In today’s briefing:
- CICC (3908 HK) & China Galaxy (6881 HK): The Next Mega Brokerage Merger
- Tencent (700 HK): Top Trades: Strategies That Stand Out
- Tencent – 27 Feb Options Expiry: Potentially Volatile Session Due to 500 Strike Open Interest
- Vigonvita Life Sciences (旺山旺水) Pre-IPO Tearsheet
- Cambodia Wraps Up 2024 With A Flourish In Rubber – In Exports And At Home
- Pre-IPO Fujian Haixi Pharmaceuticals – The Concerns on the Pipeline and the Outlook
- Asia Real Estate Tracker (26-Feb-2025): Temasek’s Tikehau & Nikko AM JV in Asia.
CICC (3908 HK) & China Galaxy (6881 HK): The Next Mega Brokerage Merger
- Reportedly, China International Capital Corporation (3908 HK) and China Galaxy Securities (6881 HK), two of China’s leading state-backed brokerages, intend to merge via a share swap, forming China’s third-largest broker.
- This report/rumour arrives shortly after the successful merger of Guotai Junan Securities (2611 HK) (GJS) and Haitong Securities (6837 HK).
- As with GJS/Haitong, expect a Merger by Absorption structure, and that Galaxy (or CICC?) issue new A and H shares to the target. I’d be picking up CICC shares here.
Tencent (700 HK): Top Trades: Strategies That Stand Out
- This Insight analyses Tencent (700 HK)tailor-made option strategies traded over the last five trading days on the Hong Kong Exchange. Strategy highlights and volatility context are provided.
- These traders tailor structures to risk budgets and take calculated bets. Diagonal call spreads are popular, many self-financing (0% premium). This strategy can play the 18 March earnings date.
- Call spreads can indicate where bullish traders see limits to the upside. The most bullish trade suggests a peak of up to 710 HKD by the end of March.
Tencent – 27 Feb Options Expiry: Potentially Volatile Session Due to 500 Strike Open Interest
- Tencent (700 HK) stock options expiring on Thursday, February 27, show a concentration of approximately 40,000 open contracts at the 500 strike price, currently at the money.
- The open interest at the 500 strike may increase volatility and trading activity near expiry if the stock price hovers around 500, possibly leading to amplified intraday price swings.
- At the last monthly expiry in January the stock experienced intraday price swings of 2.5%.
Vigonvita Life Sciences (旺山旺水) Pre-IPO Tearsheet
- Vigonvita is looking to raise at least US$100 million via a Hong Kong listing.
- Vigonvita has commercialized COVID-19 anti-viral drug and is expanding the indication to RSV.
- The main contributor to the company’s develop is not holding a key management role.
Cambodia Wraps Up 2024 With A Flourish In Rubber – In Exports And At Home
- Rubber latex exports value goes up to US$666.25 million in 2024
- Average yearly rubber price marks a 47% YoY surge to US$1,971/mt
- Domestic tire firms consume 58,000 tons of rubber in 2024
Pre-IPO Fujian Haixi Pharmaceuticals – The Concerns on the Pipeline and the Outlook
- Sales of generic drugs are the largest performance contributor. However, due to VBP and the price reduction, Haixi’s generic drug business may shrink and is hard to drive future growth.
- Haixi’s valuation outlook would be mainly based on innovative drug pipeline. The primary goal is to address the issue of druggability of C019199. Haixi needs to provide convincing clinical data.
- Valuation of Haixi was about RMB1.948 billion in 2022. Considering the VBP, R&D failure risk of C019199, no licensing cooperation with MNCs, we think valuation could be lower than peers.
Asia Real Estate Tracker (26-Feb-2025): Temasek’s Tikehau & Nikko AM JV in Asia.
- Temasek-backed Tikehau partners with Nikko AM to launch new Asia investment management joint venture, expanding their presence in the region.
- STT GDC commences construction on a 16MW data center in Johor, demonstrating growth in data infrastructure in Malaysia.
- Digital Edge CEO Samuel Lee resigns, former legal officer assumes leadership of the data centre platform, amidst continued investment in Australian logistics market.
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