In today’s briefing:
- Joy City Property (207 HK): Privatisation Through a Low-Ball Share Buyback
- Alibaba: Sentiment Rebounds Among GEM Funds
- GigaDevice A/H Listing -Strong Long Term Record but Exposed to the Memory Cycle
- [IO Technicals 2025/31] Muted Policy Support and Soft Demand Weigh on IO Prices
- Pre-IPO Sichuan Neautus Traditional Chinese Medicine – The Outlook Is Not Optimistic
Joy City Property (207 HK): Privatisation Through a Low-Ball Share Buyback
- Joy City Property (207 HK) announced a share buyback by way of a scheme at HK$0.62, a 67.6% premium to the last close of HK$0.37 (17 July). The offer is final.
- The buyback is effectively a privatisation by the controlling shareholder, COFCO, at a significant discount to book value. The offer implies a P/B of 0.30x.
- While there are mitigating factors which lower the vote risk, there are several similarities to the failed Soundwill scheme. Therefore, the vote comes with non-neligible risk.
Alibaba: Sentiment Rebounds Among GEM Funds
- Ownership in Alibaba has rebounded to 76.4% of EM funds, nearing its 2020 peak and making it the second most widely held stock among GEM funds, behind only TSMC.
- The past six months have seen strong momentum, with 29 new fund positions marking a 7.7% rise in participation— the third highest among all EM stocks.
- Alibaba attracts broad cross-style interest, with Value funds leading on allocation size, but Growth and GARP strategies among the top holders, reflecting high and diverse conviction.
GigaDevice A/H Listing -Strong Long Term Record but Exposed to the Memory Cycle
- GigaDevice Semiconductor (603986 CH) (GD), an IC design house, aims to raise around US$1bn in its H-share listing.
- GD is a leading specialty memory chip and MCU company in mainland China.
- In this note, we look at its past performance and other deal dynamics that might impact the listing.
[IO Technicals 2025/31] Muted Policy Support and Soft Demand Weigh on IO Prices
- The Politburo signalled only mild policy easing on July 30, disappointing investors hoping for stronger measures to address China’s property slump.
- China’s July NBS Manufacturing PMI fell, highlighting fading pre-tariff export momentum and persistently weak domestic demand conditions.
- Prices are below the 9‑day moving average, and a bearish MACD crossover suggests a potential short‑term pullback.
Pre-IPO Sichuan Neautus Traditional Chinese Medicine – The Outlook Is Not Optimistic
- Neautus is facing performance headwinds. Revenue growth rate is declining and profit margin is in downward trend. Net profit growth is lower than the revenue growth, indicating the weak profitability
- VBP, increasing competition and raw materials cost are the challenges. Because of financial fraud, Neautus once failed its A-share IPO. So, there is corporate governance issue in the Company.
- We’re conservative about the outlook of Neautus. It is already good for valuation to reach the industry average.Our forecast in 2025 is revenue to reach RMB1.4-1.5 billion (up 12-15% YoY).
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