Daily Brief China: Hang Seng Bank, BeiGene , InnoScience Suzhou Technology, Yum China Holdings , Dickson Concepts Intl, Geely Auto, Shanghai Electric Group Company, Sirius Therapeutics, Guming Holdings and more

• Hang Seng Bank (11 HK) has announced an Offer from controlling parent (63.3551%), HSBC Holdings (5 HK), by way of a Scheme, in a HK$106bn (US$13.6bn) deal. 
• The Scheme Consideration is HK$155/share, a 30.3% premium to last close. The price is final. A “third interim dividend” will be added. Optically, the price is bang on.
• The long stop for conditions is the 30th September 2026. I think this transaction can be wrapped up in around five months. 

• Hang Seng Bank (11 HK) announced a scheme privatisation offer from HSBC Holdings (5 HK) at HK$155, a 30.3% premium to the undisturbed price.  
• Based on an estimated 2025 third dividend of HK$1.3 per share, the total consideration is HK$156.30 per share. The offer price is final.
• The offer is attractive compared to peer multiples and historical trading ranges. At the current price and for a late March payment, the gross/annualised spread is 2.9%/6.2%.

• The Hang Seng Index is the benchmark index for Hong Kong stocks. It follows a highly-subjective selection process which makes it difficult to predict index changes.
• In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes during the next review in December 2025.
• The index changes are expected to be confirmed on 21st November 2025.

• InnoScience Suzhou Technology (2577 HK) aims to raise around US$200m in its Hong Kong placement.
• Innoscience was only listed in Dec 2024 and it undertook another primary raising in July 2025, the lockup for which has yet to expire.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
• In this insight, we take a look at the potential index changes and capping flows for HSCEI index rebal event in December 2025.
• We expect three ADDs and three DELs for December 2025. We also estimate there to be US$303mn in one-way flows.

• Dickson Concepts trades at a 40% discount to net cash, with a market cap of HK$2bn and HK$3.3bn in cash.
• Founder Dickson Poon attempted privatization at HK$7.20/share, blocked by minority shareholders with 10.16% voting against.
• Business remains profitable despite downturn, with average net income of HK$200m and HK$1.4bn operating business value.

• Total deliveries grew by 35% YoY in Sep. 2025 and 43% YoY in 3Q25.
• BEV (Battery Electric Vehicle) deliveries were double of the same period last year.
• We believe the stock has at least 29% upside for next 12 months.

• With a 37.3% rally in Shanghai Electric Group Company (2727 HK)‘s share price in the last 5 trading days, it is poised for a correction, which is a long-term opportunity. 
• Key positive drivers include its Fanuc Robots earnings, progress in China’s nuclear fusion project, solid new order momentum, and speculation on asset acquisition.
• PER valuations are not cheap, but this is understandable due to the company’s transition. However, its 1.5x P/B multiple is not outrageously expensive relative to peers.

• Sirius Therapeutics, a China-based clinical-stage biopharma company, is looking to raise at least USD 100 million via a Hong Kong listing. GS, Haitong, and HSBC are the joint sponsors.
• In this note, we look at the company’s core products, SRSD107, and the key product SRSD216.
• We also look at the company’s pre-IPO investors and management team.

Key points (machine generated)

• Hong Kong-listed bubble tea companies are seen as classic fad stocks, presenting short-selling opportunities.
• Guming is highlighted as the preferred choice for short-selling due to its available borrow, while Nayuki serves as a cautionary example of decline.
• The author compares the bubble tea trend to previous restaurant fads, indicating a pattern of declining growth and increased competition.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.