In today’s briefing:
- Alibaba (9988 HK): It’s Raining AI at the Apsara Conference, Firing up the Stock.
- Chery Automobile IPO (9973 HK) IPO: Trading Debut
- Alibaba (9988.HK): Overheated Momentum and Shifting Sentiment – Constructing a Smarter Hedge
- Chery Auto IPO (9973.HK): Modest Potential Upside, Geely Auto Screens As a Good Comparison
- Baidu (9888.HK): Overheated Trading and Skew Dynamics Highlight a Distinct Hedge Opportunity
- Chery Auto IPO Trading – Half Decent Demand
- Big Cap China Banks – Two Positive Picks
- Solarspace Technology Pre-IPO Tearsheet
- Pre-IPO Sainte Nutritional – The Core Business Is Facing Risks
- Lucror Analytics – Morning Views Asia
Alibaba (9988 HK): It’s Raining AI at the Apsara Conference, Firing up the Stock.
- Alibaba (9988 HK) launched Qwen3-Max, its largest LLM to date, along with a suite of Qwen3 models and technical upgrades at its annual flagship conference, reinforcing its full-stack AI ambitions.
- The stock has surged nearly 50% month-to-date, fueled by investor optimism over AI-related upside, since the August 29 investor call.
- Investors now await proof that execution and performance will deliver on Alibaba’s bold technical claims and high market expectations.
Chery Automobile IPO (9973 HK) IPO: Trading Debut
- Chery Automobile (9973. HK) priced its IPO at HK$30.75 per share to raise gross proceeds of approximately US$1.2 billion. The shares will begin trading on September 25.
- The IPO was discussed in Chery Automobile IPO: The Bull Case, Chery Automobile IPO: The Bear Case and Chery Automobile IPO (9973 HK): Valuation Insights.
- The market sentiment of the peers has declined since the IPO launch. Chery Auto is fairly valued at the IPO price.
Alibaba (9988.HK): Overheated Momentum and Shifting Sentiment – Constructing a Smarter Hedge
- Baba’s recent surge mirrors past rallies, with recent sideways price action raising a caution flag.
- Metrics from the options market suggest that sentiment that was overheated has begun to turn.
- We explore an alternative hedge that will not cap a continued rally but is less expensive than directly buying Puts in Baba.
Chery Auto IPO (9973.HK): Modest Potential Upside, Geely Auto Screens As a Good Comparison
- Chery Auto, the second largest Chinese domestic brand passenger vehicle company, priced its IPO at the high end of the range at HK$30.75/share.
- High demand for the stock was predictable. Cornerstone investors collectively agreed to acquire ~$588M worth of Chery Auto shares in this offering.
- The Chery Auto stock is set to start trading on Thursday. I see modest potential upside vs. IPO offer price as growth is slowing down and margins compressed.
Baidu (9888.HK): Overheated Trading and Skew Dynamics Highlight a Distinct Hedge Opportunity
- There are multiple signs of overheating in Baidu trading including accelerating stock and option volumes.
- Skew has been driven higher by strong demand for up-strike Calls.
- We recommend a hedge that tilts the odds in the holder’s favor while establishing the position at a credit.
Chery Auto IPO Trading – Half Decent Demand
- Chery Automobile (9973 HK) raised around US$1.2bn in its Hong Kong IPO.
- Chery Auto is a Chinese passenger vehicle company which designs, develops, manufactures and sells passenger vehicles, including internal combustion engine vehicles and new energy vehicles, both domestically and overseas.
- We have looked at the company’s past performance in our previous notes. In this note, we talk about the trading dynamics.
Big Cap China Banks – Two Positive Picks
- The macro-economic backdrop in China is challenging for banks, with soft economic growth driving worsening credit quality and dovish monetary policy pushing interest margins lower
- Nonetheless, China banks balance sheets appear to be relatively robust, and we screen ten large cap banks for contrarian buy opportunities
- We focus on two banks; Ping An Bank and CCB are our buy recommendations for their relatively strong returns and sound credit quality metrics
Solarspace Technology Pre-IPO Tearsheet
- Solarspace Technology (2221225D CH) is looking to raise about US$100m in its upcoming Hong Kong IPO. The deal will be run by China Securities International and CITIC Securities.
- Solarspace Technology Co., Ltd. is a global specialized photovoltaic (PV) cell manufacturer with an integrated presence in PV modules. which are the core components that convert sunlight into electricity.
- The company operates in the midstream of the solar value chain, focusing on the research, development, and large-scale production of both N-type and P-type PV cells, and PV modules.
Pre-IPO Sainte Nutritional – The Core Business Is Facing Risks
- Allergy prevention and treatment products are core business. Although proportion of allergic children is increasing, it’s not enough to offset the decline in demand caused by the decrease in newborns.
- Due to fierce market competition and inadequate adult FSMP education, the non-infant FSMP market is not easy to operate. The acceleration of registration for FSMP will lead to fierce competition.
- Our 2025 forecast is revenue could be up 20% YoY, reaching RMB1 billion.Valuation of Sainte Nutritional should be higher than peers due to higher profit margin and performance growth rate.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: Seazen Group, Cikarang Listrindo, Nickel Industries, China Vanke
- UST yields declined 2-5 bps across the curve yesterday, driven by solid demand for a 2Y notes auction even as Fed officials gave differing views over future rate cuts. The UST curve bull flattened, with the yield on the 2Y UST dropping 2 bps to 3.59% while that of the 10Y UST decreased 4 bps to 4.11%.
- Equities retreated from record-high levels after Fed Chairman Jerome Powell gave no indications of a rate cut in October during his policy speech. The S&P 500 fell 0.6% to 6,657, while the Nasdaq slumped 0.9% to 22,573.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
