In today’s briefing:
- Midea Group (300 HK): Cornerstone Lock-Up Expiry and Upcoming Index Flows
- Chagee Holdings (CHA US) IPO: Valuation Insights
- CES China Semiconductor Chips Index Rebalance Preview: Multiple Adds for Some Stocks Increase Flow
- Anjoy Foods (安井) A/H: Needed by Families, But Besieged by Similar Industries and Health Concerns
- China Resources Beverage IPO Lockup- Cornerstones Coming Out of Lockup Ahead of the Large PE Release
- Quiddity HK Connect Northbound Tracker (Q1 2025 Vs 5 Previous Quarters)
- Duality Biotherapeutics (映恩生物) Trading Update
- Asia Real Estate Tracker (14-Apr-2025): Emperor Group’s 62-home project in Sai Ying Pun.
- Shanghai Fosun Pharmaceutical (2196 HK/600196 CH) – The Concerns Behind 2024 Results and the Outlook
Midea Group (300 HK): Cornerstone Lock-Up Expiry and Upcoming Index Flows
- Midea Group listed in September 2024 by selling 650.85m shares (including the overallotment option) and raising HK$35.7bn (US$4.6bn). A large part of the offering was allocated to cornerstone investors.
- Given the large company market cap and a free float that met the inclusion threshold, Midea Group (300 HK) was added to global indices via Fast Entry.
- The lock-up expiry on cornerstone investors will increase the float for the stock in the global indices and Hang Seng TECH Index (HSTECH INDEX) over the next two months.
Chagee Holdings (CHA US) IPO: Valuation Insights
- Chagee Holdings (CHA US), a leading premium tea drinks brand, is seeking to raise US$382-411 million through a Nasdaq IPO.
- We previously discussed the IPO in Chagee Holdings (CHA US) IPO: The Bull Case and Chagee Holdings (CHA US) IPO: The Bear Case.
- There are four cornerstone investors. Our valuation analysis suggests Chagee is attractively valued at the IPO price range. Therefore, we would participate in the IPO.
CES China Semiconductor Chips Index Rebalance Preview: Multiple Adds for Some Stocks Increase Flow
- There could be three changes for the CES China Semiconductor Chips Index at the close of trading on 13 June.
- Based on the assets tracking the index, passive trackers will need to trade between 0.1-0.4x ADV in the stocks.
- Bestechnic Shanghai (688608 CH) and Suzhou Kematek (301611 CH) will also have net inflows from passive trackers of other indices at the same time, adding to the flow.
Anjoy Foods (安井) A/H: Needed by Families, But Besieged by Similar Industries and Health Concerns
- A typical Chinese family needs quick-frozen foods and Anjoy is the largest producer.
- Fresh foods and well-done foods compete with quick frozen foods.
- Customers are concerned that producers may use too much preservative.
China Resources Beverage IPO Lockup- Cornerstones Coming Out of Lockup Ahead of the Large PE Release
- China Resources Beverage (2460 HK) raised around US$750m in its Hong Kong IPO in October 2024. The lockup on its cornerstone investors is set to expire soon.
- China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China and is one of the largest players in its categories.
- In this note, we will talk about the lockup dynamics and possible placement.
Quiddity HK Connect Northbound Tracker (Q1 2025 Vs 5 Previous Quarters)
- Last August, the mainland exchanges stopped providing data on Northbound positions and trading. They decided to show the data once a quarter.
- We decided to add a tool to the repertoire to show this past quarter’s flows per Northbound-eligible stock in a variety of ways.
- Click on a name and get the quarterly chart of the desired metric (position, Flow (shares), Flow as % of float or shares out, etc)
Duality Biotherapeutics (映恩生物) Trading Update
- Duality Biotherapeutics raised HKD 1,512m (USD 194m) from its global offering and will list on the Hong Kong Stock Exchange on Tuesday, April 14th.
- In our previous note, we looked at the company’s business lines of ADC products and analyzed its valuation.
- In this note, we provide an update for the IPO before trading debut.
Asia Real Estate Tracker (14-Apr-2025): Emperor Group’s 62-home project in Sai Ying Pun.
- Emperor Group is consolidating a site in Sai Ying Pun for a 62-home project in Hong Kong, promising a significant development.
- EQT has appointed a former KKR executive to take charge of their real estate operations in Japan, signaling a strategic move.
- A prominent mainland tycoon has sold a condo in The Peak for $66 million, marking a significant transaction in the luxury property market.
Shanghai Fosun Pharmaceutical (2196 HK/600196 CH) – The Concerns Behind 2024 Results and the Outlook
- 2024 results appear to be improving, but there’s no large-scale/sustainable new increment with high certainty in revenue end.Fosun Pharma would rely on reducing costs/selling loss-making projects to recover profit/cash flow.
- Financial performance in 2025 could be under pressure due to VBP. Fosun Pharm is also mired in a huge guarantee quagmire. International business expansion is facing fierce market competition.
- There could be a “valuation discount” for Fosun Pharma due to the concerns on its business model and undervaluation could be a norm. Our recommendation is to invest Henlius directly.
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