In today’s briefing:
- CXMT Corp (688825 CH): Nothing Left to Sell, Everything Left to Re-Rate
- Monthly Chinese Tourism Tracker | May, June, Q2 All Show A Clear Softening of Chinese Travel Demand
- CATL (300750 CH / 3750 HK): H1-26 Above Consensus; Record Buyback Reverses the Dilution Trade
- Pico Far East (752 HK): Synthetic Expert Call Transcript (25 Jul 2026)
- Weekly Deals Digest (26 Jul) – Innolight, Con Aero, GJTAI, Z Fin, Shinko Shoji, OFX, Ajinomoto
- Last Week In Event SPACE: Mitsui Matsushima, Prosus/Tencent/Naspers, Legend/Lenovo
CXMT Corp (688825 CH): Nothing Left to Sell, Everything Left to Re-Rate
- Capacity is booked through end-2027, with Dell, HP, Lenovo and Apple prioritised; FY25 utilisation already 95.73% — this is contracted revenue, not a forecast.
- The industry stopped behaving like a commodity: Micron and SK Hynix now take prepayments and lock volume, pushing PC and handset makers toward CXMT, the largest uncontracted supplier left.
- BULLISH, TP Rmb11.65 (+34.5%): 6.5x FY26E EPS, a deliberate discount to peers that prices zero HBM optionality and concedes the scarcity window closes around 2028.
Monthly Chinese Tourism Tracker | May, June, Q2 All Show A Clear Softening of Chinese Travel Demand
- In May and June, domestic and outbound Chinese travel demand both softened
- Given higher fuel prices and weak consumer sentiment, this shouldn’t be a surprise
- For Trip.com, we believe tepid Chinese demand could delay recovery in momentum
CATL (300750 CH / 3750 HK): H1-26 Above Consensus; Record Buyback Reverses the Dilution Trade
- H1-26 revenue Rmb276.9bn (+54.8%), net profit Rmb43.3bn (+42.0%). Derived 2Q net profit of Rmb22.5bn beat LSEG consensus by 5%. Storage +87.5%; utilisation 94.9%.
- Board approved a Rmb20-40bn buyback for cancellation — an A-share record — capped at Rmb573, plus a Rmb6.5bn interim dividend. Returns now exceed April’s placement.
- BULLISH, FV Rmb500 on 24x FY26E EPS of Rmb20.9. Prefer A over H: the buyback covers A-shares only.
Pico Far East (752 HK): Synthetic Expert Call Transcript (25 Jul 2026)
- High Receivables Impairment & Weak Cash Quality: Despite strong statutory net income of HK$431.6 million for the trailing twelve months, Pico Far East’s free cash flow stood at only HK$222 million. This massive gap is driven by working capital tied up in contract assets and delayed payments from state-owned enterprises (SOEs) in China, where Pico carries an aggressive HK$146.5 million allowance against its trade debtors.
- Squeezed EV Economics vs. Volatile Middle East Margins: Automotive clients represent 25% of Pico’s mainland China revenue. Brutal local price wars have forced a shift toward restrictive contract structures, whereas expansion into the Middle East offers 5-10% higher gross margins but exposes the company to extreme cost volatility and labor spikes of up to 30% in markets like Riyadh.
- Capital Conservatism and Dilutive Governance: The company’s decision to maintain a massive HK$1.77 billion net cash position while proposing a 20% share issuance mandate reflects a highly conservative, family-controlled governance structure that prioritizes balance sheet safety over aggressive share buybacks or high-return tech acquisitions.
Disclaimer: The following transcripts are synthetic, AI-generated on demand, and compiled exclusively from public data sources; no real-word experts were actually interviewed. This content is designed to highlight potential market mispricings, explore compelling lines of inquiry, and suggest strategic questions rather than present verified facts. All specific financial metrics and data points, including market shares, TAM, margins, and growth rates, are AI-estimated approximations. They may be inaccurate and must be independently verified.
Weekly Deals Digest (26 Jul) – Innolight, Con Aero, GJTAI, Z Fin, Shinko Shoji, OFX, Ajinomoto
- A weekly summary of key developments in ECM and Event-Driven names tracked by us in Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India, and Chinese ADRs.
- ECM developments: Zhongji InnoLight (3308 HK), Jio Platforms Ltd (1797135D IN) and Manipal Health Enterprises Ltd (1217834D IN) listings.
- Event-Driven developments: Continental Aerospace Technologies (232 HK), Guotai Junan International (1788 HK), Z Fin (1168 HK), Shinko Shoji (8141 JP), OFX Group (OFX AU), Ajinomoto Malaysia (AJI MK).
Last Week In Event SPACE: Mitsui Matsushima, Prosus/Tencent/Naspers, Legend/Lenovo
- EQT/DG lifted their Offer Price for Kakaku.com (2371 JP) to ¥3,450/share. This “obstructs” the Bain/LY deal, slightly, temporarily, but there are nuances within. Expect Bain/LY to come over the top.
- Prosus NV (PRX NA) is cheap” vs. Tencent (700 HK). And Naspers (NPN SJ) “rich” to Prosus. Look to long Prosus here, short Tencent here. Or long Prosus, short Naspers
- Be comfortable medium-long-term with Mitsui Matsushima (1518 JP)‘s super-cheap asset. And they have niche businesses in semiconductor/tech to spruce things up if people decide they want to run with it.
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