In today’s briefing:
- Uranium’s Shortfall And Nuclear Viability
- Zijin Gold International – Creating a Global Pure-Play Gold Champion
- Zijin Gold IPO Preview
- How to Play the Chinese Domestic Economic Drivers
- Chery Auto Pre-IPO – Peer Comparison
- Annto Supply Chain Pre-IPO Tearsheet
- MegaRobo Pre-IPO: Robotics Trend but Losses Widening
- Taste Gourmet H1 FY26: Earnings Preview, 5.8x PE with 30% of Mkt Cap in Cash, And a 9% Yield
- Reconova Technologies Pre-IPO: Fast Climb But Narrowing Base
- Pre-IPO 160 Health (PHIP Updates) – Some Points Worth the Attention
Uranium’s Shortfall And Nuclear Viability
- Back in April 2022, around six weeks after Russia’s invasion of Ukraine, I touched on the disruption to the uranium supply chain in Uranium: Fuelling Fears.
- The war spurred renewed interest in nuclear energy as a source of domestic power. Uranium prices have tripled since the invasion.
- A recent report from the World Nuclear Association forecast a significant step-up in demand for uranium for reactors, together with a material output drop from mines “as deposits are exhausted”.
Zijin Gold International – Creating a Global Pure-Play Gold Champion
- Zijin Mining is spinning off its seven overseas gold mines into Zijin Gold International, creating a dedicated, pure-play gold producer and positioning it for a Hong Kong IPO.
- The IPO proceeds will primarily fund mine upgrades and overseas M&A, with a portion earmarked to reinforce the balance sheet and corporate flexibility.
- With media reports suggesting a $3B+ IPO size and potential launch in September, coupled with gold rallying above $3,600/oz, investor appetite around the listing is notably heightened.
Zijin Gold IPO Preview
- Zijin Gold is getting ready to complete its IPO in Hong Kong this year. A successful IPO of Zijin Gold could fetch as high as US$3 billion in IPO proceeds.
- Zijin Gold had sales of US$3.0 billion (up 32.2% YoY) in 2024. Net margin increased from 14.2% in 2023 to 20.8% in 2024.
- There has been a sharp increase in the gap between gold AISC (all-in-sustaining cost) and gold price in the past year, leading to higher profit margins of gold producers globally.
How to Play the Chinese Domestic Economic Drivers
- China’s service sector is growing faster than manufacturing and construction, especially the business-to-business services, like IT Services, cloud services leasing and other business services.
- Among merchandize retail sectors, household and communication appliances, sports and recreational goods and gold and silver jewelry are growing the fastest. Some segments of food are enjoying healthy growth too.
- From a universe of 35 stocks in these sectors, we screen our favored 10, based on valuations more than justified by forecast earnings growth, high ROE and consensus Buy rating.
Chery Auto Pre-IPO – Peer Comparison
- Chery Automobile is looking to raise about US$1.5bn in its upcoming Hong Kong IPO.
- Chery Auto is a Chinese passenger vehicle company which designs, develops, manufactures and sells passenger vehicles, including internal combustion engine vehicles and new energy vehicles, both domestically and overseas.
- We have looked at the company’s past performance in our previous notes. In this note, we undertake a peer comparison.
Annto Supply Chain Pre-IPO Tearsheet
- Annto Logistics Supply Chain Technology (ANNTO HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by Morgan Stanley and CICC.
- It is the leading integrated supply chain logistics solutions provider in China.
- According to CIC, it achieved the fastest revenue CAGR between 2022 and 2024, and is amongst the top five comprehensive integrated supply chain logistics solutions providers in China
MegaRobo Pre-IPO: Robotics Trend but Losses Widening
- MegaRobo Technologies (MRT HK) is looking to raise at least US$300m in its upcoming Hong Kong IPO.
- It is the leading provider of autonomous agents in robotics applications in China, dedicated to improving productivity and driving innovation for businesses across both laboratory and manufacturing settings.
- In this note, we provide updates on the firm’s past performance.
Taste Gourmet H1 FY26: Earnings Preview, 5.8x PE with 30% of Mkt Cap in Cash, And a 9% Yield
- Taste Gourmet (8371 HK) will report its H1FY26 earnings in late November. We estimate a 15% revenue growth and 20-25% profit growth as the retail environment in HK improved slightly.
- The company increased its restaurant count in HK to around 65 restaurants (vs 56 last year), whereas the count in China remained static at six restaurants.
- The stock trades at a 5.8x PE, with a 9% dividend yield and 30% of the market capitalization in cash.
Reconova Technologies Pre-IPO: Fast Climb But Narrowing Base
- Reconova Technologies Co Ltd (1618370D CH) is looking to raise about US$100m in its upcoming Hong Kong IPO.
- Reconova provides a series of visual perception, visual cognition and visual reasoning intelligence products that are deeply applied across different scenarios, including civil aviation, commercial spaces, and freight logistics.
- In this note, we look at the company’s past performance.
Pre-IPO 160 Health (PHIP Updates) – Some Points Worth the Attention
- This “high input, low output” model has led 160 Health into a profit predicament when its revenue failed to grow in tandem.The turnaround from losses to profits is far away.
- 160 Health operates as a distributor, but VBP has shifted more procurement activities to direct transactions between hospitals and manufacturers, thereby reducing pricing flexibility for intermediaries such as 160 Health.
- Valuation of 160 Health should be lower than PAGD, JD Health, Alibaba health, who have turned losses into profits and established mature business foundation and model, but higher than ClouDr.
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