In today’s briefing:
- MV Global Uranium & Nuclear Energy/Infra Index Rebalance: Double Inclusion for CGN Mining
- MV Global Junior Gold Miners Index Rebalance: Stocks at Their Highs
- Pop Mart (9992 HK): Beyond Blind Boxes -Jewellery Debut. Stock Up 200% YTD. Is It Still a Buy?
- Chow Tai Fook(1929 HK) – Firing on All Cylinders, Strong Outlook For FY26
- HKEX (388 HK) Options: Unpacking the Top Trades of the Week
- CaoCao IPO: The Bear Case
- Shanghai Junshi Bioscience (1877 HK): Placement Good, A Long Term Bet for Sure
- Pre-IPO Bayzed Health Group (PHIP Updates) – Some Points Worth the Attention
MV Global Uranium & Nuclear Energy/Infra Index Rebalance: Double Inclusion for CGN Mining
- There is 1 add/delete for each of the MVIS Global Uranium & Nuclear Energy Index and the MarketVector Global Uranium and Nuclear Energy Infrastructure Index.
- Cgn Mining (1164 HK) is an add to both indices. Endesa SA is a delete from the Uranium&Nuclear Energy Index, Encore Energy is a delete from the Uranium&Nuclear Energy Infrastructure Index.
- The net round-trip trade across both indices is US$560m with capping changes resulting in much bigger flow for the MVIS Global Uranium & Nuclear Energy Index.
MV Global Junior Gold Miners Index Rebalance: Stocks at Their Highs
- There are no constituent changes for the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in June but there are plenty of float and capping changes.
- Estimated one-way turnover is 4.1% resulting in a round-trip trade of US$528m. There are 5 stocks with over 1x ADV to trade from passive trackers.
- The sell flows in Evolution Mining (EVN AU) will partially offset the buying from the passive S&P/ASX 50 Index trackers.
Pop Mart (9992 HK): Beyond Blind Boxes -Jewellery Debut. Stock Up 200% YTD. Is It Still a Buy?
- Pop Mart International Group (9992 HK) opened its first dedicated jewellery concept store, POPOP, in Shanghai last Friday, featuring accessories based on its best-selling characters like Labubu, Molly, and Skullpanda.
- The jewellery line represents a natural, high-return extension of Pop Mart’s brand. If scaled successfully, it could support overall revenue growth, enhance group margins, and contribute to higher returns.
- Expect high margin, high return casual jewellery business to support growth and uplift margins going forward and lead to analyst upgrades to future revenues/earnings.
Chow Tai Fook(1929 HK) – Firing on All Cylinders, Strong Outlook For FY26
- Resilient FY25 Margins: Despite a 17.5% revenue drop, Chow Tai Fook Jewellery (1929 HK) expanded operating margins by 400bps through cost control and premium product mix.
- Brand-Led Recovery in FY26: Signature launches, digital sales, and store optimization to drive Same Store Sales Growth (SSSG) recovery and sustain high operating leverage.
- Valuation Supported by Fundamentals: Valuation at 20.8x P/E (TTM) valuation justified by strong ROE (>20%), margin leadership, and stable dividend payout (~88%) versus regional jewellery peers.
HKEX (388 HK) Options: Unpacking the Top Trades of the Week
- Be inspired by sophisticated, live, multi-leg options strategies on HKEX (388 HK), executed over the period from 9 to 13 June.
- Highlights: Discover a range of noteworthy strategies, for example a self-financing Diagonal Put Spread using weekly options, or a Diagonal Call Spread generating 3.9% upfront yield.
- Why read: This breakdown of complex option strategies sheds light on market sentiment and positioning. Detailed examples provide actionable insights that could inspire similar strategies,
CaoCao IPO: The Bear Case
- CaoCao Inc (1646553D CH) is the second-largest ride-hailing player in China. It has filed its PHIP to raise US$200-300 million.
- In CaoCao IPO: The Bull Case, I highlighted the key elements of the bull case. In this note, I outline the bear case.
- The bear case rests on low net take rates, unfavourable trends of key cost items, expected losses in the current year and a stretched balance sheet.
Shanghai Junshi Bioscience (1877 HK): Placement Good, A Long Term Bet for Sure
- Shanghai Junshi Biosciences (1877 HK) is placing 41M H shares for subscription at HK$25.35 per H Share.
- Shanghai Junshi intends to use 70% of the net proceeds from the placement for innovative drug development and balance 30% for general corporate purposes such as replenishment of working capital.
- Early green shoots in the form of lower R&D expenses and narrowing losses. Junshi offers for a good long-term bet as the company turning profitable will take some time.
Pre-IPO Bayzed Health Group (PHIP Updates) – Some Points Worth the Attention
- The positioning of Bayzed is just “a supplement to public hospitals system”, with limited scale and competitiveness, which is a point that investors may need to be aware of.
- A big problem in the operation of Bayzed is the loss status/weak profitability. At current gross margin level, it would be difficult for Bayzed to deliver good returns for investors.
- Valuation of Bayzed should be lower than Inkon Life Technology and Hygeia. The Pre-IPO valuation is not cheap, and the valuation upside potential may be limited considering weak profitability.
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