In today’s briefing:
- Alibaba Drops 8%: What Friday’s U.S. Sell-Off Means for Hong Kong Stocks
- Weekly Deals Digest (12 Oct) – Hang Seng Bank, Soft99, Toyota Industries, Infomedia, Tekscend
- Last Week In Event SPACE: Hang Seng Bank, Soft99, Sihuan Pharma, Dongfeng Motor
- China Healthcare Weekly (Oct.12) – 11th National VBP, Future BD Trend, Hengrui Is Facing Headwinds
- China’s State-Owned Auto Giants Turn to Huawei in Smart Car Race
Alibaba Drops 8%: What Friday’s U.S. Sell-Off Means for Hong Kong Stocks
- Context: Friday’s sell-off occurred after the Hong Kong market closed, but several Hong Kong–listed companies were caught up in the rout through their U.S.-listed ADRs.
- This Insight details the impact on 15 prominent Hang Seng Index constituents — including Alibaba, Tencent, and HSBC. Implied volatility in U.S.-traded options on these ADRs moved sharply in response.
- Why Read: Understand what to expect when the Hong Kong market reopens after the weekend — both in terms of price performance and implied volatility.
Weekly Deals Digest (12 Oct) – Hang Seng Bank, Soft99, Toyota Industries, Infomedia, Tekscend
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: FineToday Holdings (420A JP), Tekscend Photomask (429A JP), Tata Capital Limited (TATACAP IN), LG Electronics India (123D IN), JST Group (1703609D CH) IPOs.
- Event-Driven developments: Hang Seng Bank (11 HK), Shengjing Bank Co Ltd H (2066 HK), Soft99 Corp (4464 JP), Toyota Industries (6201 JP), Infomedia Ltd (IFM AU).
Last Week In Event SPACE: Hang Seng Bank, Soft99, Sihuan Pharma, Dongfeng Motor
- As with large, clean liquid deals in Asia-Pac, expect Hang Seng (11 HK)‘s annualised spreads to widen (i.e. gross spread remains static) as investors hit their full quota early on.
- The question is whether Soft99 (4464 JP)‘s MBO Bidco raises the price to ¥3,200 saying “let’s split the difference”, and that would make some people happy. It’s doubtful they will.
- Sihuan Pharmaceutical (460 HK) has benefited a little from the HK$500mn buyback programme announced last October. But a HK$11bn run up in market cap YTD? This looks stretched to me.
China Healthcare Weekly (Oct.12) – 11th National VBP, Future BD Trend, Hengrui Is Facing Headwinds
- The 11th national VBP has optimized the selection of price difference control “anchor points”, which is an important signal, implying that future VBP will follow the general direction of “anti-involution”.
- As long as there’s no significant difference in pipeline data, buyers are more concerned about the speed of R&D progress and may not necessarily dwell on potential advantages and disadvantages.
- Hengrui’s innovative drug revenue was slightly lower-than-expected. The Company’s 2025 employee stock ownership plan has lowered the compound growth target for innovative drugs from 30% to 25%.
China’s State-Owned Auto Giants Turn to Huawei in Smart Car Race
- Another of China’s major state-owned automakers is expanding its collaboration with Huawei Technologies Co. Ltd., as legacy carmakers increasingly turn to the tech giant for an edge in the smart vehicle race.
- Dongfeng Motor Group Co. Ltd. Chairman Yang Qing on Monday met with Huawei founder Ren Zhengfei, stating that Dongfeng will pursue comprehensive cooperation with Huawei in areas such as corporate management, product design, smart technologies and marketing, according to a Sept. 23 company statement.
- Several of Dongfeng’s brands, including Voyah, eπ and M-Hero, have already integrated Huawei’s systems into their vehicles.
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