China

• 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.

• Domestic games +17% YoY, not the feared decline. Spring Festival deferrals released as expected; deferred revenue grew RMB23bn — the 3Q revenue set-up is intact.
• Capex RMB52.8bn (+176% YoY) was the one real miss; FCF turned -RMB13.8bn. Excluding AI infrastructure prepayments, FCF was +RMB37.6bn — the cash engine holds.
• Maintain BULLISH view with unchanged TP of HK$670 — SOTP at 20x games&marketing earnings, 4.0–4.5x fintech and cloud revenue; net cash erosion offset by marketing and cloud estimate upgrades.

• MS-China adds 33 names and deletes 32, effective 1 Sep 2026. The ADDs include 31 A-shares and 2 HK stocks, the DELETEs 25 and 7.
• Our ADD Hit rate was 15 of 16 announced (94%), with 1 false positive in 16 calls. DELETE Hit rate was 9 of 12 (75%).
• All announced 33 ADDs enter the bridge after a +20.3% average run. We won’t chase gap-ups.

• CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
• In this insight, we take a look at the potential ADDs and DELs leading the rankings for the semiannual index rebal event in December 2026.
• Currently, we see 30 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.

• CSI 1000 represents the next 1000 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges after CSI 800.
• In this insight, we take a look at the potential ADDs and DELs leading the rankings for the semiannual index rebal event in December 2026.
• We continue to see 100 ADDs/DELs for the CSI 1000 index. Roughly 78% of the reference period is now complete.

• Under the current e-commerce “price comparison” mechanism, coupled with the peak of traffic dividends, there is still uncertainty as to whether domestic coffee machine brands can maintain long-term growth.
• Compared with fast-moving consumer goods, coffee machines, as durable goods, have a low frequency of repeat purchases by consumers. This may lead to declining performance growth of Gemilai.
• Given the expected about 40% profit CAGR over the next three years, the market may offer a valuation higher than traditional home appliance stocks such as Midea (e.g. 20-25x P/E).

• Hangzhou CIEC Group is a leading state-owned commodity trading service provider in China, with significant market shares in ferrous metals, iron ore, and rubber trading. The company operates a diversified business model across more than 290 commodities and has an extensive global network.
• The company filed for a Hong Kong IPO in February 2026, seeking to raise capital for strengthening working capital and enhancing its global presence. However, the prospectus lapsed in August 2026, indicating the listing did not proceed as planned. The company remains unlisted, and as such, detailed recent financial data and a public market valuation are unavailable.
• Key strengths include its strong state-owned background, which provides access to capital and stable relationships, and its established ‘One Body, Two Wings’ strategy focusing on trading synergized with supply chain services. However, it operates in a highly competitive, low-margin industry and is exposed to significant risks from commodity price volatility and the cyclical nature of the Chinese economy.

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• Hangzhou CIEC Group is a commodity trading service provider and trader in China, distributing over 294 physical commodities. The company aims to strengthen working capital, raise business profile, and enhance.
• Hangzhou CIEC Group was the fifth largest commodity trading service provider in China by trading volume and sales revenue in 2025, with a 21.3% trading volume CAGR.
• Revenue was 270,479,007 RMB’000 in 2025, and gross profit decreased by 9.4% to RMB1,721.5 million in 2025.

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• The architectural shift to 800V High Voltage Direct Current (HVDC) sidecar power systems (PowerSidecar) for megawatt-scale AI racks represents a massive value inflection, allowing qualified suppliers to command system-level average selling prices (ASPs) of up to $210,000 per rack compared to legacy $10,000 server power shelves.
• Megmeet is the only mainland Chinese power supply provider officially qualified in NVIDIA’s MGX 800V DC Intermediate Bus Converter (IBC) and Power Distribution Board (PDB) reference designs, placing them in direct competition with global tier-1s like Delta Electronics and Lite-On.
• Historically negative operating cash flows of -577.8 million RMB (FY24) and -139.3 million RMB (FY25) highlight severe working capital constraints; the pending $750 million H-share listing is a structural necessity to fund critical “China+1” manufacturing expansions in Rayong, Thailand, and Manaus, Brazil, to bypass geopolitical tariffs and meet strict localization mandates.

• We review the proposed HS TECH rule changes and screen an early beneficiary list for the December 2026 rebalance.
• Our screening returns 20 ADD candidates, 10 based on market value and 10 based on revenue growth.
• We expect all 30 current constituents are retained. 10 MV based stocks to be mechanical and sales growth for 10 growth based stocks to be cut off at 30%.

• Game revenue returned to double digits due to the new game “Roco Kingdom: World”.
• AI accelerated the advertising revenue growth to two years high.
• But AI research and development raised general and admin expenses.

• Yum China Holdings, Inc. reported solid financial results for the second quarter of 2026, continuing a consistent trajectory of growth across key operational metrics.
• The company achieved a 13% year-over-year increase in revenue, with operating profit rising 14%, and diluted earnings per share expanding 21%, partially aided by favorable foreign exchange effects.
• Excluding these currency benefits, system sales grew by 6%, an acceleration from the 4% growth seen in the previous quarter.

• Ever Glory United Holdings Limited is a leading integrated M&E engineering service provider in Singapore, offering comprehensive electrical, air-conditioning and mechanical ventilation, fire protection, and plumbing, sanitary and gas services.
• The company ranked second among domestic M&E engineering service providers in Singapore in 2025, with a revenue CAGR of 60.0% from 2023 to 2025.
• Profit for 2025 was S$20,122 thousand, and net current assets were S$53,729 thousand as at 30 June 2026.

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• Extreme Working Capital Squeeze: RelyEZ’s trade receivables turnover days skyrocketed to 326 days in the first four months of 2026, driven by delayed SOE milestones and overseas open-account terms. With cash reserves dwindling to RMB 176 million against a massive RMB 450 million operating cash outflow in early 2026, the August 9, 2026 HKEX IPO refiling is a critical liquidity lifeline rather than a simple expansion play.
• Standalone ESS Niche vs. Extreme Concentration: While RelyEZ captured a highly respectable 4th place in China’s standalone energy storage market with a 12.5% market share (3.4 GWh of newly installed capacity in 2025), this growth is precariously concentrated. Customer concentration reached 94.3% from its top five customers in early 2026, leaving the business highly exposed to the procurement whims and capital cycles of a few state-owned power developers.
• Structural Transition to Software and Overseas Markets: To escape the brutal domestic hardware price war, where ASPs crashed to RMB 0.68/Wh in early 2026, RelyEZ is shifting toward high-margin software platforms like EnergyMarket+ (boasting over 80% margins) and rapid overseas expansion. Overseas revenue surged to RMB 125.0 million (representing 44.64% of total revenue) in the first four months of 2026, highlighting international markets as the primary engine for margin preservation.

• Hubei Dinglong has established a dominant domestic position in CMP pads, capturing a 38.5% market share in China in 2025, but its growth engine is highly concentrated on this single product line. Efforts to replicate this success in CMP slurries and advanced photoresists are struggling with low utilization rates, prolonged qualification cycles, and fierce competition from established players.
• The company’s capital allocation has become increasingly aggressive and fragmented, highlighted by the 630 million yuan acquisition of Haofei New Materials in January 2026—a pivot into highly competitive, overcapacity-plagued lithium battery auxiliary materials—and a rising leverage profile with a debt-to-asset ratio reaching 41.11% by late 2025.
• The proposed dual primary H-share listing in Hong Kong to raise at least US$750 million is a strategic necessity driven by domestic regulatory constraints on A-share secondary financing, rather than a sign of operational strength. This capital push is further complicated by historical management red flags, including cumulative insider cash-outs of approximately 1.1 billion yuan by executives and controlling shareholders.

• Shenzhen Megmeet Electrical (002851 CH) (SME), an industrial technology group, aims to raise around US$750m in its H-share listing.
• SME has a broad product portfolio with six major business segments comprising power supplies, new energy transportation, industrial automation, smart home appliances, intelligent equipment, and precision connectivity and magnetic components.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• If the first stage of competition was about determining “whether it can grow large”, then investors‘re more concerned about whether Deye can maintain profit structure in front of globalization/cyclical fluctuations.
• Against the backdrop of a more rational global new energy capital cycle,Deye needs to prove its competitiveness doesn’t only come from short-term dividends, but also from long-term replicable system capabilities.
• As inverters evolve from hardware to the entry point of energy systems, the real competition has just begun. Based on 2026 forecast, comfortable valuation range could be P/E of 15-20x.

• Ingenic Semiconductor (INGC HK) , aims to raise up to US$500m in its H-share listing.
• Ingenic is a leading global integrated circuit (IC) provider with a comprehensive product portfolio spanning memory, computing, and analog ICs.
• In this note, we look at the firm’s PHIP updates and valuation.

• The changes to a global index in August will be announced pre-market open Thursday and will be implemented at the close of trading on 31 August.
• The big market moves since the last rebalance result in many changes with the final number dependent on the day picked to compute market cap and free float market cap.
• The forecast adds have outperformed the forecast deletes over the last 1, 2 and 3 months but near-term performance has been far from awesome due to the momentum unwind.

• Ingenic Semiconductor, a fabless memory and computing IC designer, is seeking an A+H listing. GTJA is the sole sponsor.
• We look at the company’s core segments: memory ICs and computing ICs.
• We discuss our preliminary thoughts on the company’s valuation based on the A-H premium.

• Tencent (700 HK) will report earnings on August 12th. This tactical view updates the Tencent’s analysis presented on July 17th with new support and targets calculated ahead of the earnings.
• The Market expectation is framed as solid core operational delivery under margin pressure. Any minimal disappointment could lead to a (continuation of the) sell-off.
• At the end of last week our model flagged the stock as overbought. Although a continuation of the rally is possible for a third week or more, it appears unlikely.

• Alibaba’s strategic consolidation in late 2025 officially dismantled the complex “1+6+N” structure, integrating domestic e-commerce (Taobao/Tmall), Ele.me, and Fliggy into a unified China E-commerce Group to eliminate internal friction and counter PDD and Douyin more effectively.
• The domestic e-commerce monetization engine has established a structural floor, driven by the rollout of the 0.6% software service fee on Taobao and the rapid penetration of the AI-powered Quanzhantui marketing tool, offsetting the drag of lower-monetization Taobao merchant traffic.
• Cloud Intelligence margins are undergoing a structural inflection as triple-digit growth in high-end AI compute and proprietary model (Qwen) hosting offsets aggressive price cuts on commodity public cloud offerings. AI-related products now account for 30% of external cloud revenue, with AI ARR exceeding RMB 35.8 billion.
• International Commerce (AIDC) is nearing structural breakeven, with Q4 FY2026 adjusted EBITA losses narrowing to RMB 138 million. This was driven by sequential unit economics improvements in AliExpress “Choice” and deep integration with Cainiao following its IPO withdrawal.

• Since the last reshuffle (July 9), our Model Portfolio has appreciated 1.46%. MSCI Asia ex Japan index (MXASJ) has dropped 1.77%. AI infrastructure stocks primarily contributed to the portfolio drawdown.
• Focus on AI “picks and shovels” providers, industrials, defense, industrial metals and banks remain. We also like Indian automobiles. We replace Hyundai Engineering and Construction with HD Hyundai Heavy Industries.
• We are overweight on HK/China, Korea and India. We are underweight Taiwan but overweight Taiwan technology. We are Neutral ASEAN.

• 2Q26 revenue +5.8% to RMB8.93bn; music services +11%, membership accelerated to +8.1%, IP/concert engine +16%. Non-IFRS net profit +4.4%. Clean quarter, decelerating social entertainment drag notwithstanding.
• Ximalaya (closed 18 May) added RMB407mn revenue but reshapes the balance sheet: RMB13.1bn new borrowings, goodwill RMB29.8bn. Meanwhile, management repurchased US$400mn of stock at US$9.2/ADS average.
• BULLISH. ACCUMULATE maintained; FV trimmed to HKD60/USD15.40 (from HKD64), pegged to 17x FY26 PE (-1SD below mean) on ~RMB10.0bn non-IFRS earnings. ~56% UPSIDE potential. 

• The market is underestimating Lonking (3339 HK)‘s earnings, with consensus forecasts pointing to an 8.5% decline in 2H26. Instead, industry wheel loader sales grew 30.8% in Jul. 
• Its net cash surged 2.8x in the last ten years, and by end-FY26, it will reach Rmb8.2bn, or 73.9% of its current market capitalisation.
• FY26-28F average ROE will reach 12.4%, the highest in the last five years, justifying its 0.9x P/B. Ex-net cash, its FY25 ROE will instead be 23.5%.

• Autel’s core business focuses on two main areas: vehicle diagnosis solution solutions and smart charging solutions. Gross margin improved simultaneously with revenue growth, demonstrating the scale effect of platform-based business.
• If the AI business proportion continues to increase, the valuation multiple is expected to rise. Embodied intelligence commercialization progress also has big potential. However, geopolitical risk may bring valuation discount.
• Autel has a weaker ability to withstand risks compared to competitors with diversified strategies. A comfortable valuation range could be P/E of 15-24x, based on 2026 net profit forecast.

• In this edition: • TKH Group | strong performance by to be divested businesses – reiterates FY26 outlook • PostNL | Monday concentration remains a structural drag • Austrian Post | expands e-commerce footprint to Slovakia via FHB Group acquisition • E-commerce & Logistics | Shein IPO: sub-USD 30bn pitch reflects structural headwinds

• RelyEZ Energy Storage Technology Co., Ltd. is a leading integrated ESS solutions provider in China, ranking 10th by shipment volume and 4th by newly installed capacity in 2025.
• Total revenue increased from RMB434.6 million in 2023 to RMB1,867.6 million in 2025, with a 6.8 GWh total production capacity.
• Revenue was RMB1,867,611 in 2025, with gross profit of RMB300,609 and profit before tax of RMB174,937.

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• After broker/investment bank Guotai Junan (1788 HK) (GJI) was suspended last month pursuant to the Takeover’s Code, an Offer from its state-backed parent Guotai Haitong (601211 CH) (GHS) was expected.
• That unfolded last Friday evening (7th July), with GHS pitching a pre-conditional (SASAC/NDRC) Scheme at HK$3/share, a 44.2% premium to last close, bang in-line with my estimate. Terms are final. 
• The pre-con long stop date is the 31st  October. That’s uncommonly quick. This could (should) be wrapped up before year-end. Plus there are some quirky Scheme vote-blocking %s.

• We screen China stocks ahead of a global index’s August 2026 quarterly review, with 16 ADD and 22 DELETE candidates.
• Nine of 16 ADD candidates are Information Technology names, and six cleared the May cutoffs without being added.
• The DELETE list splits into 12 names below the retention lines across the full cutoff range and 10 borderline names.

• Swire Pacific (19 HK)‘s 1H26 reported profit was HK$6.8bn versus HK$815mn in 1H25.
• 83%-Held Swire Properties (1972 HK) reported profit of HK$3.6bn vs. a loss of HK$1.2bn in 1H25. 45.12%-held Cathay Pacific (293 HK) reported a 71% increase in underlying profit of HK$6.2bn.
• Note: short interest in Cathay, one the best performing global airlines over the past year (in terms of share price), has picked up since the end of May. 

• Different business models have led to a divergence in the profit logic of enterprises. Compared with IDH manufacturers such as Samsung/Micron, Ingenic has demonstrated unique advantages during price increase cycle
• Capacity constraints and differences in business models will pose challenges to Ingenic’s sustained profitability.How to strike a balance between reliance on contract manufacturing and market expansion is the core issue.
• The scarcity of automotive-grade storage and Ingenic’s leading position may lead to a valuation premium. A comfortable P/E range could be 60-80x, based on 2026 net profit forecast.  

• Chinese robot maker Yushu Technology (Unitree Robotics, 688836 CH Equity) priced its initial public offering (STAR market) in a deal that would make it the first mainland-listed humanoid robot manufacturer. 
• The retail portion was 8,000x oversubscribed with 9.8 million individual investor orders, marking a landmark moment for China’s embodied-AI sector. China’s global market share in humanoid robots is >85%.
• The nearest listed competitor is UBTECH Robotics (9880 HK); however, Agibot, the world’s largest humanoid robot company by unit sales, is slated to list on the Shanghai exchange soon.

• Ingenic Semiconductor Co., Ltd. is a fabless IC provider specializing in memory, computing, and analog ICs for various devices. It holds leading market positions in niche DRAM, SRAM, NOR Flash,.
• Ranked 7th globally in Niche DRAM and NOR Flash, and 2nd in SRAM and IP-Cam SoC by 2025 revenue. 1x-nm LPDDR4 products entered mass production.
• FY2025 revenue was 4,741,008. Net margin decreased from 11.4% (2023) to 7.9% (2025). Gross margin decreased from 35.5% (2023) to 32.8% (2025).

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• Hong Kong equities paused after a strong run, with market breadth weakening despite a continued upside skew in individual stock returns.
• Single stock option activity fell sharply, with weaker Call trading accounting for much of the decline.
• HSI implied volatility remains subdued relative to its recent history, while single stock implied vols remain comparatively elevated.

• Hubei Dinglong (HDLNG HK) , aims to raise at least US$750m in its H-share listing.
• It provides upstream integrated materials and solutions for the semiconductor and other high-tech industries in response to the broad and growing demand for supply chain localization and technology roadmaps.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• Gilead’s $80 million upfront payment for MAT2A inhibitor GH31 validates Genhouse’s synthetic lethality platform but creates a critical strategic divergence: Genhouse has surrendered global commercial rights to its most promising near-term asset, leaving its domestic pipeline heavily reliant on the highly competitive and crowded RAS-MAPK pathway.
• The company’s lead asset, SHP2 inhibitor GH21, faces immense clinical headwinds as a monotherapy, exhibiting a weak objective response rate with only 1 patient achieving a confirmed partial response out of 60 assessable patients in Phase 1 data, forcing a total strategic shift toward combination trials with KRAS G12C inhibitors like D-1553.
• Genhouse’s balance sheet remains highly constrained despite recent cash inflows. While the company closed a RMB 300 million crossover round in January 2026 and filed its HKEX IPO prospectus on August 7, 2026, its reported cash balance of RMB 98.27 million as of May 31, 2026, highlights rapid cash burn and the urgent need to clear historical net current liabilities of RMB (592.34) million.

• Extreme Customer Concentration: Zhejiang Energy Marine’s recent Hong Kong IPO prospectus, filed on August 7, 2026, reveals that MSC Group represented 68% of its revenue in the first five months of 2026. This extreme concentration severely limits the company’s pricing independence and leaves its hyper-growth narrative highly vulnerable to a single commercial relationship.
• Regulatory-Driven Peak Demand Window: The current green equipment wave is tightly bound to EU ETS maritime integration (reaching 100% emissions coverage in 2026) and FuelEU Maritime compliance. However, this retrofit-heavy cycle is structurally temporary; the expert anticipates scrubber retrofit demand will peak around 2027 to 2028 before rapidly transitioning to dual-fuel newbuild orders.
• Mixed-Ownership Operational Agility: Unlike traditional rigid State-Owned Enterprises (SOEs), ZEME’s management holds a combined indirect equity stake of 45.8% through Dizuan Maritime and Hangzhou Xiling. This mixed-ownership reform aligns leadership incentives and enables exceptional operational execution—such as delivering single-vessel retrofits in 33 to 49 days versus the 60-day industry standard—while still utilizing the parent group’s state-backed credit.

• The review period for the September rebalance of the Hang Seng TECH Index ended on 30 June, the changes will be announced on 21 August and implemented on 4 September.
• 1 constituent change, float changes and capping changes will result in a one-way turnover of 3.9% resulting in a round-trip trade of HK$22.2bn (US$2.8bn).
• Short interest has increased in the forecast add and forecast delete and there could be short covering ahead of the implementation of the changes.

• I summarise the latest spreads and newsflow for the merger arb situations covered across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, the Philippines, Thailand, and Chinese ADRs.
• Highest spreads: Skyworth (751 HK), Changhong Jiahua (3991 HK), Guotai Junan International (1788 HK), OFX Group (OFX AU), Cygnus Metals (CY5 AU), European Lithium (EUR AU), Z Fin (1168 HK). 
• Lowest spreads: Accent Group (AX1 AU), Kakaku.com Inc (2371 JP), Taiyo Holdings (4626 JP), Future Corporation (4722 JP), Japan Property Management Center (3276 JP), oOh!Media Ltd (OML AU). 

• S.F. Holding is the largest integrated logistics provider in Asia, distinguishing itself with a premium, time-definite service model supported by an extensive air and ground fleet.
• The company is strategically diversifying into high-growth areas such as supply chain management, cold chain, and international logistics, partly through acquisitions like Kerry Logistics, to build a second growth curve beyond the competitive domestic express market.
• While facing intense domestic competition and macroeconomic headwinds, S.F. Holding‘s focus on high-end services, technological investment, and network optimization provides a foundation for long-term, sustainable growth and margin improvement.

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• Alibaba (9988 HK, BABA US) will report its June Quarter 2026 results on 20 August and hold its conference call at 7:30 p.m. Hong Kong time.
• Implied volatility comparisons show U.S.-listed options are already repricing for the event, while HK-listed prices have yet to reflect the expected event-related volatility.
• The new HK weekly contract expiring on 21 August, together with later weekly and monthly expiries, should drive active Hong Kong trading, with potential spillover into the next U.S. session.

• Guotai Haitong Securities (2611 HK) proposed to privatise Guotai Junan International (1788 HK) at HK$3.0, a 44.2% premium to the pre-suspension price, which looks good enough. 
• The proposed price equals 11.9x PER for FY26F, higher than the average of 10.1x since 2024. This is better than the sector’s average PER of 10.3x.
• It also equates to 1.6x 12-month forward P/B, or 1.3SD above the 5-year average, well reflecting a projected ROE recovery in the next two years.

• Leading Independent Producer in a Consolidating Market: AirPower Technologies is the largest independent industrial gas supplier in China, formed through the 2021 merger of Yingde Gases and Baosteel Gases. This scale provides a significant competitive advantage in a market dominated by a few global players, allowing it to serve blue-chip customers across key industrial corridors.
• Strategic Expansion into High-Growth Sectors and Geographies: The company is strategically targeting high-growth end-markets like electronics, healthcare, and clean energy, particularly the hydrogen sector. Furthermore, its expansion into Southeast Asia and affiliation with India-based NovaAir positions it to capitalize on broader regional industrialization.
• Resilient Business Model with Utility-Like Cash Flows: The industrial gases business is characterized by long-term contracts, high switching costs, and recurring demand from a diverse industrial base, which provides a foundation for stable, utility-like cash flow generation. The provided financials from 2018-2020 demonstrate strong growth in revenue, net income, and free cash flow.

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• We believe the revenue growth will rise significantly to 9% in 1Q27.
• In 1Q27, the disposal cases, Sun Art and Intime, would no longer impact “all others” revenue.
• We expect Alibaba has an upside of 59% for Dec. 2027 according to other e-commerce companies’ Price/Sales and EV/Sales.

• A significant valuation disconnect exists between Tongda Group and its high-performing subsidiary, Tongda Smart Tech, with the market assigning a negative value to the parent company’s own operations.
• The parent company is burdened by debt, and management is prioritizing debt reduction over shareholder returns like dividends or share buybacks, which has pressured the stock performance.
• Despite the parent company’s challenges, its core business in consumer electronics components is positioned to benefit from a potential smartphone market recovery and growth in areas like WiFi 7 routers and smart appliances.

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• PAX Global is a leading global provider of EFT-POS terminals, strategically shifting towards higher-value Android-based smart terminals, which now account for over 70% of revenue.
• The company is expanding its SaaS offerings through its MAXSTORE platform, a terminal management and app distribution ecosystem with over 17 million connected devices, aiming to enhance operational efficiency for its partners and create recurring revenue streams.
• Despite a strong market position and a strategic shift to higher-margin products, the company faces significant headwinds from geopolitical tensions, intense competition from both hardware and software-focused rivals, and supply chain cost pressures.

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• Zhejiang Energy Marine Environmental Technology Co., Ltd, founded in 2018, is a leading global green shipping equipment and systems provider. It offers five business lines and was the largest provider.
• The company was the largest global green shipping equipment and system provider by revenue in 2025. Revenue increased by 89.4% from RMB1.32 billion (5M2025) to RMB2.51 billion (5M2026).
• Revenue was RMB2,507,000 thousand (5M2026) and profit for the period was RMB622,104 thousand (5M2026). Total assets were RMB4,119,286 thousand as of May 31, 2026.

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• My base case valuation of Shein is market cap of US$26 billion, lower than the target IPO valuation range of US$30 billion to US$40 billion that the company is seeking.
• Given the lack of upside, I have a Negative View of the Shein IPO.
• I estimate Shein to generate net revenue of US$42.8 billion (up 2.3% YoY) in 2026, US$44.4 billion (up 3.7% YoY), and US$47.5 billion (up 6.9% YoY) in 2028.

• Guotai Junan International (1788 HK)/GJTAI announced a preconditional scheme offer from Guotai Haitong Securities (2611 HK) at HK$3.00, a 44.2% premium to the last close. The offer price is final. 
• HKEx privatisations, which require regulatory approvals, have recently been shunned. However, the precondition related to NDRC and Shanghai SASAC regulatory approvals is low risk. 
• While the offer is below the six-month high, it is attractive compared to peer and precedent transaction multiples. Barring a significant re-rating of peers, this should get done. 

• Sichuan Biokin Pharmaceutical Co., Ltd. is an integrated biopharmaceutical group founded in 1996, focused on developing oncology therapeutics using ADC, ARC, and TCE technologies.
• Iza-bren is the world’s first approved bispecific ADC, and the company has a global strategic license agreement with BMS, receiving US$800 million upfront.
• The company reported RMB5,821,050 thousand revenue and a 95.0% gross profit margin in 2024, alongside a RMB1,053,618 thousand net loss in 2025.

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• Tencent’s dominance is anchored by its Weixin/WeChat super-app, a vast ecosystem integrating social media, gaming, payments, and business services, creating a powerful network effect and high user stickiness.
• Future growth is increasingly reliant on the enterprise segment, particularly FinTech and Cloud/AI services, alongside the international expansion of its world-leading gaming division to offset maturing domestic markets.
• Significant risks persist from the stringent and evolving regulatory landscape in China, which impacts operations from gaming to fintech, and intense domestic competition from tech giants like Alibaba and ByteDance.

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• In this insight we analyze SHEIN’s Marketing expenses, which rose sharply in FY25 and Q126
• We also revisit SHEIN’s Fulfilment expenses, which likely ballooned in Q226 on higher fuel
• We believe high and rising Marketing, Fulfilment expenses to smother FY26 margins

• New Oriental Education & Technology Group reported its fourth quarter and full fiscal year 2026 results demonstrating revenue growth across several core and new business segments amid a challenging economic and regulatory environment.
• The company’s total net revenue increased by 23% year-over-year to $1.53 billion in Q4, driven by progress in its core education business, overseas test preparation, adult and university student programs, and new initiatives such as non-academic tutoring and intelligent learning systems.
• Non-GAAP operating income rose 34.7% to $110 million, reflecting improved operational efficiency and margin expansion despite some one-off restructuring costs.

• Dominant Pan-Asian Leader with Strong Growth: AIA is the largest independent publicly listed pan-Asian life insurance group, operating across 18 markets. The company demonstrates robust growth, with a significant increase in the Value of New Business (VONB), a key performance metric, driven by strong demand in markets like Hong Kong, Thailand, and Singapore.
• Premier Distribution and Brand Trust: A key competitive advantage is its extensive and high-quality ‘Premier Agency’ distribution network, which is a primary driver of new business. This is complemented by a century-long brand heritage that has built significant customer trust, a crucial asset for a long-term business like life insurance.
• Favorable Structural Tailwinds vs. Macroeconomic Risks: AIA is well-positioned to capitalize on the structural under-penetration of life and health insurance in Asia, driven by rising wealth, aging populations, and increasing health awareness. However, the business faces risks from economic volatility, interest rate fluctuations, and evolving regulations across its diverse markets, including recent concerns over potential Chinese taxation on overseas policies.

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• Market Leader with Premier Distribution: AIA is the largest independent, publicly listed pan-Asian life insurance group, with a dominant presence in 18 Asia-Pacific markets. Its key competitive advantage, or ‘moat’, is its high-quality ‘Premier Agency’ force, which is significantly more productive than peers and has been a consistent driver of profitable new business growth.
• Structural Growth Tailwinds: The company is strategically positioned to benefit from powerful long-term demographic and economic trends in Asia, including a rapidly growing middle class, rising wealth, aging populations, and a substantial ‘protection gap’ due to limited social welfare systems.
• Strong Financial Performance and Capital Management: AIA has a track record of delivering strong growth in key metrics like Value of New Business (VONB) and operating profit. The company maintains a robust capital position and is committed to returning capital to shareholders through consistent dividend growth and share buyback programs.

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• Ab&B Bio-Tech is a China-based vaccine developer that successfully listed on the Hong Kong Stock Exchange in August 2025, raising approximately HK$431-518 million. The company’s primary focus is on the research, development, manufacturing, and commercialization of innovative vaccines, with its core products being a quadrivalent subunit influenza vaccine, which has been commercialized, and a lyophilized human rabies vaccine candidate in late-stage clinical trials.
• The company’s stock has been suspended from trading on the Hong Kong Stock Exchange since April 1, 2026. This suspension is due to a delay in the publication of its 2025 annual results, pending the completion of an audit into certain fund investments and consultancy payments. This raises significant corporate governance and transparency concerns.
• While the company has demonstrated strong revenue growth from its newly launched influenza vaccine, it operates in a highly competitive Chinese vaccine market. It faces pressure on pricing and demand, and its commercialization strategy has been questioned by analysts. The company remains unprofitable, and its future outlook is clouded by the ongoing audit and trading suspension.

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• Alpha Professional Holdings is a highly diversified investment holding company with operations in commoditized and competitive sectors, including milk product trading, logistics, property investment, and cleaning services.
• The company exhibits extreme financial volatility, with a dramatic swing from a significant net loss in FY2025 to a substantial profit in FY2026, despite a long-term trend of declining revenue. This makes future performance difficult to predict.
• Valuation presents a mixed picture: a very low P/E ratio of 0.9x suggests undervaluation, but this is contrasted by a high P/B ratio of 3.2x relative to peers and a history of no dividend payments, reflecting high investor uncertainty.

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• JD.com‘s primary competitive advantage is its vast, self-operated logistics network, which ensures high-quality service and fast delivery, differentiating it from asset-light competitors.
• The company faces intense and escalating competition from rivals like Alibaba and PDD Holdings, leading to pressure on pricing, margins, and market share.
• Future growth is contingent on successfully navigating the complex regulatory environments in both China and internationally, while expanding into lower-tier Chinese cities and new business segments like healthcare and cloud services.

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• Unitree Robotics is a rapidly growing Chinese robotics company that has established a dominant position in the global consumer and education quadruped robot market and is making significant inroads into the burgeoning humanoid robot sector.
• The company’s core competitive advantages are its aggressive pricing strategy, driven by a high degree of vertical integration and a cost-efficient manufacturing base in China, and its rapid product iteration cycle.
• With a successful recent IPO on the Shanghai STAR Market, Unitree is well-capitalized to fund its ambitious growth plans, which include expanding production capacity, investing heavily in AI and software development, and diversifying its revenue streams towards industrial applications and recurring software/service models.

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• Industry Cycle Transition: The Chinese ophthalmic market has shifted from a volume-driven hyper-growth phase to a highly price-sensitive, macro-exposed cycle. High-margin discretionary services like refractive surgery and premium orthokeratology (OK) lenses are facing severe consumer wallet-share compression, forcing chains to rely on low-margin basic care.
• Moat Degradation in Sinking Markets: Aier’s “1+8+N” hierarchical model is experiencing longer payback periods—extending from a historical 3 to 4 years to 5 to 7 years in county-level “N” clinics. Competitors like Huaxia Eye (leveraging flagships) and Chaoju Eye (regional density) are actively limiting Aier’s market share expansion in key provinces.
• Capital Constraints and Tax Overhang: Aier’s off-balance-sheet M&A incubation model is under severe strain, evidenced by a 156 million yuan goodwill impairment in 2025 and a massive 524 million yuan tax penalty in May 2026. This cash drain directly threatens liquidity as Aier attempts to execute a $650 million H-share listing to fund high-beta international acquisitions.

• Housekeeping, Not Expansion: The July 27, 2026 transaction—where Foxconn (Far East) Limited agreed to acquire 239,050,141 shares of Maxnerva Technology Services for HK$152.37 million—is an internal restructuring rather than a strategic operational expansion. Foxconn is consolidating its direct stake to 40.46%, triggering a mandatory general offer (MGO) at HK$0.6374 per share.
• Vietnam Regulatory Hurdle is Real: Despite the transaction being an internal reorganization, it requires approval from the Vietnam Competition Commission (VCC). While the newly introduced Resolution No. 66.18/2026/NQ-CP doubled local asset and revenue thresholds to VND 6 trillion, the 20% combined market share threshold remains unchanged, and the VCC’s strict pre-merger requirements mean clearance could be delayed into early 2027.
• Severe Transfer Pricing & Margin Leakage: Maxnerva operates effectively as a captive IT department for Hon Hai, governed by the 2023 Framework Agreements. Despite RMB 707.6 million in FY2025 revenue, the company suffered a RMB 14.6 million net loss. Monopsonic pricing pressure from Foxconn, combined with write-downs on non-core investments, limits the company’s ability to retain the higher-margin pools of its Smart Factory and newly launched Nvidia GB300-based 100 MW AI data center projects.

• Dominant Market Leader Facing Headwinds: Trip.com is the undisputed leader in China’s online travel market, commanding over 50% market share. However, the company is navigating significant challenges, including a recent US$770M antitrust fine, softening domestic travel demand, and intense local competition.
• Pivoting to International Growth: While rooted in China, the company’s strategy is increasingly global. International bookings are a key growth driver, with gross bookings on its international platform growing significantly. The company is focusing on expansion in Asia-Pacific, Europe, and North America to diversify revenue streams away from the highly regulated and competitive domestic market.
• Regulatory Overhang and Valuation: A significant antitrust investigation culminating in a large fine has created a regulatory overhang, pressuring the stock. Despite this, the company’s valuation appears moderate compared to peers, with a relatively low P/E ratio, which may present an attractive entry point for investors with a higher risk tolerance.

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• HKE Holdings is pursuing a high-risk, dual-pronged strategy, combining its legacy specialized medical construction business with a new, high-growth venture in financial technology, specifically virtual asset trading.
• Despite strong multi-year revenue growth, the company has failed to achieve profitability, posting significant and consistent net losses and negative cash flows over the past three years.
• The company’s valuation appears stretched, trading at significant premiums to peers on Price-to-Book and EV-to-Sales metrics, which likely reflects market enthusiasm for its fintech ambitions rather than its current financial performance.

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• Azeus Systems is a niche IT services provider with a rapidly growing and highly profitable software products division, primarily driven by its flagship ‘Convene’ board portal solution.
• The company has demonstrated an exceptional growth track record, with 5-year compound annual growth rates of 19.7% for revenue and 39.8% for net income, supported by a transition towards a higher-margin, recurring revenue model.
• A strong commitment to shareholder returns is evident through a high dividend payout ratio and a remarkable 5-year dividend CAGR of 114.2%, making it an attractive proposition for income-focused investors.

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• As China’s national flag carrier, Air China is strategically positioned to capitalize on the continued recovery of domestic and international air travel, leveraging its dominant hub at Beijing Capital International Airport.
• The company has demonstrated a significant revenue rebound post-pandemic, although profitability remains volatile and subject to margin pressures from intense competition, fuel price fluctuations, and currency risks.
• High operational leverage and sensitivity to macroeconomic conditions present both significant upside potential in a favorable environment and considerable risk during economic downturns or periods of geopolitical instability.

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• 4Paradigm is a leading enterprise-level AI technology and service provider in China, with a strong focus on its platform-centric solutions. The company has demonstrated robust revenue growth and achieved its first-ever quarterly net profit in the third quarter of 2025, signaling a positive trajectory towards sustained profitability.
• The company’s core product, the Sage AI Platform, is a key growth driver, experiencing significant revenue increases. 4Paradigm is strategically expanding into generative AI with its SageGPT and AIGS (AI-Generated Software) offerings, aiming to capture a larger share of the rapidly growing AI market.
• Despite its market leadership and growth, the company faces risks associated with US sanctions, which could impact its supply chain for critical components like semiconductors. The stock has also experienced volatility and underperformance since its IPO.

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• Anhui Huaheng Biotechnology is a leading Chinese synthetic biology company specializing in the R&D, production, and sale of bio-based products, with a focus on amino acids and vitamins. The company has established a strong market position in the production of alanine and valine.
• The company is poised to benefit from the growth of the synthetic biology market, which is supported by Chinese government initiatives. However, the industry is becoming increasingly competitive, with both domestic and international players vying for market share.
• A significant corporate governance risk has emerged with the recent criminal detention of the company’s founder and former chairperson, Guo Henghua. While the company has stated this is a personal matter and has appointed a new chairman and general manager, this event could create uncertainty for investors.

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• The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
• We continue to expect five index changes for September 2026 and we currently estimate one-way flows ~US$153mn.
• The index changes will be announced after the close on Friday 21st August 2026.

• The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
• We expect one index change and we expect this to trigger total one-way flows of US$87mn including the effects of capping.
• The index review results will be announced on 21 August.

• We screen our HSCI September 2026 review candidates for southbound Connect action, with 36 Connect ADDs and 25 DELETEs.
• ADD candidates split into 31 ADD-NEW and 5 ADD-REJOIN, with one WVR name deferred and seven A+H names already in Connect.
• DELETE candidates are 23 MV cases and 2 velocity cases, after one A+H name is exempt from Connect deletion.

• On the 27th July 2026, IT integrator Maxnerva Technology Services (1037 HK) announced its two top shareholders – FSK and FDG – had entered into SPA’s with Foxconn at HK$0.6374/share.
• Assuming the SPAs complete (primarily requiring Vietnam Competition Commission approval), Foxconn’s stake increases from 6.61% (indirect) to 40.46%, triggering a conditional mandatory general offer (50% tendering condition) also at HK$0.6374/share. 
• Arguably this is a Hon Hai/Foxconn internal restructuring exercise. It’s a decent premium though; enough to (likely) clear the 50% tendering condition. Listing status maintained, hence a decent back-end proposition. 

• Southbound Stock Connect buying begins this morning; the Zhipu precedent saw US$4.9bn of inflow in eight weeks — yet a 57m-share unlock lands just four weeks later, in early Sept.
• Vendor screens still show negative equity and 343% gearing from preferred shares that converted on listing day; MiniMax actually holds US$3.45bn of cash, ~25% of its market capitalisation.
• We initiate BULLISH with a HK$340 fair value — 18x our FY2028E sales of US$700m plus HK$20.4bn net cash — sitting 1.5% above July’s institutional convertible strike.

• Unitree Robotics (688836 CH) concluded its IPO price at Rmb150.8, and we estimate this equals 78.5x PER for FY26 and 55.3x for FY27.
• The IPO valuation is cheap when compared with the peer median of 86.7x and 119.7x, respectively. Its higher P/S of 21.2x and 15.2x is due to its better profitability.
• We calculate that it can reach 146.5x PER, or a price of Rmb399.5, 164.9% upside if we apply the current AH premium to the peers’ median FY27 PER. 

• Hangzhou Yodosmart Automotive Technology Co., Ltd. is a leading domestic provider of in-vehicle intelligent connectivity solutions in China, offering customized solutions to OEM customers.
• Hangzhou Yodosmart is the fourth largest domestic provider of in-vehicle communication solutions in China with 4.9% market share in 2025.
• For the five months ended May 31, 2026, gross profit was 42,237 RMB’000 and adjusted net profit was 13,141 RMB’000.

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• My base case valuation of Unitree Robotics IPO is implied market cap of 106.9 billion RMB, which is 155% higher than the company’s target valuation of 42 billion RMB. 
• My base case valuation is based on P/E of 81.9x (30% premium to the comps) using my estimated net profit of 1.3 billion RMB for the company in 2028.
• Unitree Robotics is one of the major leaders in the humanoid and quadruped robotics industry in China. 

• The advantage of Big Catering lies in its differentiated Buffet model, but its disadvantage is “heavy asset” model, which results in significant lagging behind in cost control and expansion speed.
• The core of low net profit margin stems from the rigid pressure of cost structure.If Big Catering wants to expand southward, it will face intense competition and high education costs.
• Big Catering has very limited room for downward adjustment in its pricing strategy. Valuation would be lower than Domino’s Pizza, but higher than that of traditional restaurants with slow growth.

• Maxnerva Technology Services is strategically positioned in high-growth technology sectors, including smart manufacturing (Industry 4.0), smart office, and new retail solutions. However, the company faces significant profitability challenges, having reported consistent net losses over the past three fiscal years.
• The company’s financial performance has been weak, characterized by negative net margins and volatile operating cash flows. Despite a significant increase in revenue in the most recent fiscal year, net losses widened, highlighting persistent margin pressures and operational inefficiencies.
• An affiliate of Foxconn Technology Group, Maxnerva leverages deep manufacturing IT expertise. This relationship could provide a competitive advantage in its Industrial Solution segment, but the company’s ability to translate this into sustainable profitability remains a key uncertainty for investors.

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• Connect inclusion. We expect MiniMax (100 HK) to enter southbound Stock Connect on 6 Aug 2026 after exchange announcements before the open.
• Southbound demand. We use Zhipu’s (2513 HK) post-inclusion southbound accumulation as the closest precedent for MiniMax.
• Revision, tokens and re-rating. Revenue upgrades are running ahead of share supply. OpenRouter data suggest a valuation gap vs Zhipu.

• 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.
• We continue to expect no index changes for September 2026. However, we estimate there to be around US$1.3bn in one-way flows triggered by capping.
• The official index changes and indicative weights for the September 2026 index rebal event will be announced publicly after the close on Friday 21st August 2026.

• MiniMax (100 HK) listed on 9 January and was added to the Hang Seng Composite Index (HSCI) in June.
• As a security with Weighted Voting Rights (WVR), MiniMax (100 HK) will be added to Southbound Stock Connect from the start of trading on 6 August.
• The stock is trading 80% lower from its highs and there should be a lot of interest from mainland investors.

• SHEIN Global Holdings (SHEIN HK), a global online fashion and lifestyle company, aims to raise up to US$3bn in its Hong Kong listing.
• Shein is a global online fashion and lifestyle company serving approximately 273m active customers in approximately 160 markets in 2025.
• We have looked at the company’s past performance in our previous note. In this note, we will undertake a peer comparison.

• Unitree Robotics is getting ready to complete its IPO on the STAR market of this Shanghai Stock Exchange this month. 
• Unitree would become the first major producer of humanoid robots to be listed on the Chinese mainland.
• Target valuation is about 42 billion yuan (US$5.7 billion). Subscription date is 10 August. The company is looking to raise 4.2 billion yuan (US$618 million). 

• SHEIN Global Holdings (SHEIN HK), a global online fashion and lifestyle company, is pre-marketing a HKEx IPO to raise US$3 billion.
• I previously discussed the IPO in SHEIN Global IPO: The Bull Case and SHEIN Global IPO: The Bear Case. 
• In this note, I present my forecasts and examine Shein’s potential valuation range. My analysis suggests a valuation range of US$33.3 billion to US$34.0 billion.

• Pivoting Capital from Buybacks to AI Infrastructure: Tencent is executing a tactical asset allocation shift. After deploying HKD 80.0 billion on share buybacks in 2025, the company is scaling back repurchases in 2026 to fund its doubling of generative AI and foundation model expenditures to over RMB 36.0 billion. This shift is enabled by robust domestic free cash flow (RMB 223.9 billion in 2025) and a fortress net cash balance of RMB 146.9 billion as of Q1 2026.
• The “Sell the Parent, Buy the Subsidiary” Divestment Strategy: Direct block sales (such as the recent $1.5 billion Kuaishou divestment in July 2026) are being prioritized over “distributions in specie” (historically used for JD.com and Meituan) to secure immediate liquidity for AI capex. At the same time, Tencent is reinvesting directly in high-growth AI subsidiaries—such as Kuaishou’s Kling AI—allowing it to maintain strategic ecosystem partnerships without carrying legacy, low-growth equity baggage.
• BU-Level Profitability and Margin Discipline: Performance incentives for business unit leaders have structurally evolved. While WeChat (WxG) remains isolated from short-term margin pressures to protect ecosystem health, the Cloud & Smart Industries Group (CSIG) was successfully rationalized under a strict “profitable-revenue” framework, converting it from a cash-drain to a RMB 5.0 billion adjusted operating profit in 2025 by cutting low-margin reseller contracts and shifting to proprietary SaaS/PaaS.

• On Wednesday REUTERS reported the Trump administration is drafting a ban on U.S. imports of new models of Chinese data center components. 
• Zhongji Innolight (300308 CH) fell 7.27% on Wednesday, as export-dependent optical module makers could be severaly impacted by the ban. Some see this purely as a negotiation tactic from Trump.
• We recently pointed out downside risk for Zhongji Innolight, so let’s have a look to fresh, updated support and profit target models to evaluate the stock’s possible range.

• Zhongji InnoLight (300308 CH / 3308 HK) trades 31% below its all-time high, while the consensus price target implies upside of 35%.
• Historical periods with volatility above 100% have produced higher average and median subsequent one-month returns than lower-volatility regimes.
• Implied volatility above 100% is extreme by any standard, generating exceptionally rich option premiums that can be monetised through put selling, albeit with exposure to further share-price weakness.

• Dongshan’s core competitiveness lies in its technological R&D barriers. Dongshan has the ability to provide integrated comprehensive solutions, making it one of the few all-round suppliers among new energy customers.
• Affected by the price reduction of old models from major customers in 2024, Dongshan’s profit was under pressure. The improvement in 26Q1 results indicates that performance turning point has occurred. 
• There is usually a 20%-40% A/H discount, but Hong Kong stock market shows high recognition for high-growth technology-based manufacturing enterprises. Therefore, we expect an A/H discount of 20-30% for Dongshan.