In today’s briefing:
- A/H Premium Tracker (To 11 July 2025): “Beautiful Skew” Continues – BIG AH Premia Compression
- Zijin Mining: Strong H1 Guidance, FY25 Upgrades Likely, Gold Listing Adds Catalyst
- ECM Weekly (14 July 2025) – Meituan, SBI, Kokusai, NTT, Daehan, Anthem, SICC, CIG, FWD
- Global Markets Tactical Outlook: Week of July 14 – July 19
- Orient Overseas Intl (316 HK): Something Seems Not Quite Right!
- HK Connect SOUTHBOUND Flows (To 11 July 2025); Volumes Up, Net Buying Up, Non-Bank Financials Hot
- Baige Online Digital Technology – The Business Model and the Risks Behind
A/H Premium Tracker (To 11 July 2025): “Beautiful Skew” Continues – BIG AH Premia Compression
- AH premia flat among liquid names but “beautiful skew” of wide premia converging more than narrow premia continues bigly. It has paid well to be long wide H discounts.
- Weeks ago I said, “It has paid to be long the H on those H/A pairs with the biggest H discounts. I would continue to ride that trend.” Ride on.
- 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.
Zijin Mining: Strong H1 Guidance, FY25 Upgrades Likely, Gold Listing Adds Catalyst
- Zijin has guided for a 54% YoY rise in H1 FY2025 net profit to RMB 23.2 billion, driven by strong copper and gold pricing and volume gains.
- Based on this, we see scope to revise our FY2025 PAT and EPS estimates up by 16–19%, and EBITDA by 35–50%.
- The proposed listing of Zijin Gold International in Hong Kong could unlock value from its high-margin overseas gold assets and enhance investor visibility.
ECM Weekly (14 July 2025) – Meituan, SBI, Kokusai, NTT, Daehan, Anthem, SICC, CIG, FWD
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, the previous week was another busy week for listings, with mixed results.
- On the placements front, we looked at the possible placements for Meituan (3690 HK) and State Bank Of India (SBIN IN).
Global Markets Tactical Outlook: Week of July 14 – July 19
- A quick synoptic look at the tactical models for some key indices, stocks, commodities and bonds we cover, for the week July 14 – July 19.
- The most noticeable highlights are: all US markets and stocks we cover sold off last week, apart from Amazon.com (AMZN US) , Alphabet (GOOG US) and NVIDIA Corp (NVDA US)
- In Asia, BYD (1211 HK) is very oversold, and Fast Retailing (9983 JP) is also oversold. Gold (GOLD COMDTY) and Crude Oil (CL1 COM COMDTY) start to be overbought.
Orient Overseas Intl (316 HK): Something Seems Not Quite Right!
- Orient Overseas International (316 HK)‘s 25.9% YTD surge in share price is difficult to justify, as the load factor started to contract and the average freight rate declined.
- Transpacific and Asia-Europe freight rates plunged by 14.7% and 17.3% in 2Q25, respectively. The transpacific volume also registered the first YoY decline in the quarter.
- Its P/B of 0.85x is 1SD above average, and is way higher than FY21-22. However, the FY25F earnings of US$1.5bn are incomparable to US$7-10bn in FY21-22.
HK Connect SOUTHBOUND Flows (To 11 July 2025); Volumes Up, Net Buying Up, Non-Bank Financials Hot
- Gross SOUTHBOUND volumes up to US$17+bn a day this past 5-day week. Net buying strong at +US$700mm a day.
- Among the top buys as a percentage of volume, FINANCIALS stood out, dramatically. Again. Neither INFO TECH nor Tencent were the big sells this week.
- 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.
Baige Online Digital Technology – The Business Model and the Risks Behind
- Baige’s business model is B2B2C, connecting insurance companies/channel partners and C-end users.By mining long-tail needs of end-customers and customizing small/refined/fragmented insurance products according to personalized needs, Baige significantly boost sales.
- High customer acquisition costs (referral fees, commissions/service fees) are the pain points, putting pressure on profit margin. The trend of “disintermediation” in the industry is becoming increasingly evident.
- The post-money valuation after Series C financing reached about RMB2 billion. Due to smaller revenue scale and lower profitability, we think valuation of Baige should be lower than peers.
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