China

• Capacity is booked through end-2027, with Dell, HP, Lenovo and Apple prioritised; FY25 utilisation already 95.73% — this is contracted revenue, not a forecast.
• The industry stopped behaving like a commodity: Micron and SK Hynix now take prepayments and lock volume, pushing PC and handset makers toward CXMT, the largest uncontracted supplier left.
• BULLISH, TP Rmb11.65 (+34.5%): 6.5x FY26E EPS, a deliberate discount to peers that prices zero HBM optionality and concedes the scarcity window closes around 2028.

• In May and June, domestic and outbound Chinese travel demand both softened
• Given higher fuel prices and weak consumer sentiment, this shouldn’t be a surprise
• For Trip.com, we believe tepid Chinese demand could delay recovery in momentum

• H1-26 revenue Rmb276.9bn (+54.8%), net profit Rmb43.3bn (+42.0%). Derived 2Q net profit of Rmb22.5bn beat LSEG consensus by 5%. Storage +87.5%; utilisation 94.9%.
• Board approved a Rmb20-40bn buyback for cancellation — an A-share record — capped at Rmb573, plus a Rmb6.5bn interim dividend. Returns now exceed April’s placement.
• BULLISH, FV Rmb500 on 24x FY26E EPS of Rmb20.9. Prefer A over H: the buyback covers A-shares only. 

• High Receivables Impairment & Weak Cash Quality: Despite strong statutory net income of HK$431.6 million for the trailing twelve months, Pico Far East’s free cash flow stood at only HK$222 million. This massive gap is driven by working capital tied up in contract assets and delayed payments from state-owned enterprises (SOEs) in China, where Pico carries an aggressive HK$146.5 million allowance against its trade debtors.
• Squeezed EV Economics vs. Volatile Middle East Margins: Automotive clients represent 25% of Pico’s mainland China revenue. Brutal local price wars have forced a shift toward restrictive contract structures, whereas expansion into the Middle East offers 5-10% higher gross margins but exposes the company to extreme cost volatility and labor spikes of up to 30% in markets like Riyadh.
• Capital Conservatism and Dilutive Governance: The company’s decision to maintain a massive HK$1.77 billion net cash position while proposing a 20% share issuance mandate reflects a highly conservative, family-controlled governance structure that prioritizes balance sheet safety over aggressive share buybacks or high-return tech acquisitions.

• A weekly summary of key developments in ECM and Event-Driven names tracked by us in Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India, and Chinese ADRs.
• ECM developments: Zhongji InnoLight (3308 HK), Jio Platforms Ltd (1797135D IN) and Manipal Health Enterprises Ltd (1217834D IN) listings.
• Event-Driven developments: Continental Aerospace Technologies (232 HK), Guotai Junan International (1788 HK), Z Fin (1168 HK), Shinko Shoji (8141 JP), OFX Group (OFX AU), Ajinomoto Malaysia (AJI MK). 

• EQT/DG lifted their Offer Price for Kakaku.com (2371 JP) to ¥3,450/share. This “obstructs” the Bain/LY deal, slightly, temporarily, but there are nuances within. Expect Bain/LY to come over the top.
• Prosus NV (PRX NA) is cheap”  vs. Tencent (700 HK). And Naspers (NPN SJ) “rich” to Prosus. Look to long Prosus here, short Tencent here. Or long Prosus, short Naspers
• Be comfortable medium-long-term with Mitsui Matsushima (1518 JP)‘s super-cheap asset. And they have niche businesses in semiconductor/tech to spruce things up if people decide they want to run with it.

• Busy Ming (1768 HK) raised US$430m in its January 2026 Hong Kong IPO, with the IPO being offered at a fixed price of HKD 236.6/share.
• It is a rapidly growing food and beverage retailer in China. Stores are typically located in high-traffic, high visibility, and easily accessible street-side locations.
• In this note, we will talk about the lockup dynamics and possible placement.

• The apparent 2024 profit crash to 26.4 million RMB was primarily an accounting artifact rather than an operational failure, driven by a massive 72.1 million RMB non-cash share-based compensation charge following the withdrawal of their A-share IPO. On an adjusted basis, profitability grew steadily from 97.5 million RMB in 2023 to 152.0 million RMB in 2025.
• Shengsheng’s industry-leading 36.94% gross margin is structurally anchored by its vertically integrated manufacturing of proprietary cold-chain materials (vacuum insulated panels and phase change materials). This buffer shields them from traditional third-party logistics margin erosion, though domestic pricing pressures are rising as clinical sponsors demand multi-vendor setups to reduce dependency.
• The company’s “global leader” marketing narrative is severely mismatched with its actual international commercial footprint, with US operations yielding only 19.4 million RMB in 2025. Upstream financing constraints among domestic biotechs have also begun deteriorating Shengsheng’s balance sheet, pushing trade receivables to 226 million RMB and extending collection times to 106 days.

• Extreme Customer Concentration and Sourcing Interlock with Chery Automobile: Leadrive’s rapid revenue scaling is heavily dependent on a single customer, Chery Automobile (Customer D), which accounted for 57.1% of 2025 revenue and 50.0% of the first five months of 2026. Crucially, Chery acts as both a customer and a major supplier in a consigned purchasing arrangement, restricting Leadrive’s ability to optimize its supply chain margins and stripping it of pricing power.
• Severe ASP Collapse and Single-Digit Gross Margins: Intense competitive and pricing pressures from OEMs have led to a collapse in Average Selling Prices (ASPs). Motor controller ASPs fell from 4328.1 RMB in 2023 to 2473 RMB in 2025, while power brick ASPs plummeted from 4431.7 RMB to 1135 RMB. Consequently, despite surging revenues, Leadrive’s gross margin was only 5.59% in 2025 and 9.05% in the first five months of 2026, leading to a cumulative net loss of over 1.03 billion RMB since 2023.
• Structural Squeeze on the “Power Brick” Niche: Leadrive’s top market share in main drive power bricks (31.4% in 2025) represents a transient niche. As major OEMs shift from modular power bricks to fully integrated 3-in-1 and multi-in-one electric axles, Leadrive is increasingly squeezed between insourcing giants (like BYD’s FinDreams Power) and highly scaled independent Tier-1 suppliers (such as Inovance).
• Hype vs. Reality in Emerging Segments: While Leadrive is diversifying into eVTOLs and physical AI, these segments remain in their infancy. The eVTOL order pipeline is a negligible 12.4 million RMB, and while the robotic joint actuator partnership with Agibot targets 20,000 sets in 2026, it is a high-mix, low-margin segment that cannot offset the cash drain of the core automotive division in the near term.

• Guangxi Baifei Dairy Co., Ltd. is a leading buffalo dairy company in China, focusing on buffalo dairy products. Its core brand Baifeilao ranked No. 1 in China’s buffalo liquid milk.
• The company ranked No. 1 in China’s buffalo dairy products industry for retail sales value of buffalo liquid milk in 2025 with a 30.1% market share.
• Revenue was RMB1,613,606 in 2025, with gross profit of RMB607,560. Net cash from operating activities was RMB241,079 in 2025.

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• Leadrive Technology provides electric control solutions for NEVs, holding leading market positions in China, and is expanding into emerging physical AI applications.
• Leadrive Technology was No. 1 in Main-drive PEBB, motor controllers on exported vehicles, and dual motor controllers by sales revenue in 2025 in China.
• Revenue was RMB2,000,214 in 2025, with a net loss of RMB331,006, and expects to continue recording net losses in 2026.

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• Unit Economics and Payback Disparity: Geek+ Shelf-to-Person (formerly Goods-to-Person) systems achieve a 1.5 to 2.5-year payback period in high-wage markets like the US and Western Europe, driven by fully loaded warehouse labor costs of $22.00 to $28.00 per hour. In contrast, payback periods in APAC and Eastern Europe stretch to 4 to 5 years, forcing Geek+ to focus heavily on Western geographic expansion to maintain margin viability.
• The RaaS Balance Sheet Illusion: While Robotics-as-a-Service (RaaS) lowers the adoption barrier for mid-market customers, it creates a massive working capital strain on the OEM. Geek+ has largely transitioned away from carrying these assets on its own balance sheet, utilizing third-party leasing and joint-venture financing partners (such as DLL) to convert RaaS contracts into immediate upfront cash flows, shifting the credit risk away from the robotics provider.
• The Integration and Software Moat vs. Hardware Commoditization: Pure hardware margins have compressed from above 35% in 2021 to under 25% by 2026 due to intense price competition from low-cost Chinese players like Hikrobot and Quicktron. Geek+’s true defense lies in its fleet management software—which handles dynamic path planning for over 500 robots simultaneously—and its deeply embedded global systems integrator network (e.g., Körber, Dematic), which local hardware competitors cannot easily replicate.

• On Harmoni squamous NSCLC, SMMT expects FPS data in “backend of 2026” and believes interim OS data in 1H27 (with follow-up of low 20s months) to be “key focal point”
• On Harmoni-3 (2L EGFRm NSCLC post TKI), SMMT provided updated OS analysis (showing consistent HR of 0.76 for Asian and western patients). FDA PDUFA date on 14 November
• See inside for additional SMMT takeaways (on Ivonescimab’s competitions and commercial preparation) and catalyst table on ivonescimab

• Shanghai Shengsheng Pharmaceutical Cold Chain Technology is a leading integrated temperature-control supply chain service provider in China for the pharmaceutical and life science industry, with a core focus on clinical.
• Shanghai Shengsheng is the largest temperature-control supply chain service provider in China for the pharmaceutical and life science industry in 2025. Revenue increased from RMB614.2 million in 2023 to RMB727.6.
• Revenue was RMB727,574 in 2025, with a gross profit margin of 36.9% in the same year. Adjusted net profit was RMB151,984 in 2025.

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• Delton Technology is a leading Chinese manufacturer of high-end Printed Circuit Boards (PCBs), specializing in high-growth sectors such as AI servers, data centers, 5G communications, and automotive electronics. The company ranks third globally and first in mainland China for compute server PCBs by revenue.
• The company is experiencing a period of hyper-growth, with revenue increasing by 47% in 2025 and net income growing by 50%. This growth is driven by strong demand in its key end-markets. However, this expansion has led to negative free cash flow due to significant capital expenditures.
• Valuation appears stretched, with key multiples trading at a significant premium to peers. While strong growth prospects in the AI and high-performance computing sectors may warrant a higher valuation, the current market price presents a high bar for execution and leaves little room for error.

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• Margin Compression Core Drivers: The sharp decline in net profit margin from 21.8% in 2024 to 14.6% in 2025 was primarily caused by a massive non-operating 111 million yuan biological asset fair value adjustment loss and an out-of-control 45.1% surge in sales and distribution expenses (reaching 281 million yuan), which was heavily weighted down by a 44.8% increase in e-commerce platform and channel fees (to 122 million yuan).
• Severe Raw Material Bottleneck: The water buffalo milk supply chain suffers from systemic yield limitations—water buffaloes yield only 1.8 to 2.1 tons of milk per year compared to over 10 tons for Holstein cows. Despite promoting a premium “water buffalo” narrative, Baifei’s self-produced water buffalo raw milk accounts for only 3.7% of its total raw milk sourcing, forcing them to import huge quantities of standard cow’s milk from as far as Ningxia to blend into their final products.
• Defensibility and Moat Limits: Baifei’s 30.1% market share is insulated from national giants (Yili and Mengniu) because the total liquid water buffalo milk market is a tiny niche—worth just 8.5 billion yuan in 2025—which is too small to justify the fragmented sourcing and collection logistics for major giants. However, Baifei’s rapid shift toward e-commerce and discount snack channels (such as Mingming Henmang) is highly margin-dilutive, destroying their pricing power in exchange for short-term volume growth.

• 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 race for the semiannual index rebal event in December 2026.
• Currently, we continue to see 100 ADDs/DELs for the CSI 1000 index.

• Guotai Junan International (1788 HK)/GJTAI is in a trading halt “pending the issuance of an announcement pursuant to the Code on Takeovers and Mergers.” 
• It is likely that Guotai Haitong Securities (2611 HK) is seeking to privatise GJTAI. The timing would be opportunistic, as GJTAI has underperformed its peers over the last 12 months.
• I use three methods to triangulate the likely offer price. My methods suggest a price range of HK$2.80 to HK$3.50 per share, a 34.6%-68.3% premium to the last close.

• A double dose of StubWorld this week: Legend Holdings (3396 HK)‘s implied stub and simple ratio (Legend/Lenovo (992 HK)) are both around multi-year lows.
• Preceding my comments on Legend and Lenovo 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%.

• 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 race 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.

• Moonshot AI is one of the hottest companies in China. Moonshot AI is getting ready to complete its IPO in Hong Kong in late 2026/early 2027.
• Company is seeking a pre-IPO funding at about $50 billion. I think its valuation could be well north of $100 billion when it completes its IPO in about six months. 
• A critical element of Moonshot AI’s technical strategy is its adherence to an open-weight distribution model.

• We update our HK A+H listing study with 13 deals since our April analysis, extending the study universe to 43 listings since 2025.
• Aftermarket returns have rolled over. 3Q26 to date is the weakest quarter since 4Q25, with one positive deal in six.
• The international cornerstone screen has lost selectivity. Deep pricing discounts and premium compression now explain more of the positive deals.

• Silicon-Magic, a leading PMIC virtual IDM player, is seeking a HKEX listing. Huatai is the sole sponsor.
• We look at the company’s core segments: power management ICs (PMIC) and power devices.
• We then look at the company’s financial profile, profit turnaround, pre-IPO valuation and investor backing.

• Yesterday morning (23rd July), broker/investment bank Guotai Junan International (1788 HK)  (GJI) was suspended pursuant to the Takeovers Code. 
• GJI is 73.92%-controlled by the recently formed state-backed Guotai Haitong Securities (601211 CH) (GHS) – see GJS/Haitong Merger: One Formality Reg To Go. 
• GHS will be taking out GJI. The key question is at what price? 

• Permanent Balance Sheet Prioritization: The recent RMB 2.72 billion exit from Eastern Air Logistics (EAL) in April 2026 and the ongoing trimming of Lakala Payment are strictly earmarked for parent-level debt reduction rather than minority shareholder returns. With RMB 143.67 billion in total borrowings at the end of 2025, Legend’s primary directive is maintaining its credit standing and addressing structural subordination.
• Illusionary Turnarounds and Trapped Cash: The one-yuan divestment of Australis Seafoods in April 2025 was a cosmetic regulatory maneuver to save Joyvio Food (300268.SZ) from ChiNext delisting; the underlying debt and operational liabilities remain consolidated at the parent level. Concurrently, while Banque Internationale à Luxembourg (BIL) reported a 24% net income increase to EUR 210 million in 2025, ECB and CSSF capital ringfencing prevents this cash from being upstreamed to Beijing.
• Permanently Wide Negative Stub: The historically wide negative stub relative to Lenovo (0992.HK) is structurally rational. The market values Legend’s non-Lenovo portfolio at a deep negative discount due to high parent-level interest expenses that consume Lenovo dividends, weak management incentives tied to asset accumulation rather than equity value, and convertible bond hedging activity driving synthetic short interest in Lenovo.

• Hard Valuation Floor vs. Parent Justification: The parent company’s State-owned Assets Supervision and Administration Commission (SASAC) floor is set at the book value of HK$1.66 per share. While the market-speculated price range of HK$2.80 to HK$3.50 is technically feasible, the upper bound represents a P/B ratio of over 2.1x, which the parent’s investment committee will struggle to justify to regulators given that listed peers trade at 0.4x to 0.7x P/B.
• Asymmetric Blockade Risk: Because Guotai Junan International (GTJAI) is a Hong Kong-incorporated entity, execution will rely on a Scheme of Arrangement. However, the Hong Kong Takeover Code’s 10% objection rule means a tiny minority holding just 2.61% of total shares can veto the deal, creating a low-threshold leverage point for activist funds.
• Urgent Consolidation Rationale: Following the merger of Guotai Junan and Haitong Securities into Guotai Haitong Securities in early 2025, maintaining dual public-private parallel platforms in Hong Kong is highly inefficient. Privatizing GTJAI to merge it with the already-private Haitong International is the only path to realizing the group’s promised “1+1>2” international synergies.

• Zhongji Innolight (300308 CH) could raise up to US$8.1bn in its H-share listing if the Overallotment Option is exercised. The H-shares are offered at a 23.3% discount to the A-shares.
• There is a big allocation to cornerstone investors with a 6-month lockup. Fast Entry to global indices is still high probability, though early exercise of overallotment will help.
• The H-shares should be added to Southbound Stock Connect from the open of trading on 27 August following the end of the Price Stabilisation period.

• Prosus NV (PRX NA) is coming up “cheap” on my monitor versus Tencent (700 HK). And Naspers (NPN SJ) “rich” to Prosus.
• Preceding my comments on Prosus/Tencent/Naspers 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%.

• Zhongji InnoLight (3308 HK), a leading global provider of optical interconnect solutions, has launched an H Share listing to raise US$7.0 billion.
• I discussed the H Share listing in Innolight H Share Listing: The Investment Case. 
• The proposed AH discount of 23.3% (based on the close on 21 July A Share price) is attractive, and I would participate in the H Share listing.

• Zhongji Innolight, a global supplier of optical transceivers, launched its IPO to raise USD 7,021m through an A+H listing. GS, CICC, MS, and GF are the deal sponsors.
• 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.

• Alibaba Group has pushed itself deeper into the global artificial intelligence race with the preview of Qwen3.8-Max-Preview.
• The company says the new model is among the most capable systems available and ranks behind only Anthropic’s Fable 5.
• That comparison comes from Alibaba, so independent testing will still matter.

• Offshore Capital Imperative: The Hong Kong listing (H-share) target of up to USD 7.02 billion (up to USD 8.1 billion with over-allotment) is driven by the structural reality of Chinese capital controls. Onshore RMB cannot be easily deployed for the rapid global capacity expansion (primarily Thailand) required to service US hyperscalers, who accounted for 61.7% of Q1 2026 revenue and demand non-mainland supply chains.
• Structural A-to-H Discount: The 23.3% discount on the H-share price (indicative cap of HK$1,010) compared to the Shenzhen A-share price is a necessary pricing concession to clear the largest Hong Kong listing in seven years. Long-term convergence will be structurally limited because H-shares and A-shares are not directly fungible, preserving a persistent premium on the retail-dominated, liquidity-rich onshore market.
• Index Inclusion & Free Float Hurdles: The massive USD 3.45 billion cornerstone allocation (~49.1% of the base offering) creates a major technical hurdle for immediate “Fast Entry” global index inclusions due to the 6-month lock-up reducing the immediate tradeable free float. However, Southbound Stock Connect inclusion remains highly viable within 30 days post-stabilization.

• It has now been a few weeks since TikTok Shop stopped operating in Indonesia.
• As the immediate dust raised by the action has settled, all the key stakeholders – sellers, brands, investors, enablers, influencers, and of course the teams at TikTok – are back at their drawing boards planning their next moves in Indonesia.
• Outside of Indonesia meanwhile, many have asked the question –will other countries follow suit?

• The IPO of Zhongji InnoLight (3308 HK), a leading global provider of optical interconnect solutions, which seeks HK$54.5bn, is the largest since 2019.
• Its FY25-28F EPS CAGR will reach 89.8%, underpinned by the jump in revenue and expansion in margin. Its 1Q26 net profit has already surged by 262.3%.
• The IPO is priced at a 17.7% HA discount. At a HK$1.2trn market capitalisation, pegging it to its A-share will give a price of HK$1,227, or a 21.5% upside.

• Successful Elimination of Cross-Holding Complexity: The September 2023 unwind removed the restrictive cross-holding structure, resolving South African Companies Act limitations and enabling the open-ended share buyback to run continuously at both the Naspers and Prosus levels.
• Robust Buyback Accretion and Funding Runway: As of September 30, 2025, the open-ended repurchase program returned $42 billion, repurchasing 30% of Prosus’s free float and generating 18% NAV per share accretion. Supported by the July 16, 2026 irrevocable undertaking to tender Prosus’s 16.8% Delivery Hero stake to Uber for approximately $2.5 billion in cash, the group’s funding runway has meaningfully diversified beyond its primary reliance on selling Tencent shares.
• Friction Points Restricting a Full Structural Unwind: A complete corporate merger or elimination of the dual-listing structure remains blocked by prohibitive capital gains tax liabilities in South Africa, stringent exchange controls, and Dutch dividend withholding tax implications on cross-border capital distributions.
• Incentive Alignment Tension: While the buyback remains highly accretive, executive incentives under CEO Fabricio Bloisi are heavily weighted toward operational profitability and active ecosystem expansion (as evidenced by the $1.3 billion in Ecosystem adjusted EBITDA in FY26), creating an internal tension between executing passive arbitrage buybacks and building a large-scale operating technology group.

• Temu, the cross-border e-commerce platform of Chinese PDD Holdings (owner of Pinduoduo), has caused a great stir in Southeast Asia’s e-commerce landscape after its launch in Thailand in mid  July.
• The platform has achieved remarkable success in Western markets, especially in the US, where it became themost downloaded app, surpassing Amazon, and has reached 70 markets worldwide within just 24 months.
• By directly connecting manufacturers and wholesalers – mainly in China – to customers around the world, Temu offers a unique value proposition of low prices through its cross-border model, as highlighted by its tagline “shop like a billionaire”.

• STAR 50 and STAR 100 are tech-focused, blue-chip indices in Mainland China which track the top largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
• In this insight, we look at the potential ADDs/DELs for the STAR50/STAR100 indices for the September 2026 index rebal event.
• The STAR 50 and STAR 100 index rebal events could collectively trigger nearly US$2bn in one-way flows.

• Zhongji Innolight (300308 CH) is a leading global provider of optical interconnect solutions. It is seeking to raise US$7 to US$8 billion.     
• The principal products, optical transceivers, are compact devices that convert electrical signals into optical signals, and vice versa, to enable high-speed, energy-efficient and low-latency data transmission.
• The investment case is based on strong market position, AI infrastructure-fuelled revenue growth, margin expansion, cash generation and a strong balance sheet. 

• We screen HK stocks ahead of the HSCI September 2026 half-yearly review, with 44 ADD candidates and 26 DELETE candidates.
• ADD candidates are mostly new listings and prior constituents, including seven A+H names already in Connect.
• DELETE candidates include 21 MV DELETEs, three retention-line borderline names, and two velocity cases.

• German truckmaker, MAN SE (via MAN Finance and Holding) is looking to sell a ~2% stake in Sinotruk Hong Kong (3808 HK) to raise upto US$261m via a secondary selldown.
• Sinotruk (Hong Kong) Ltd is China’s leading heavy-duty truck manufacturer, focused on commercial vehicles with strong domestic market share, growing exports, and consistent cash generation.
• In this note we talk about the deal dynamics and run the deal through our ECM framework.

• Zhongji Innolight (300308 CH) (ZI), one of the world’s largest optical transceiver manufacturers, aims to raise around US$7bn in its H-share listing.
• Innolight was the global leader in 2025 in optical modules, with its products being in high demand for data centers.
• We have looked at the past performance and likely A/H premium in our previous note. In this note, we talk about the IPO pricing.

• Moonshot’s Kimi K3 model outperformed Z.AI’s GLM-5.2 in intelligence on Artificial Analysis.
• However Moonshot’s B2C and B2B customers are very different from Z.AI’s.
• Furthermore, Z.AI’s GLM-5.2 operates at four times the speed of Kimi K3.

• On the 17th July 2026 , JBM (Healthcare) (2161 HK), a consumer healthcare company, announced the spin-off of 100%-held JPJ, the group’s branded PCM products and Chinese medicine clinic services.
• Listing is slated for the HKEx, market conditions permitting. An application proof has been lodged. JBM intends to hold at least 50% of JPJ post listing.
• My calcs suggest JBM is fairly valued here – before assigning any holdco discount post spin-off. FWIW, JBM was itself spun-off from Jacobson Pharma (2633 HK) in February 2021.

• Z Fin (1168 HK) announced a scheme privatisation offer from Mr Yaping Ou at HK$6.60 per share, a 61.4% premium to the last close. The offer is final.
• The offer is light and well below intrinsic value. Based on the August 2025 funding round, the implied value of Z Fin’s stake in ZA Global materially exceeds the offer. 
• While no disinterested shareholder holds a blocking stake, the vote is not a foregone conclusion, particularly given the noticeable dissent at the recent AGM.   

• The Proposed Spin-Off of JPJ (TCM) Limited Lacks Commercial Substance: Creating a three-tier listed structure (Jacobson Pharma to JBM Healthcare to JPJ) serves as financial engineering rather than operating synergy. It will exacerbate holding company discounts across the group and severely restrict JBM’s post-transaction equity liquidity, leaving JBM as an hollowed-out holding company.
• Clinic Acquisitions Dilute JPJ’s High-Margin Heritage Profile: JPJ’s historical strength lies in its dominant 9.2% market share in the Hong Kong Proprietary Chinese Medicine (PCM) space, backed by high-margin legacy brands like Po Chai Pills. However, its recent downstream expansion into lower-margin, labor-and-rent-intensive clinic chains (Kenford and King Pui) compresses consolidated margins and threatens the return-on-capital profile.
• Severe Corporate Governance and Transfer Pricing Risks Exist: High ownership concentration under Derek Sum, combined with rapid connected transactions—such as selling a stake in Li Chung Shing Tong in November 2024 at HK$460 per share and buying it back in June 2026 at HK$600 per share—indicates value leakage from minority shareholders of JBM to the parent. JPJ’s massive HK$506.8 million net current liabilities as of March 31, 2026, highlights major intercompany restructuring risks.

• As discussed in Z Fin (1168 HK)’s Suspension: Expect Ou To Make An Offer, following Z Fin (1168 HK)‘s suspension, an Offer from Ou Yaping, Z Fin’s founder, was expected.
• And that is what unfolded late last night (21st July). Ou is Offering HK$6.60/share, by way of a Scheme. Terms are final.
• Terms are a 61.37% premium to undisturbed. Yet a 72.13% discount to NAV. Minorities are somewhat active looking at recent AGM voting. Yet terms are fair to listed peers. 

• Zhongji Innolight, a global optical interconnect player, passed hearing for an A+H listing. GS, CICC, MS, and GF are the joint sponsors.
• We look at the company’s core segments: high-speed and mid-to-low-speed optical transceivers.
• We discussed our preliminary thoughts on the company’s valuation based on A-H premium.

• Zhongji Innolight (300308 CH) one of the world’s largest optical transceiver manufacturers, now aims to raise around US$7bn in its H-share listing.
• Innolight was the global leader in 2025 in optical modules, with its products being in high demand for data centers.
• In our previous notes, we have looked at the company’s past performance and recent filings updates. In this note, we talk about the likely A/H premium/discount.

• Ascentage Pharma (6855 HK) has filed for a likely future at-the-market equity offering program of American depositary shares to raise up to US$ 200M.
• Company reported revenue of RMB 574.1M in 2025, down 41.5%, largely because of high base effect. Revenue from Olverembatinib was up 81% YoY. Lisaftoclax garnered RMB 70.6M in sales.
• Losses will continue and R&D expenses, commercialization cost will be catered to by the likes of above ADS offering and previous placement proceeds. 2027 likely to be an inflection point.

• Aulton New Energy is an established participant in China’s battery-swapping industry, offering a comprehensive portfolio of products and services across the battery-swapping ecosystem.
• As of April 30, 2026, 531 stations and over 140,000 EVs were registered. The company ranked third in China for battery-swapping station operation services revenue in 2025.
• Revenue was RMB235,134 thousand and gross profit was RMB4,123 thousand for 4M 2026, with a loss of RMB91,432 thousand.

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• SUNGROW’s three pillar business has undergone significant changes: energy storage systems surpassed PV inverters and other power conversion devices for the first time, becoming the largest source of revenue.
• The overall revenue growth showed an upward trend in 2025, but there was a sharp decline in 25Q4. Increasing competition and downward pressure on industry prices are the reasons.
• Since comparable targets of photovoltaic/new energy listed on A+H shares generally have an A/H discount of 20-30%, reasonable valuation range for SUNGROW-H shares could be P/E of 10-14x.

• Baidu (9888 HK) is looking to convert from a Secondary Listing to a Dual Primary Listing on the HKEX before the end of the year.
• Baidu should be added to the Southbound Stock Connect Buy-and-Sell list at the next rebalance of the Hang Seng Composite Index (HSCI) following the conversion.
• A float increase in the Hang Seng family and another index inclusion will bring in estimated passive buying of HK$11.8bn (US$1.5bn) along with buying from mainland investors via Stock Connect.

• Welcome to Curator’s Cut – a fortnightly roundup of standout themes from the 1,200+ insights shared on Smartkarma.
• In this cut, we track the fitness wave across Asia, why Thailand is the one Asian market foreign investors are buying, and the wave of consolidation reshaping mobility-tech.
• Want to dig deeper? Comment or message with the themes you’d like to see highlighted next.

• As discussed in Get Nice (64 HK): Expect A Founder’s Scheme, following Get Nice (64 HK)‘s (GNH) suspension, an Offer from Hung Hon Man, GNH’s chairman (& founder), was expected.
• And that is what unfolded late Friday night (17th July). Hung is Offering HK$4/share, comprising a HK$2 consideration + HK$2 special dividend. Terms appear not to be final.
• Terms are also low-balled. A 17.6% premium to undisturbed. And a 62.8% discount to NAV. Yet minorities are indifferent looking at AGM voting. I’m guessing this gets up, as is.

• JPJ (TCM) Limited is a leading Hong Kong-based proprietary Chinese medicine group with a vertically integrated business model centered on trusted heritage brands.
• Ranked first in Hong Kong PCM market by end-market sales in 2025 (9.2% share), revenue grew 16.9% CAGR from HK$339.3M (FY2024) to HK$463.8M (FY2026).
• FY2026 revenue was HK$463,814, with profit for the year at HK$80,893, but net current liabilities reached HK$506.8 million.

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• China Modern Dairy (1117 HK) (CMD)’s 30th October 2025 SPA dovetailed into a conditional MGO for China Shengmu Organic Milk (1432 HK) (CSM). That Offer is now effectively unconditional.
• According to CCASS, CMD controls ~71.2% – at least. The first close is the 21st July. The MGO may be declared unconditional today.
• CMD intends to maintain CSM’s listing. This Offer will likely close on the 4th August.  

• ChiNext-Listed Zhongji InnoLight (300308 CH) is seeking an H-share IPO in Hong Kong, with the market expecting it to raise US$7-8bn. It is trading at 36.4x FY26 PER.
• Key positives are its industry leadership with first-mover advantage, position to gain from AI infrastructure spending, and strategic R&D investment and technological strengths.
• Key negatives are its very high customer concentration, significant geopolitical and US market exposure, and product and technology transition risks.

• In a recent insight we theorized the Hang Seng TECH Index (HSTECH INDEX EQUITY) was about to bottom and rally. The rally happened as expected, but lasted only 2 weeks.
• After 2 weeks up, the following (last week’s) negative WEEKLY Close could be a potential tactical entry before the rally restarts. Our model signals the next leg could reach 5000.
• Global tech valuation de-rating (Nasdaq AI selloff), geopolitical macro shock (Iran war), and China’s recent domestic economic data are the possible headwinds to our model’s theory.

• Zhongji Innolight (300308 CH) one of the world’s largest optical transceiver manufacturers, now aims to raise around US$7bn in its H-share listing.
• Innolight was the global leader in 2025 in optical modules, with its products being in high demand for data centers.
• In our previous notes, we have looked at the company’s past performance and likely A/H premium/discount. In this note, we talk about the updates from its recent filing.

• Both of Nongfu’s gross margin and growth rate rank No. 2 among beverage big eight.
• The company won the price war in both drinkable water and beverage.
• We believe revenue will grow by 15% YoY and the operating margin will be stable in 1H26.

• ZHONGJI adopts a “sales-driven” approach. The core is to respond quickly to customer orders rather than stockpiling goods for sale.Supply chain is efficient during prosperous periods but vulnerable during disruptions.
• The uncertainty of the technical route and the development progress of the 3.2T optical transceivers are both turning points. The outcome of the technological competition is far from being settled.
• The recent sharp fluctuations in A-shares may affect the pricing benchmark for H-shares. In our view, a comfortable valuation range could be P/E of 25-35x, based on 2026 forecast.

• Zhongji InnoLight is a leading global provider of optical interconnect solutions, offering transceivers that convert electrical and optical signals for data transmission.
• As the world’s largest provider of optical interconnect solutions by revenue, we were first to introduce 400G, 800G, and 1.6T transceivers.
• For the three months ended March 31, 2026, revenue was 19,496,398 thousand, with an adjusted net profit margin of 33.9%.

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• Get Nice (64 HK)/GNH has disclosed a scheme offer from Mr Hung Hon Man (founder and Chairman) at HK$4.00 (scheme consideration of HK$2.00 + special dividend of HK$2.00).
• While the offer represents a five-year high, it is light, implying a P/B multiple at a discount to precedent transactions and peer multiples. 
• However, the scheme vote is low-risk, as no disinterested shareholder holds a blocking stake. Unless an activist(s) takes an interest by building a blocking stake, this is a done deal.

• Immvira Bioscience Inc. is a clinical-stage biotechnology company focused on novel oncolytic immunotherapies and engineered exosome therapies, aiming to be a global leader in bladder cancer treatment.
• Immvira, incorporated in 2015, has a pipeline of two oncolytic immunotherapy candidates and five engineered exosome assets. MVR-T3011 received FDA Fast Track Designation for HNSCC in March 2024.
• The company reported a loss of RMB(518,861) for 2025, with net current liabilities of RMB(2,390,634) as of May 31, 2026.

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• Primary conversion. Baidu (9888 HK) announced on 16 Jul 2026 that its board approved pursuing dual-primary conversion. This note assesses the Connect path, conditions, and timeline.
• ADD timing. Baidu retains WVR through conversion, so the ADD path runs through the regular semi-annual cycle. We assess whether the September 2026 regular batch ADD is attainable.
• Trading perspective. Prior Connect ADD cases show positive southbound flows in all five peers and positive 10-day returns in all five.

• Hosin Global Electronics (HGE HK) is looking to raise at least US$500m in its upcoming Hong Kong IPO. The deal will be run by China Securities International.
• HOSIN Global Electronics is a leading independent memory product enterprise, ranking as the world’s fifth largest and China’s second largest by revenue in 2025, according to Frost & Sullivan (F&S).
• HGE operates under a fabless business model as it  outsources its manufacturing processes, relying on third-party foundries for wafer processing and outsourced semiconductor assembly and other services.

• Yonyou Network Technology is a leading China-based provider of enterprise software and intelligent services, leveraging AI, big data, and cloud computing. It seeks a Hong Kong listing for global expansion,.
• Yonyou is the largest player in China’s enterprise software market by 2025 revenue, covering 78% of Fortune China 500 companies. Cloud-based customers grew 31.1% by Q1 2026.
• Revenue was 8,862,267 in 2025, with cloud-based services comprising 81.4% of Q1 2026 revenue. However, the company reported a loss of 1,351,098 in 2025.

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• Tencent (700 HK) is scheduled to report its H1 / Q2 2026 financial results on August 11–12, 2026.
• The stock went a bit lower since our BUY signal in early May 2026, but not dramatically lower, current price is virtually the same as early May.
• Consensus ratings: overwhelmingly bullish. 43 out of 47 institutional analysts track the stock as a “Buy” or “Strong Buy”.

• Duty Free International (DFI) is now a larger and more complex Group.
• The company reported 1QFY2027 revenue of RM61.13m, up 89.9% from RM32.20m. The increase reflects the first full quarter of United Industries Group (UIG) inside the Group.
• This changes our analysis from a duty-free recovery test to a mixed-business test. The quarter does not prove recurring owner profit, cash conversion or acquisition return. 

• Dominant Market Position with Integrated Services: Wonderful Sky Financial Group is the largest financial public relations and communications group in Hong Kong, offering a comprehensive “9-in-1″service model. This integrated approach, encompassing financial PR, investor relations, financial printing, international roadshows, and more, provides a significant competitive advantage and a one-stop solution for clients in the capital markets.
• Strong Financial Rebound and Growth Trajectory: The company has demonstrated a significant financial turnaround, with revenue increasing by 36.5% and net profit surging by 106.8% in the fiscal year ending March 31, 2026. This strong performance is underpinned by a revival in the Hong Kong IPO market, which is expected to see continued growth.
• Favorable Industry Tailwinds: The Hong Kong IPO market is experiencing a strong resurgence, with fundraising expected to reach near-record levels. This positive momentum, driven by an increase in A+H listings and new economy companies, provides a robust pipeline of opportunities for Wonderful Sky’s core service offerings.

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• Semiconductor weakness continued to weigh heavily on the market and left Information Technology lagging other sectors.
• Market breadth remained positive, although the distribution of returns showed considerably greater weakness among the largest decliners.
• Index implied vols remained firm while single stock implied vols continued to normalize, narrowing the unusually wide spread between them.

• Following HSCI’s May 2026 review, six names became HK Connect eligible in the June 2026 implementation, with no deletions. All post-implementation windows through weeks 2 to 4 are complete.
• ADD first-week returns fell, but less than the historical first-week decline. Breadth was better than the historical base rate, and weeks 2 to 4 turned positive.
• Our pre-implementation first-week decline read held for the positive-bridge names, while the negative-bridge group split against its severe-decline precedent.

• We study the 32 HK IPOs of at least US$100m listed in 2Q26, comparing Day 1 and 2W performance with the five prior quarters.
• 2Q26 had more deals, smaller median deal size, and record subscription demand. Day 1 return reached a six-quarter high, while 2W follow-through weakened.
• International-Sponsored deals outperformed domestic-only deals after trailing for three quarters, while the high-retail-subscription debut screen produced negative Day 1 closes for the first time.

• Lotus Horizon is a specialized subcontractor in Hong Kong’s facade and building metal works sector, a niche market driven by both new construction and renovation projects.
• The company’s recent financial performance shows significant stress, with revenue declining and a swing from a net profit of HK$3.2 million in FY2025 to a net loss of HK$3.3 million in FY2026.
• While the broader Hong Kong construction market is expected to stabilize, supported by government infrastructure spending, the company faces intense competition, high uncertainty, and a challenging environment for private sector projects.

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• Jinan Janbon Metallic Materials is a prominent silver powder supplier in China, specializing in PV silver paste for PV cells, with over a decade of experience.
• The company ranked first in domestic PV silver powder sales in 2023 and xBC cell silver powders in 2025, with revenue increasing to RMB5,066.5 million in FY2025.
• FY2025 revenue reached RMB5,066,505 with a 4.7% gross profit margin, but net cash flows from operations were negative in FY2023, FY2024, and 5M 2026.

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• Shenzhen Vergiga Semiconductor is a China-based provider of high-performance power semiconductor devices, focusing on R&D, design, and sales of WLCSP products. It uses a mixed business model.
• Gross profit margin of WLCSP products increased from 18.6% in 2024 to 31.7% in 2025, while per-unit costs decreased by 23.4%.
• Profit for the five months ended May 31, 2026, decreased to RMB(510), with net cash used in operating activities.

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