.98, but well above the $0.56 low.

• Inovio Pharmaceuticals, Inc. (NASDAQ: INO) has suddenly become the kind of biotech stock that momentum traders love.
• The share price closed at $1.09 on August 14, 2026, according to the S&P Capital IQ data supplied for this report.
• That sits far below its 52-week high of $2.98, but well above the $0.56 low.

• On 10 August, Hang Seng Index launched a market consultation on potential changes to the Hang Seng TECH Index (HSTECH INDEX) methodology.
• If the proposals are approved, there will be 20 stocks added to the index in December creating a lot of flow and impact for the index constituents.
• One way turnover is estimated at 13.4% leading to a round-trip trade of HK$73.3bn (US$9.3bn), so this could be implemented in a phased manner.

• SHENZHEN WOKE TECHNOLOGY Co., LTD is a Southeast Asia-focused cross-border brand owner of 3C accessories, small appliances, and home furnishings, seeking listing to strengthen its supply chain.
• The company is No. 1 in Indonesia’s 3C accessories sector with 2.2% market share (2025), achieving RMB1,216.9 million revenue in 2025.
• Revenue was RMB1,216,944 (2025), with net assets of RMB10,396 (June 30, 2026), and net foreign exchange losses of RMB17.9 million (six months ended June 30, 2026).

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• For the last three years, SHEIN has consistently mis-handled political challenges in US, UK
• Failure to anticipate and plan for these challenges hurt sales growth and SHEIN’s valuation
• SHEIN’s stuggles speak directly to management’s ability to identify risks and quickly adapt

• Domestic Moat and Pricing Power Rebound: DiDi Global has secured a domestic market share of over 70%, proving that its direct-to-consumer traffic moat is highly resilient against aggregators like Amap. In Q2 2026, its China Mobility segment achieved an implied platform take-rate of 24.3%, driven by the structural wind-down of user subsidies to approximately 1% of GTV and driver-side incentive reductions.
• Latin American Expansion as a Strategic Hedge: While DiDi’s aggressive international push—such as the relaunch of 99Food and introduction of 99 Compras—continues to drag on group-level profitability with a wider H1 2026 net loss, this expansion serves as a critical strategic hedge. It forces Uber to defend its highly profitable Latin American strongholds, preventing it from redeploying capital back into Asian markets.
• Regulatory Clearance and Capital Return Stability: The final court approval of the $740 million US shareholder litigation settlement on June 16, 2026, removes a massive financial overhang. Backed by a robust cash reserve of $6.7 billion, the platform is fully funded to execute its $2 billion share buyback program and finance the commercialization of its “R2” Robotaxi model without diluting core operations.

• China segment firm in Q2, but its strength was overwhelmed by weakness in International
• International segment continued to bleed cash in Q2, mostly offsetting China gains
• As uneven performence continues, Didi may start to feel pressure to relist shares

• Mainland CRE De-risking and the HKCRE Impairment Hangover: Dah Sing has aggressively written down its Mainland China commercial real estate (CRE) book, but asset quality pressure has migrated to the Hong Kong commercial real estate (HKCRE) book. Following the June 2025 Moody’s rating downgrade to A3 (sparked by HKCRE impaired loans jumping to 8.98% in 2024), the bank reduced its outstanding HKCRE exposure by nearly 9% to HK$23.48 billion by end-2025. While write-offs have accelerated, significant “extend-and-pretend” rollover practices persist among bilateral club loans where collateral valuations remain stale due to illiquid transaction markets.
• NIM Defense via Aggressive Deposit Re-pricing: With 1-month HIBOR softening to approximately 2.5% in mid-2026, Dah Sing’s stellar FY2025 NIM of 2.41% faces compression. To defend margins, management is using tiered CASA pricing structures (e.g., “YOU i-Account”) and linking deposits to transactional business banking (“328 Business Banking Rewards”) to push expensive time deposits back into low-cost CASA, alongside interest rate swaps to lock in asset yields.
• The Capital Management Paradox: Despite boasting a fortress Common Equity Tier 1 (CET1) ratio of 18.8% at the end of FY2025, a share buyback program remains a structural non-starter. Because the parent company, Dah Sing Financial Holdings, holds a 74% stake, any buyback would severely compromise the stock’s already thin minority float. Special dividends are highly unlikely until macroeconomic uncertainties in Greater China resolve and the bank’s book value under its HK$3.16 billion Bank of Chongqing investment is fully validated.

• 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, there were a number of deals launched in India
• On the placement front, there were a few placement in India along with Dmg Mori Co Ltd (6141 JP) in Japan.

• SHEIN is facing various unfavorable challenges. The core factors that previously supported its high growth and valuation are collapsing, so its future prospects and valuation is no longer optimistic
• If the IPO valuation falls below US$25bn, it can be regarded as an opportunity with a certain margin of safety to participate; US$25-30bn falls within a neutral but cautious range
• A valuation above US$30bn implies greater risks than opportunities, considering the significant potential selling pressure from existing shareholders after lock-up period ends, and a P/E higher than Inditex is unreasonable.

• CASH Financial Services Group (CFSG) is a long-established Hong Kong financial institution with a comprehensive service offering, but it faces significant profitability challenges, having recorded net losses for the past three consecutive years.
• The company has demonstrated top-line growth, with a 3-year revenue CAGR of 10.09%, driven by its brokerage and wealth management services. However, this has not translated into bottom-line success, as indicated by persistent negative net margins and operating cash flows.
• Operating in the highly competitive Hong Kong financial services market, the company’s valuation appears moderate to expensive compared to peers, especially given its lack of profitability and high uncertainty regarding its future earnings potential.

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• Zhaoke Ophthalmology is at a pivotal transition from a pure R&D entity to a commercial-stage company, with three core assets for myopia, dry eye, and wAMD now under NDA review in China.
• The company is strategically positioned to capitalize on the rapidly growing Chinese ophthalmology market, which is driven by an aging population and increasing prevalence of eye conditions.
• Significant financial headwinds persist, characterized by substantial net losses and cash burn from heavy R&D investment, making future profitability contingent on successful and timely drug approvals and commercialization.

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• A weekly summary of key developments in ECM and Event-Driven names that I track in Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India, and Chinese ADRs.
• ECM developments: SHEIN Global Holdings (SHEIN HK) and GCash (Mynt) (GCASH PM) IPOs.
• Event-Driven developments: Kakaku.com Inc (2371 JP), Austal Ltd (ASB AU), Betmakers Technology Group (BET AU), Cleanaway Waste Management (CWY AU), Cygnus Metals (CY5 AU), FleetPartners Group (FPR AU). 

• Hunan Junxin Environmental Protection Co., Ltd. provides specialized solutions in integrated waste treatment and resource utilization, operating green energy and environmental services projects. Its Changsha Environmental Protection Industrial Park is.
• Its Changsha Environmental Protection Industrial Park is among China’s largest, and it ranked first in 2025 for on-grid electricity generated per ton of waste.
• In FY2025, revenue was 2,730,708 and profit for the year was 994,018. Gross profit margin decreased from 51.2% (2023) to 41.5% (2024).

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• H1 2026 Paper Profitability is Unreconstructedly Transitory: While Suzhou Zelgen Biopharmaceuticals reported its first-ever half-year net profit of RMB 640 million on RMB 1.205 billion in revenue, RMB 655 million (representing 54.4% of the total) was derived from AbbVie’s one-off upfront licensing payment for ZG006. The core organic business remains structurally unprofitable and heavily weighed down by a 57.42% sales expense rate.
• Commercial Tailwinds Diverge sharply by Asset: Donafenib (Zepsun) has captured a stable 26.8% of the Chinese first-line hepatocellular carcinoma small-molecule market, but its premium price of RMB 3,000/box after National Reimbursement Drug List (NRDL) cuts struggles against ultra-cheap Volume-Based Procurement (VBP) generics of Lenvatinib. Meanwhile, the success of Jaktinib (Zepuping) hinges entirely on expanding beyond its niche bone marrow fibrosis indication into broader autoimmune markets like severe alopecia areata.
• Capital Offloading via Global Out-Licensing is the Survivable Path: With 29 active clinical trials across 10 drug candidates, Zelgen’s cumulative R&D spend of RMB 1.314 billion from 2023 to 2025 created severe capital constraints. The strategic decision to out-license ex-China rights for ZG006 to AbbVie for $100 million upfront and up to $1.075 billion in milestones is a highly efficient blueprint for preserving local cash reserves to fund high-stakes domestic trials for ZG005.

• SHEIN, a global online fashion and lifestyle retailer, has passed the HKEX listing hearing. GS, MS and JPM are joint sponsors.
• In our previous notes, we looked at the company’s business and financials and compared it with listed peers.
• In this note, we forecast earnings and provide our thoughts on valuation.

• Lenovo (HKSE: 992) reported first-quarter fiscal 2026/27 results with revenues reaching an all-time quarterly high of US$26.9 billion, up 43% YoY, and up 25% QoQ
• Adjusted net income, jumped 176% YoY to US$1.075 billion, crossing the US$1 billion milestone for the first time ever.
• Earlier, the company communicated that they want to achieve $100 billion yearly revenue in two years. With the strong momentum in Q1, they are now ahead of that schedule.

• Organic Growth vs. Inflation: True organic volume expansion is concentrated in the European and Australian markets, while North America and Greater China have historically experienced volume contraction. Revenue growth is highly exchange-rate-sensitive, particularly concerning the Euro and Australian Dollar appreciating against the Renminbi and Hong Kong Dollar.
• MicroDental Underperformance: The North American division, MicroDental, has consistently failed to meet initial synergy targets, with core operating profit dropping from HK$16.67 million in 2023 to HK$7.48 million in 2024. This prompted a hard pivot toward closing inefficient labs, relocating production offshore, and weeding out low-margin economy lines to defend group-level gross margins.
• Defending Against In-Sourcing & Chairside: Modern Dental Group is combatting the threat of in-office “chairside” milling and 3D printing by moving up the value chain into complex restorations (such as multi-unit bridges and implant abutments) that chairside systems cannot replicate. Simultaneously, the company is positioning itself as a key supplier of clinical design services, software, and materials (via partnerships like SprintRay) to capture revenue even when production moves in-house.

• Suzhou Zelgen Biopharmaceuticals is an integrated biopharmaceutical company focused on oncology, autoimmune diseases, and hemostasis/hematology, powered by a dual innovation engine.
• The company has four commercialized drugs, including Zepsun® and Zepuping, and a pipeline of 10 drug candidates across 29 clinical programs.
• Revenue was RMB1,204,390 thousand and net profit RMB640,010 thousand for the six months ended June 30, 2026.

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• Hangzhou CIEC’s IPO is driven by severe liquidity and working capital pressures, as evidenced by its massive operating cash flow deficit of -RMB 4.82 billion in 2025 and -RMB 2.27 billion in the first five months of 2026. The urgent August 11, 2026 HKEX refiling—just days after the initial February application lapsed—highlights the immediate need to unlock offshore credit lines.
• The reported gross margins of 0.6% in 2025 are highly deceptive because the company’s core business relies on basis trading (基差交易). While physical transactions are recorded at razor-thin margins, the true economic spread is captured in the derivative books, which yielded RMB 2.08 billion in 2025 but swung to a RMB 584 million loss in early 2026 due to extreme commodity price volatility.
• The company’s risk management and hedging framework is under severe strain, as highlighted by the RMB 170.5 million foreign exchange loss in 2025 and a further RMB 151.5 million loss in the first five months of 2026. High leverage (asset-liability ratio of 81.74% as of May 2026) and a massive inventory buildup of RMB 23.20 billion as of June 12, 2026, expose the company to significant market downcycles.