In today’s briefing:
- Dongfeng (489 HK): Questioning The EV Listing Valuation
- Zijin Gold IPO: The Investment Case
- Pop Mart International – Valuation Using Peter Lynch’s PEGY Ratio
- A/H Premium Tracker (To 5 Sep 2025): AH Premia Contract Slightly, Beautiful Skew Better
- China TCM (570.HK) – Performance Is Expected to Rebound
- Laopu Gold (6181 HK): Technical Overhang Masks Strong Fundamentals – Gold Bulls Stay Put
- Mabgeek (麦济生物) Pre-IPO: Incremental Innovation in a Crowded Space
- Jiangsu Hengrui (1276 HK): Deals Galore; This Time for Hypertrophic Cardiomyopathy with Braveheart
- Chery Auto Pre-IPO – PHIP Updates – Some More Data, Some More Issues
- Oriental Watch (398 HK): HK Retail Environment Improving, China Stable
Dongfeng (489 HK): Questioning The EV Listing Valuation
- Back on the 22nd August, SOE-backed Dongfeng Motor (489 HK) announced a privatisation; together with a concurrent listing of its EV arm, VOYAH.
- The share price closed up 54% on the first day, ~15% adrift of the independently valued cash + scrip (into VOYAH) under the privatisation.
- Shares have pared back 5% since. VOYAH’s peer basket has fallen ~15% on average. The market is implying a price-to-trailing-sales of 1x for VOYAH versus the basket average of 1.9x.
Zijin Gold IPO: The Investment Case
- Zijin Gold (2579355D HK) is a global leading gold mining company and the overseas gold segment of Zijin Mining Group (601899 CH). It is seeking to raise US$3 billion.
- Zijin Gold hold interests in eight gold mines located in gold-rich regions across South America, Oceania, Central Asia and Africa.
- The investment case is bullish due to a diversified mine portfolio, strong growth, an attractive margin profile, robust cash generation, and modest leverage.
Pop Mart International – Valuation Using Peter Lynch’s PEGY Ratio
- In this insight, we discuss Pop Mart (9992 HK)’s valuation using Peter Lynch’s PEGY ratio.
- If Pop Mart misses current consensus estimates in 2026 and 2027 by 5%, this would result in PEGY ratio of 1.4x in 2026 which would make current valuations unattractive.
- WE EXPECT A HIGHER PROBABILITY OF POP MART’S VALUATION DECLINING BY 50% TO ABOUT US$25 BILLION, RATHER THAN INCREASING BY $75 BILLION FROM CURRENT LEVELS OVER THE NEXT 1-2 YEARS.
A/H Premium Tracker (To 5 Sep 2025): AH Premia Contract Slightly, Beautiful Skew Better
- “Beautiful Skew” came back slightly. Not huge, but OK. On average, liquid Hs outperformed their As by 0.8%.
- Last week’s short reco on Remegen (9995 HK) gained 8.3% on the week in Hs and the H underperformed the A by 7% Friday to Friday, 4.5% if VWAPed Monday.
- AH premia are likely still in a widening phase but weakness in speculative A-shares may dampen overall moves even if pairs are volatile. New reco this week.
China TCM (570.HK) – Performance Is Expected to Rebound
- China TCM is still in the adjustment period due to CTCMG VBP and goodwill impairment loss. However, the new management is pushing for internal reforms, which is a good phenomenon.
- Rebound will come after China TCM fully digest the impact of VBP. Looking forward, annual profit of RMB1bn is still expected. Reasonable valuation is RMB10-15bn, which is just conservative estimate.
- As CNPGC still commits to resolving the horizontal competition issue, investors have reignited interest in betting on privatization of China TCM and potential merger with Taiji, which is a catalyst.
Laopu Gold (6181 HK): Technical Overhang Masks Strong Fundamentals – Gold Bulls Stay Put
- Laopu Gold (6181 HK) is down nearly 20% since June’s lock-up expiry, despite strong 1H2025 results and subsequent analyst earnings upgrades.
- The stock trades at 22x FY26E, the low end of its YTD P/E range, with a PEG below 0.8x.
- China’s retail gold demand in 2Q2025 has shifted toward investment products – a trend that could support Laopu’s mostly investment-driven sales.
Mabgeek (麦济生物) Pre-IPO: Incremental Innovation in a Crowded Space
- Mabgeek, a China-based clinical-stage biotech company, is looking to raise at least USD 100 million via a Hong Kong listing. CICC is the sole sponsor.
- In this note, we look at the company’s core product, MG-K10.
- We also look at the company’s pre-IPO investors and management team.
Jiangsu Hengrui (1276 HK): Deals Galore; This Time for Hypertrophic Cardiomyopathy with Braveheart
- Jiangsu Hengrui Pharmaceuticals (1276 HK) entered into agreements with Braveheart Bio, to grant Braveheart an exclusive worldwide right of HRS-1893, a selective myosin inhibitor that treats hypertrophic cardiomyopathy.
- The only approved product available worldwide is Bristol Myer Squibb’s Camzyos (mavacamten) which was approved for marketing by FDA in April 2022 for obstructive hypertrophic cardiomyopathy.
- With Robust R&D and future potential drug candidates under its belt, Jiangsu Hengrui continues to remain an attractive bet, with a long-term perspective.
Chery Auto Pre-IPO – PHIP Updates – Some More Data, Some More Issues
- 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.
- In this note, we talk about the updates from its most recent filings.
Oriental Watch (398 HK): HK Retail Environment Improving, China Stable
- HK Department of Statistics data show the jewellery and watch retail market is improving, with June and July sales up 6.8% and 9.4% YoY, respectively.
- China is by far Oriental Watch (398 HK) ‘s most important market, accounting for 78% of sales. and sales are stable there so far.
- The company holds cash equal to 50% of market capitalization; we forecast a H1 FY26 dividend of $0.22/share (annualized ~12.5% yield) on an 8.5x P/E.
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