Daily Brief China: Alibaba, Zijin Gold, Shengjing Bank Co Ltd H, Kweichow Moutai, Hesai Group, SJM Holdings, Butong Group and more

• Alibaba Group is back in the spotlight after unveiling a trifecta of high-profile moves that have reignited investor interest and sent its shares sharply higher.
• The Chinese tech conglomerate raised $3.2 billion through the issuance of zero-coupon convertible bonds due 2032, a financing round earmarked for strengthening its AI and cloud infrastructure.
• At the same time, reports surfaced that Alibaba is beginning to deploy in-house AI training chips, reducing reliance on Nvidia’s costly accelerators and signaling a shift toward technological sovereignty in the middle of China’s broader AI race.

• Zijin Gold (2579355D HK) is a global leading gold mining company and the overseas gold segment of Zijin Mining Group (601899 CH). It is pre-marketing an HKEx IPO to raise US$3bn.  
• I previously discussed the IPO and outlined my investment thesis in Zijin Gold IPO: The Investment Case. 
• In this note, I take a look at the new information from the PHIP. The 1H25 results and latest developments underscore my previous bullish thesis. 

• High Growth: ~80% production increase (36t to 65t, 2024–27E) via Buriticá, Aurora, Porgera, Central Asia.
• Valuation: Filing suggests US$12–16bn (US$3–4bn raise, 6–7.5× EV/EBITDA); market eyes US$30–40bn.
• Key Dynamics: SOE-backed expansion; risks in EM execution and AISC (~US$1,350/oz by 2027E).

• Zijin Gold (2579355D HK) is looking to raise up to US$3.0bn in its upcoming Hong Kong IPO.
• It is a global leading gold mining company formed by combining all of the gold mines of Zijin Mining, located outside of China.
• We have looked at the company’s past performance, and done a peer comparison in our previous note. In this note, we will provide a PHIP update.

• On the 26th August, rural commercial bank Shengjing Bank Co Ltd H (2066 HK) announced a HK$1.32/Share Offer, a pretty tragic 86.49% discount to NAV.
• On the 12th September, the Offeror bumped terms to HK$1.60 (best & final). That’s a 40.5% premium to undisturbed, but still a 83.96% discount to NAV.
• The Composite Document’s now out, with a H-share class meeting on the 21st October. The IFA (Gram Capital) says “fair & reasonable”. To be expected. 

Key points (machine generated)

• Moutai is a premium baijiu essential for social gatherings in China, symbolizing respect and status.
• Despite strong financial performance, Moutai’s stock price has stagnated due to oversupply and pricing volatility.
• The long-term outlook for Moutai remains optimistic, with potential for recovery as market conditions stabilize.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Hesai Group (HSAI US) raised around US$530m in its secondary listing in Hong Kong.
• We have looked at the deal dynamics in our previous note. 
• In this note, we talk about the ADS movement and trading dynamics.

• LiDAR TAM is underestimated – Current consensus misses the true size. Our work suggests 2030 TAM can be 70–120% higher than implied; Hesai best positioned as the market leader.
• Three Sub-segments Key –China LiDAR penetration reaching 60% penetration, Global ex-China ADAS (and LiDAR) adoption accelerating to 25–35%, and Robotics (logistics, humanoids, appliances) building upto $60bn market by 2030.
• Though the use-cases and upside for the sector can be far beyond current estimates, the industry faces a significant technology risk and the jury is still out.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: SJM Holdings
• UST yields rose on Friday, led by the belly and long end, unwinding part of last week’s yield decline. The yield on the 2Y UST was up 1 bp at 3.56%, while that on the 10Y UST advanced 4 bps to 4.06%.
• Equities held steady near record high levels. The S&P 500 was unchanged at 6,584, while the Nasdaq rose 0.4% to 22,141.

• BUTONG adopt a marketing-driven model, which lacks underlying innovation in products, may be effective during market expansion, but is prone to the problem of sluggish growth during valuation transition period.
• If the approach of promoting expansion by relying on high growth of low-profit business continues, profit space will be suppressed,which isn’t friendly to the narrative of capital market after IPO.
• 2025-2027 revenue growth could be 30%, 25%, 20% respectively. Considering the high growth in the short term as well as the concerns, P/E of 20-25x could be a comfortable range