Daily Brief China: Dickson Concepts Intl, Huawei Technology, Unisound AI Technology, CaoCao, Tianqi Lithium, Cosco Shipping Energy Transportation Co. Ltd. (H), Viomi Technology Co Ltd, Cloudbreak Pharma, Nanjing Leads Biolabs and more

• Dickson Concepts Intl (113 HK)’s IFA opines that the controlling shareholder (Sir Poon) at HK$7.20 to be fair and reasonable. The vote is on 18 July. 
• A low AGM minority participation rate and quiet retail forums are helpful. However, the offer is below the net cash, and Dickson is cash generative on an underlying basis. 
• Dickson shares traits similar to those of the Goldlion and Soundwill deal breaks, which showed that low-ball offers can be blocked. This situation warrants a safety-first approach.

• Huawei is a major player in the AI chip industry, challenging Nvidia’s dominance
• The company’s European-style headquarters and aggressive sales tactics raise questions about its true nature
• Ren Zhengfei’s rare interview with People’s Daily highlights Huawei’s central role in China’s tech industry and diplomatic relations

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• Unisound AI Technology (9678 HK) is set to debut on the HKEX on 30 June 2025, at a market cap of ~$1.9bn, raising just ~$40m.
• Current shareholders and cornerstone investors are locked for twelve months keeping the free float below the minimum threshold of Global Indices until 30 June 2026.
• The security is forecasted to be added to Global indices at the August and September 2026 reviews following the 12-month lock-up expiry.

• Cao Cao is a ride hailing platform in China that raised US$236m in its Hong Kong IPO.
• As of 2024, it held a 5.4% market share as per Frost & Sullivan.
• We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

• After a blockbuster 2022 driven by lithium supercycle highs, Tianqi Lithium saw earnings swing into deep losses in 2024 amid price crashes.
• Looking ahead, it plans to scale lithium chemical capacity to over 140,000 tons/year, deepen integration in China and Southeast Asia, and selectively invest in technologies like DLE.
• While near-term profitability remains uncertain, current EV/EBITDA valuations below 5x suggest the downside may be priced in.

• Cosco Shipping Energy Transportation (1138 HK) will benefit from the oil supply worry as Israel and Iran are unlikely to reach a “real” peace agreement in the short term. 
• The worry, or actual, closure of Hormuz will raise VLCC rates by escalating reserve building, increasing demand for alternative routes, a higher risk premium, and panic chartering.
• After yesterday’s retreat, CSET trades on an undemanding 5.8x PER and 8.8% yield for FY25F. With over 12% ROE, its 0.73x P/B is cheap, below the average since 2023. 

• Back on the 29th April, Dickson Concepts Intl (113 HK)‘s Chairman, Dickson Poon (& relatives), holding (now) 65.77%, tabled an Offer by way of a Scheme for shares not held.
• The family offered HK$7.20/share (best & final). That compared to DC’s net cash (as at 31st Mar 2025) of HK$6.92/share. Plus financial assets comprise an additional ~HK$1.92/share.
• The Scheme Document’s now out, with a Court Meeting on the 18th July, and expected payment around the 12th August. The IFA (Platinum) says “fair & reasonable”. It is not.

• Viomi recently launched a new filtration system that produces mineral water-like output, which could be a differentiated product in the market, enabling Viomi to gain a share in an increasingly crowded filtration market.
• The company’s inability to file a timely 20-F with the SEC, combined with a recent change in auditors, will likely raise concerns among investors.
• Viomi’s strong balance sheet could enable it to pursue multiple growth strategies (expansion, new products, M&A) over the next 3-5 years.

• Since diagnosis/treatment rate of pterygium is low, it’s uncertain how many patients will be willing to pay high price for CBT-001. CBT-009 may lose first-mover advantage in front of Ryjunea.
• Due to pressure on cash flow, the development progress of CBT-006 and CBT-004 could be slower-than-expected. CBT-004’s sales may be squeezed due to the off-label use of anti VEGF drugs. 
• Valuation could be lower than peers considering that CLOUDBREAK has out-licensed commercialization rights of core product and has to face fierce competition and uncertain market demand after the product launch.

• Leads Biolabs, a China-based clinical-stage biotech, is looking to raise at least USD 100 million via a Hong Kong listing. The joint book runners are MS and CITIC.
• In our previous insight, we looked at the company’s core products and its management team, as well as investor backing.
• In this insight, we look at the updates of the prospectus spanning six months’ time. We have also read through from the competing products’ disclosures.