Daily Briefs

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

• I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads: Smart Share Global (EM US), Mayne Pharma (MYX AU), ENN Energy (2688 HK), Soft99 Corp (4464 JP), Dongfeng Motor (489 HK), Joy City Property (207 HK). 
• Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Mandom Corp (4917 JP), Humm Group (HUM AU), Ainsworth Game Technology (AGI AU), Seven West Media (SWM AU). 

• The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
• In this insight, we take a look at the December 2025 index capping flows.
• We have also presented our index change expectations for the next semiannual index review which will take place in March 2026.

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

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

• The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
• In this insight, we take a look at our final expectations of index changes and the resultant capping flows for HSTECH index rebal event in December 2025.
• We expect one index change and roughly US$1.7bn in one-way index flows in December 2025.

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

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

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

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

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

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