In today’s briefing:
- A/H Premium Tracker (To 6 June 2025): Narrow Premia Hs Worst Performers, BYD Relents
- Zhejiang Sanhua Intelligent Controls A/H Listing – PHIP Updates and Thoughts on A/H Premium
- HK Connect SOUTHBOUND Flows (To 6 June 2025); Volumes Up, Tech Down, ENERGY Bought Big
- COLI (688 HK): The Best Beta Play for China
- HKBN (1310 HK): CA Approval (All But) Done. NDRC & MoC Still Outstanding
- Weak Spending over China’s Dragon Boat Festival Holiday Period Suggests Tourists Remain Frugal
- Xtalpi US$860m IPO Lockup Expiry – Last of the Lockup Release with Nearly All Shares in CCASS Now
- Lucror Analytics – Morning Views Asia
- Pre-IPO Medtide (PHIP Updates) – Some Points Worth the Attention
- Lucror Analytics – Morning Views Asia
A/H Premium Tracker (To 6 June 2025): Narrow Premia Hs Worst Performers, BYD Relents
- AH spreads are slightly narrower. BANKS, INSURERS, BROKERS, INDUSTRIALS, PHARMA and UTILITIES see significant H-share outperformance vs their A pairs. TECH, CONSUMER, ENERGY mixed to worse.
- Ongoing skew on H-vs-A performance this week. Those trading AH Premium <20% saw H outperform sharply but those with H Premia contracted. Quiddity Portfolio alpha trending strongly.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.
Zhejiang Sanhua Intelligent Controls A/H Listing – PHIP Updates and Thoughts on A/H Premium
- Zhejiang Sanhua Intellignt Controls Co., Ltd. (002050 CH) (ZSIC), a manufacturer of refrigeration and air-conditioning control components, aims to raise around US$1bn in its H-share listing.
- ZSIC is a market leader in a number of products, with commanding market share both domestically and globally.
- We have looked at the company’s past performance in our previous note. In this note, we look at the PHIP updates and talk about the likely A/H premium.
HK Connect SOUTHBOUND Flows (To 6 June 2025); Volumes Up, Tech Down, ENERGY Bought Big
- Gross SOUTHBOUND volumes back above US$13bn a day this past 4-day week. Net buying back below US$500mm/day.
- Among the top buys as a percentage of volume, FINANCIALS, ENERGY, TELECOMS stand out, dramatically. Among top sells, it is INFO TECH again. 8 weeks in a row negative.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.
COLI (688 HK): The Best Beta Play for China
- COLI, being a SOE residential developer, has no bankruptcy risk. Under the current downturn, it is gaining market share and evolving into a stronger market leader
- It recently issued onshore bond at historical low coupon 1.80% (5-year) and 2.37% (10-year), which is even lower than China’s LPR. This is very significant
- Valuation is almost all time low, and downside is limited. We think it is the perfect beta play for China
HKBN (1310 HK): CA Approval (All But) Done. NDRC & MoC Still Outstanding
- Six months and counting; yet China Mobile (941 HK) continues to (slowly, but surely) chip away at various pre-conditions.
- In its monthly update, HKBN Ltd (1310 HK) said Mobile has proposed commitments to Hong Kong’s Communication Authority, and that the commitments are sufficient to effectively address the CA’s concerns.
- The CA is seeking industry feedback by the 13th June, but a favourable conclusion appears a lock. Elsewhere, no update on I-Squared’s proposal.
Weak Spending over China’s Dragon Boat Festival Holiday Period Suggests Tourists Remain Frugal
- China’s Ministry of Tourism & Culture reported mediocre holiday travel & spending activity
- Separately, Xinhua also reported underwhelming numbers from Dragon Boat Festival period
- Weak travel numbers may indicate Chinese consumers remain uneasy about near-term outlook
Xtalpi US$860m IPO Lockup Expiry – Last of the Lockup Release with Nearly All Shares in CCASS Now
- XtalPi Holdings (2228 HK) was listed in Hong Kong on 13th Jun 2024 after raising US$126m. Its one-year lockup will expire soon.
- QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
- In this note, we will talk about the lock-up dynamics and updates since our last note.
Lucror Analytics – Morning Views Asia
- US Treasury yields rose by 9-13 bps across the curve on Friday, as a stronger than projected nonfarm payrolls report drove down market expectations for Fed easing.
- The yield on the 2Y and 10Y UST increased 11 bps each to 4.04% and 4.51%, respectively.
- Equities rallied, as the robust jobs report allayed concerns over an imminent economic slowdown. The S&P 500 rose 1.0% to 6,000, while the Nasdaq jumped 1.2% to 19,530.
Pre-IPO Medtide (PHIP Updates) – Some Points Worth the Attention
- The sales growth of GLP-1s has entered a turning point. The actual market size of GLP-1s could be much lower-than-expected, which would affected the growth outlook of peptide CXOs.
- Medtide is not strong as expected in the peptide CXOs industry. There’s a “hidden problem” in terms of the market share ranking. We updated our forecast for the next three years.
- Considering geopolitical conflicts/intense competition, it’s difficult for Medtide to secure orders from industry leaders when the Company lacks competitiveness and are small in scale. Valuation should be lower than peers.
Lucror Analytics – Morning Views Asia
- Treasury yields climbed yesterday, led by the front and belly tenors, in line with similar price action in Europe after ECB President Christine Lagarde indicated that the central bank could pause rate cuts in the summer.
- The UST curve bear-flattened, with the yield on the 2Y UST rising 5 bps to 3.92% and the yield on the 10Y UST up 4 bps at 4.39%.
- US equities retreated, with the S&P 500 and Nasdaq declining 0.5% and 0.8%, respectively. US President Donald Trump and his Chinese counterpart Xi Jinping spoke on Thursday in a call that lasted c. 1.5 hours.
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