Daily Brief China: Contemporary Amperex Technology, Shenzhen Woke Technology, SHEIN Global Holdings, DiDi Global, Dah Sing Banking, CASH Financial Services, Zhaoke Ophthalmology and more

• On 10 August, Hang Seng Index launched a market consultation on potential changes to the Hang Seng TECH Index (HSTECH INDEX) methodology.
• If the proposals are approved, there will be 20 stocks added to the index in December creating a lot of flow and impact for the index constituents.
• One way turnover is estimated at 13.4% leading to a round-trip trade of HK$73.3bn (US$9.3bn), so this could be implemented in a phased manner.

• SHENZHEN WOKE TECHNOLOGY Co., LTD is a Southeast Asia-focused cross-border brand owner of 3C accessories, small appliances, and home furnishings, seeking listing to strengthen its supply chain.
• The company is No. 1 in Indonesia’s 3C accessories sector with 2.2% market share (2025), achieving RMB1,216.9 million revenue in 2025.
• Revenue was RMB1,216,944 (2025), with net assets of RMB10,396 (June 30, 2026), and net foreign exchange losses of RMB17.9 million (six months ended June 30, 2026).

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• For the last three years, SHEIN has consistently mis-handled political challenges in US, UK
• Failure to anticipate and plan for these challenges hurt sales growth and SHEIN’s valuation
• SHEIN’s stuggles speak directly to management’s ability to identify risks and quickly adapt

• Domestic Moat and Pricing Power Rebound: DiDi Global has secured a domestic market share of over 70%, proving that its direct-to-consumer traffic moat is highly resilient against aggregators like Amap. In Q2 2026, its China Mobility segment achieved an implied platform take-rate of 24.3%, driven by the structural wind-down of user subsidies to approximately 1% of GTV and driver-side incentive reductions.
• Latin American Expansion as a Strategic Hedge: While DiDi’s aggressive international push—such as the relaunch of 99Food and introduction of 99 Compras—continues to drag on group-level profitability with a wider H1 2026 net loss, this expansion serves as a critical strategic hedge. It forces Uber to defend its highly profitable Latin American strongholds, preventing it from redeploying capital back into Asian markets.
• Regulatory Clearance and Capital Return Stability: The final court approval of the $740 million US shareholder litigation settlement on June 16, 2026, removes a massive financial overhang. Backed by a robust cash reserve of $6.7 billion, the platform is fully funded to execute its $2 billion share buyback program and finance the commercialization of its “R2” Robotaxi model without diluting core operations.

• China segment firm in Q2, but its strength was overwhelmed by weakness in International
• International segment continued to bleed cash in Q2, mostly offsetting China gains
• As uneven performence continues, Didi may start to feel pressure to relist shares

• Mainland CRE De-risking and the HKCRE Impairment Hangover: Dah Sing has aggressively written down its Mainland China commercial real estate (CRE) book, but asset quality pressure has migrated to the Hong Kong commercial real estate (HKCRE) book. Following the June 2025 Moody’s rating downgrade to A3 (sparked by HKCRE impaired loans jumping to 8.98% in 2024), the bank reduced its outstanding HKCRE exposure by nearly 9% to HK$23.48 billion by end-2025. While write-offs have accelerated, significant “extend-and-pretend” rollover practices persist among bilateral club loans where collateral valuations remain stale due to illiquid transaction markets.
• NIM Defense via Aggressive Deposit Re-pricing: With 1-month HIBOR softening to approximately 2.5% in mid-2026, Dah Sing’s stellar FY2025 NIM of 2.41% faces compression. To defend margins, management is using tiered CASA pricing structures (e.g., “YOU i-Account”) and linking deposits to transactional business banking (“328 Business Banking Rewards”) to push expensive time deposits back into low-cost CASA, alongside interest rate swaps to lock in asset yields.
• The Capital Management Paradox: Despite boasting a fortress Common Equity Tier 1 (CET1) ratio of 18.8% at the end of FY2025, a share buyback program remains a structural non-starter. Because the parent company, Dah Sing Financial Holdings, holds a 74% stake, any buyback would severely compromise the stock’s already thin minority float. Special dividends are highly unlikely until macroeconomic uncertainties in Greater China resolve and the bank’s book value under its HK$3.16 billion Bank of Chongqing investment is fully validated.

• Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
• On the IPO front, there were a number of deals launched in India
• On the placement front, there were a few placement in India along with Dmg Mori Co Ltd (6141 JP) in Japan.

• SHEIN is facing various unfavorable challenges. The core factors that previously supported its high growth and valuation are collapsing, so its future prospects and valuation is no longer optimistic
• If the IPO valuation falls below US$25bn, it can be regarded as an opportunity with a certain margin of safety to participate; US$25-30bn falls within a neutral but cautious range
• A valuation above US$30bn implies greater risks than opportunities, considering the significant potential selling pressure from existing shareholders after lock-up period ends, and a P/E higher than Inditex is unreasonable.

• CASH Financial Services Group (CFSG) is a long-established Hong Kong financial institution with a comprehensive service offering, but it faces significant profitability challenges, having recorded net losses for the past three consecutive years.
• The company has demonstrated top-line growth, with a 3-year revenue CAGR of 10.09%, driven by its brokerage and wealth management services. However, this has not translated into bottom-line success, as indicated by persistent negative net margins and operating cash flows.
• Operating in the highly competitive Hong Kong financial services market, the company’s valuation appears moderate to expensive compared to peers, especially given its lack of profitability and high uncertainty regarding its future earnings potential.

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• Zhaoke Ophthalmology is at a pivotal transition from a pure R&D entity to a commercial-stage company, with three core assets for myopia, dry eye, and wAMD now under NDA review in China.
• The company is strategically positioned to capitalize on the rapidly growing Chinese ophthalmology market, which is driven by an aging population and increasing prevalence of eye conditions.
• Significant financial headwinds persist, characterized by substantial net losses and cash burn from heavy R&D investment, making future profitability contingent on successful and timely drug approvals and commercialization.

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