Daily Brief China: BYD, 52TOYS Development, Oriental Watch, Seres Group , Sany Heavy Industry, China Mobile, Softcare, Meituan, FJD Inc, Nongfu Spring and more

• It is no surprise that BYD’s revenue decreased YoY in 3Q25 according to our previous sales volume note.
• The quarter-over-quarter margin improvement is not about seasonality, but about a sign of the margin recovery in 2026.
• We believe the stock has a downside of 25% for 2026.

• 52TOYS Development, a Beijing-based multi-genre IP toy company, is seeking Hong Kong IPO that would raise up to $200M.
• Founded in 2012 by Mr. Chen and Mr. Huang, 52TOYS positions itself as a toymaker with a strong emphasis on collectible mecha and sci-fi aesthetics.
• 52TOYS has made a big push online and in overseas markets. I believe the company has primary growth drivers such as international expansion and new licensed and proprietary IP products.

• Alternative data suggests a turn in the luxury wristwatch market. But most likely, this turn is due to US tariffs on Swiss watch imports, causing US buyers to panic buy. 
• Oriental Watch continues to be undervalued at just 8.3x P/E and a dividend yield of 12%
• However, the Chinese watch market remains weak and there’s no clear sign of a turnaround yet

• Our base case valuation of Seres Group is target price of 189.9 CNY which represents a 17% upside from current levels over a 6-12 month period.
• Our target P/S multiple of 1.4x is 50% premium to the average valuation multiple of the comps in 2026. 
• We used a premium valuation multiple for Seres Group due the company’s higher sales growth, EBITDA margins, and ROE.

• Sany Heavy Industry (6031 HK) has rallied 15.3% after its IPO, and 3Q25 earnings are in a consistent trend. We do not expect a significant change in earnings forecasts. 
• The mere 0.1% discount to its A-share looks rich. The FY26F PER of 17.7x is also significantly higher than its peers, reflecting most of its strengths.
• Even if it re-rates to a similar premium as Jiangsu Hengrui Pharmaceuticals (1276 HK), the upside is only 5.8%. The risks clearly outweigh the return.

• HKEX Expands Weekly Options: Five new single-stock weeklies debut on 10 November, broadening Hong Kong’s fast-growing short-dated options market.
• Why It Matters: Weeklies let traders and investors hedge or speculate around key events with precision, lower premiums, and higher gamma exposure.
• Momentum: Trading volumes in existing weeklies have surged—up nearly fourfold since launch—underscoring rising investor adoption and liquidity.

• Softcare (SOFT HK)  is looking to raise around US$300m in its upcoming Hong Kong IPO.
• It is an international hygiene product corporation engaged in the development, manufacturing and sales of baby and feminine hygiene products.
• We have looked at the company’s past performance in our previous note. In this note, we will undertake a PHIP update.

• Meituan is the definitive market leader in China’s online-to-offline (O2O) services industry, with a dominant position in food delivery, holding an estimated 60-70% market share. The company’s integrated platform, encompassing a wide array of services from in-store dining to travel bookings, creates a powerful ‘super-app’ ecosystem that fosters high user engagement and retention.
• Intensifying competition from rivals such as Alibaba’s Ele.me and JD.com, coupled with a strategic focus on lower-priced offerings to capture market share in a slowing economy, is expected to pressure margins in the near term. Management has guided for a significant decline in operating profit for the core local commerce segment in the upcoming quarters due to increased subsidies and investments.
• Despite near-term headwinds, Meituan‘s long-term outlook is supported by its strategic investments in technology, such as AI-driven logistics and drone delivery, and its expansion into new initiatives and international markets. The company’s ability to leverage its vast user base and data analytics provides a strong foundation for future growth and profitability.

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• FJD Inc (FJD HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by MS and CICC.
• FJD’s mission is to empower and elevate frontline workers in labor-intensive scenarios with accessible, intelligent robotics solutions.
• The company achieves this by building digital models for the real world and driving autonomous transition in essential workflows across multiple core industries.

• Nongfu Spring is the dominant market leader in China’s packaged drinking water and broader beverage industry, demonstrating consistent growth and strong profitability.
• The company’s strategic focus on high-quality natural water sources and a diversified product portfolio, including successful tea beverages, positions it well for future growth in a health-conscious consumer market.
• Despite facing intense competition and reputational challenges, Nongfu Spring’s robust financial performance, expanding margins, and solid brand recognition underscore its resilient market position.

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