Daily Brief China: Alibaba, JD Industrial Technology , China International Capital Corporation, Chuangxin Industries, Yum China Holdings , Fujian Lemo IoT Technology, Zhihu Technology and more

• In F2Q26, pro forma revenue increased by 18% YoY excluding two disposals.
• It was successful that the company rebranded its food delivery business.
• However, the rebranding brought significant sales and marketing expenses in F2Q26.

• JD Industrial Technology (2231713D CH), a leading industrial supply chain technology and service provider in China, is seeking to raise US$500 million.
• JDI is the largest industrial supply chain technology and service provider in China in terms of GMV, customer coverage and SKU offerings in 2024, according to CIC.
• The investment case is bearish due to weak market share gains, declining product revenue growth, margin pressures, declining cash generation and factoring of receivables. 

• CICC (3908 HK)‘s announced merger with Dongxing Securities (601198 CH) and Cinda Securities (601059 CH) will elevate it to the 3rd largest HK-listed Chinese securities company.
• Based on our assumptions, its EPS will be diluted by 7.1%, BPS enhanced by 12.2%, and ROE lowered by 1pp for FY26, before accounting for synergy.
• Its presence in Fujian (+616.7%), Liaoning (+500%), and Beijing (+100%) will be significantly enlarged. Additionally, it will open up potential benefits from optimisation.

• Vertically integrated Inner Mongolia smelter with second-quartile cost positioning, expanding renewables and alumina self-sufficiency, and entering overseas low-carbon production via its Saudi project.
• FY24 margins inflected sharply; mid-cycle valuation implies material upside with strong sensitivity to aluminium pricing and structural demand drivers including AI datacentres, EVs, and grid expansion.
• Base-Case Target Price HK$18.6 (24% upside); bull-case HK$22.1; bear-case HK$16.9, supported by integrated operations and medium-term EBITDA expansion potential.

• Yum China Holdings Inc., a licensee of Yum!
• Brands in China, presented mixed results in the third quarter of 2025.
• On a positive note, Yum China reported a record $400 million in adjusted operating profit, marking an 8% increase year-over-year.

• Lemo can replicate on a large scale through offline outlets to reduce operating costs.But this model is characterized by heavy assets, with a single profit model of limited risk resistance.
• Insufficient rigid demand is a major challenge for the industry.The declining revenue growth reflects the ineffective business expansion of Lemo, and the Company may have already encountered a growth ceiling. 
• Valuation of Lemo would be lower than peers due to the concerns of business expansion and slowing revenue. For example, 12-15x P/E may provide more safety margin for investors.

• Zhihu is a leading online content community in China, evolving from a Q&A-inspired platform to a comprehensive content ecosystem. Its primary revenue streams include paid memberships, marketing services, and vocational training.
• The company is increasingly focusing on leveraging artificial intelligence to enhance content creation, distribution, and monetization. Recent developments include the launch of an AI-powered search feature called ‘Zhida’ to provide direct answers by synthesizing existing content.
• While facing challenges in achieving consistent profitability and navigating a competitive and regulated market, Zhihu has demonstrated progress in narrowing its non-GAAP operating losses and is aiming for full-year non-GAAP breakeven.

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