Daily Brief China: Guangdong Tianyu Semiconductor, Kingsoft Corp, Shanghai Shenzhen CSI 300 Index, Ping An Bank Co Ltd A, InxMed, China Yuhua Education, DiDi Global, Health And Happiness (H&H) and more

• Guangdong Tianyu Semiconductor (2223725D CH) is looking to raise up to US$224m in its upcoming Hong Kong IPO.
• It was founded in 2009, and is the largest domestic PRC SiC epitaxal wafer manufacturer both in terms of revenue and sales volume, as of 2024
• In this note, we provide updates on the firm’s past performance and valuation.

• China announced game approval for the November batch. The number of games approved remained at a higher level than 2023.
• The pace of China game approval appears to have accelerated to above the pre-tightening level.
• Of the companies that we are monitoring, while market leader Tencent and Netease didn’t obtained approval, Kingsoft and Bilibili obtained approval for one game each.

• On November 28th China Securities Index Co (CSI) announced the changes to the CSI 300 Index (SHSZ300 INDEX): 11 companies added and 11 deleted.
• The complete list of additions and deletions is available here (or see the attachment at the end of this insight for your convenience).
• We analyze our probabilistic models to forecast short-term market directions for the CSI 300 Index, as passive flows between here and December 12 may affect the index volatility and trend.

• Our GEM bank top picks for 1H 2026 are Banrisul, Bradesco and Ping An Bank for very attractive fundamental valuations with healthy dividends and earnings growth potential
• We also have buy recommendations on China Construction Bank (CCB) and Hana Financial, both of which are deep value plays relative to their returns, combined with sound balance sheets
• Kotak Mahindra bank is our only sell recommendation for its premium valuation, even among Indian banks, relative to its underwhelming ROE prospects

• InxMed is a clinical-stage biotechnology company with a strategic focus on overcoming cancer drug resistance and metastasis, primarily targeting the Chinese market.
• The company’s lead asset, Ifebemtinib (a FAK inhibitor), is being developed as a cornerstone of combination therapies across a range of solid tumors, a strategy that could unlock significant value where monotherapies have previously failed.
• While the pipeline holds promise, InxMed faces substantial risks typical of a clinical-stage biotech, including the inherent uncertainty of clinical trial outcomes, a competitive landscape for its targeted pathways (FAK and FAP), and the financial risks associated with drug development.

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• China Yuhua Education is a prominent private education provider in China, focusing on higher education and secondary education. The company has faced significant headwinds due to regulatory changes in the Chinese education sector but has shown resilience by adapting its business model.
• The company’s financial performance has been impacted by the deconsolidation of its K-9 assets in 2021, a direct consequence of the new regulations. However, recent results indicate a recovery, with revenue and adjusted net profit showing growth.
• The future outlook for China Yuhua Education is cautiously optimistic. While regulatory risks remain a significant concern, the company’s focus on higher and vocational education, which are more supported by government policies, could provide a pathway for sustainable growth.

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• Didi’s China business showed solid Y/Y growth, but International worsened dramatically
• Spending on Sales & Marketing (including incentives) was up CNY 1.7 bn Y/Y, or +55%
• Should it seek an IPO soon, Didi will have to show a path to profits for International segment

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Health and Happiness (H&H)
• China’s industrial profits fell 5.5% y-o-y in October, reversing from the sharp double-digit growth in September and August. Industrial profits grew 1.9% in 10M/25, decelerating from 3.2% in 9M.
• Profits from the high-tech sector remained robust at 8.0% in 10M, with profits from smart unmanned aircraft and smart in-vehicle equipment registering triple-digit growth.