In today’s briefing:
- China A50 ETFs Rebalance Preview: Three Changes in March
- FXI Rebalance Preview: GTJA, ZTE In; CTG, China Coal Out
- Jiangsu Hengrui Pharma A/H Listing – Innovation and Overseas Expansion Driving Earnings Rebound
- Guming Holdings (1364 HK): Potential Valuation Upside with Upcoming Mixue IPO
- CATL A/H Listing – IPO Filing Updates
- EQD | Volatile Roads: Unveiling Risk in the Asian Auto Industry Through the Options Market
- Asia Real Estate Tracker (12-Feb-2025): LaSalle appoints APAC Co-Heads; Claire Tang moves to Rava.
- Pre-IPO Sunshine Lake Pharma – “Outdated” Pipeline Is Difficult to Obtain Decent Valuation
China A50 ETFs Rebalance Preview: Three Changes in March
- With just over a week left to review cutoff, there could be three changes for the iShares A50 China (2823 HK)/ CSOP China A50 (HKD) (2822 HK) ETFs in March.
- Guotai Junan Securities, Cambricon Technologies and SAIC Motor could replace CGN Power, Luzhou Laojiao and Inner Mongolia Yili Industrial Group.
- Guotai Junan Securities (2611 HK) is expected to be added to the iShares China Large-Cap (FXI) (FXI US) in March, so there should be inflows for the A-shares and H-shares.
FXI Rebalance Preview: GTJA, ZTE In; CTG, China Coal Out
- Nearing the end of the review period, we expect two changes for the iShares China Large-Cap (FXI) (FXI US) ETF in March.
- Guotai Junan Securities (2611 HK) is a high probability add while China Tourism Group Duty Free (1880 HK) is a high probability delete.
- ZTE Corp H (763 HK) is a potential inclusion currently and could replace China Coal Energy Co H (1898 HK) as long as it stays in inclusion zone.
Jiangsu Hengrui Pharma A/H Listing – Innovation and Overseas Expansion Driving Earnings Rebound
- Jiangsu Hengrui Medicine (600276 CH) a China-based pharmaceutical company, aims to raise around US$2bn in its H-share listing.
- JHP has been ranked as one of the global Top 50 pharmaceutical companies by Pharm Exec for six consecutive years since 2019.
- In this note, we look at its past performance and other deal dynamics that might impact the listing.
Guming Holdings (1364 HK): Potential Valuation Upside with Upcoming Mixue IPO
- Guming Holdings (1364 HK) ‘s shares closed 7% below issue price by end of yesterday’s trading.
- Institutional investors may be cautious, with many likely waiting for the upcoming IPO of Mixue Group (MIX HK), widely viewed as a more attractive and bigger opportunity in tea space.
- The upcoming Mixue IPO—aiming to raise about USD500 million—could spark broader investor interest in the sector and may boost valuations for Guming given its relative operational strengths.
CATL A/H Listing – IPO Filing Updates
- Contemporary Amperex Technology (CATL), one of the world’s largest battery solutions providers, aims to raise at least US$5bn in its H-share listing.
- CATL is the global leader in new energy vehicle battery solutions, in China and globally, as per SNE Research. Its A-shares have been listed since 2018.
- We have looked at the company’s past performance in our earlier notes. In this note, we talk about updates from its most recent filings.
EQD | Volatile Roads: Unveiling Risk in the Asian Auto Industry Through the Options Market
- The global auto industry faces significant tariff exposure. Option implied volatility offers a forward-looking assessment of risk.
- Chinese car makers started to increase in implied volatility more than the other markets at the beginning of February. They now show the highest risk.
- Recent implied volatility trends, asymmetric pricing (skew), and the term structure all seem to indicate that the Indian auto sector is the least exposed to international trade relations.
Asia Real Estate Tracker (12-Feb-2025): LaSalle appoints APAC Co-Heads; Claire Tang moves to Rava.
- LaSalle appoints Japan, Korea-based APAC Co-Heads as Tang heads to Rava, highlighting leadership changes within the company.
- Dash Living’s expansion in Japan to 19 locations through partnerships with BlackRock and Greystar reflects their growth strategy in the region.
- Swire Properties expecting a $103M loss as Pacific Place rents drop 16% due to markdowns, showcasing the impact of market changes on the company.
Pre-IPO Sunshine Lake Pharma – “Outdated” Pipeline Is Difficult to Obtain Decent Valuation
- Most revenue was contributed by Kewei, but kewei has been included in VBP.Together with increasing competition, the outlook is gloomy if Sunshine Lake Pharma continues to mainly rely on Kewei.
- There’s a significant gap in Sunshine Lake Pharma’s R&D progress/clinical data compared to the products of peers.The pipeline has been “disconnected” from the level of domestic biotech in recent years
- Sunshine Lake Pharma is inferior to other pharmaceutical companies in China.Even if CJ Pharma will be merged into Sunshine Lake Pharma, its market value should be lower than leading Biotech.
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