In today’s briefing:
- Bright Smart Securities (1428 HK): A Takeunder MGO?
- BYD (1211 HK) Positioning Ahead of Q1 2025 Results
- Xiaomi Corp (1810 HK): Top Trades and Strategic Insights from HKEX Options Trading
- Xiaomi Corp (1810 HK): Volatility Insights and Analysis Identify Spread Opportunities
- Pre-IPO Bama Tea – The Business Model, the Challenges and the Outlook
- Sinopec (386) Earnings: Volatility Setup and Post-Release Price Behavior
- Bright Smart (1428 HK): Chairman’s Scheme, Or Cashing Out?
- ICBC (1398.HK) Earnings: Volatility Pricing, Post-Release Trade Setup & Tactical Hedge
- Liuliu Orchard Group Co Ltd Pre-IPO Tearsheet
- Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – April 2025
Bright Smart Securities (1428 HK): A Takeunder MGO?
- Bright Smart Securities And (1428 HK) is in a trading halt “pursuant to the Hong Kong Code on Takeovers and Mergers, which constitutes inside information of the Company.”
- It is likely that Mr Lum, the founder and chairman, has entered a sale and purchase agreement to sell his controlling stake, which would trigger a mandatory general offer (MGO).
- The shares are at an all-time high and have a P/B multiple that is a material premium to peers. The MGO price is likely to be lower than last close.
BYD (1211 HK) Positioning Ahead of Q1 2025 Results
- BYD (1211 HK) will release its Q1 2025 results on April 25. The company has issued a positive profit alert, projecting net income around RMB 8.5 – 10 billion.
- Expected earnings per share ranging from RMB 2.91 to RMB 3.42, up from RMB 1.57 in the same period last year.
- Our model currently does not indicate the stock is overbought, but a surprise pullback is always possible around earnings releases, so we will discuss also support/buy zones.
Xiaomi Corp (1810 HK): Top Trades and Strategic Insights from HKEX Options Trading
- Over the past five trading days, Xiaomi Corp (1810 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.
- Bearish and Bullish strategies balance each other, with only 12% of trades expressing a neutral view, such as Iron Condors. Some strategies were traded in unusually large size.
- Diagonal Spreads account for over 25% of all strategies and can make for near self-financing strategies. An inverted volatility term structure, aka backwardation, supports calendar and diagonal spreads.
Xiaomi Corp (1810 HK): Volatility Insights and Analysis Identify Spread Opportunities
- Xiaomi’s (1810 HK) one-month implied volatility has decreased from recent peaks but remains above the 90th percentile, while realized volatility is exceptionally high, exceeding 100% (100th percentile).
- The options market exhibits an inverted term structure (backwardation) favoring calendar or diagonal spreads, with a slightly negatively sloped skew supporting put and call spreads.
- Open interest extends to March 2026, with balanced call and put interest across most expiries, except for March 2026, which is heavily call-dominated.
Pre-IPO Bama Tea – The Business Model, the Challenges and the Outlook
- The most significant issue in the domestic tea industry is product standardization. This makes it difficult for tea companies to expand their market share and achieve economies of scale.
- Bama’s revenue growth showed an upward trend, but the growth rate is declining. There’re already signs of growth stagnation. High selling and marketing expenses will put pressure on profit margin.
- Lancang and Tenfu Caymans (6868 HK) are comparable peers. Due to larger market share/revenue scale and higher profit margin in 24Q1-Q3, we think Bama’s valuation should be higher than peers.
Sinopec (386) Earnings: Volatility Setup and Post-Release Price Behavior
- With Sinopec down 8.47% since the last quarter, we take an in-depth look at price patterns, implied vol, and the earnings implied jump compared to historical outcomes.
- Implied vols stand out across a variety of metrics including relative valuation.
- Examining average absolute price moves across quarters, Q1 tends to have the second-largest average absolute move.
Bright Smart (1428 HK): Chairman’s Scheme, Or Cashing Out?
- Mid-Trading yesterday, broker Bright Smart Securities And (1428 HK) was suspended pursuant to the Takeovers Code. Shares closed up 9.3% before suspension.
- Bright Smart’s ops are tonking along nicely. It recently announced a (preliminary) 10% increase in FY25 profit (Mar Y/E). The share price is up 97% yoy.
- Bright Smart’s Chairman, Yip Peter Mow Lun, holds 50.54%. Unusual timing to take the company private. Alternatively Yip, at 73-years of age, may be cashing in his chips.
ICBC (1398.HK) Earnings: Volatility Pricing, Post-Release Trade Setup & Tactical Hedge
- An in-depth look at price patterns, implied vol, and the earnings implied jump compared to historical outcomes.
- Based on ICBC’s historical post-earnings behavior and current implied vol levels, we recommend a hedge into the event.
- We explore post-earnings moves that show a potentially exploitable pattern.
Liuliu Orchard Group Co Ltd Pre-IPO Tearsheet
- Liuliu Orchard Group (LLO HK) (LOGCL) is planning to raise about US$100m in its upcoming Hong Kong IPO. The lead bookrunners for the deal are Citic and Guoyuan.
- The company was established in 1999. It is one of the leading producers of plum-based products in China’s fruit snacks category.
- As per F&S Report, LOGCL ranked first in China’s fruit snacks industry by retail sales value, with a market share of 4.9% in 2024.
Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – April 2025
- We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
- Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Philippine Stock Exchange (PSE PM), and Ginebra San Miguel (GSMI PM)
- We provide updates on Ginebra San Miguel (GSMI PM), The Keepers Holdings (KEEPR PM), Philippine Stock Exchange (PSE PM), Shakey’s Pizza (PIZZA PM), and Uchi Technologies (UCHI MK).
💡 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
