Daily Brief China: New World Development, The United Laboratories International Holdings Limited, Cosin Solar Technology Co, Innovent Biologics Inc, Sunny Optical Technology Group, Accelink Technologies Co A, FS.COM and more

• New World announced FY25 results, market reaction was initially negative, due to losses to shareholders.  Stock was down 10% post open but rebounded quickly to recover all the losses
• However, we think the market has neglected the other positives: strong contract sales, resilient IP earnings, improved total debt, stabilized gearing and lower borrow cost
• Market is forward-looking, we think NWD, as a leveraged play, will benefit the most in rate cut cycle.  At current valuation (0.12x PB) – we continue to stay bullish

• Despite its 96% price appreciation since our initiation, United Laboratories is still trading on a 8.7 FPE, and a 5.5 EV/EVITDA.
• A US FDA GLP-1 approval and a potential $ 1.8bn deal with Novo Nordisk demonstrates its successful diabetes and obesity strategy.
• With over 80 drugs in the pipeline to be delivered over the next five years, we believe that TUL is about to experience a very material increase in topline growth.

• Cosin Solar Technology Co (SUPCOZ CH) is looking to raise about US$100m in its upcoming Hong Kong IPO. The deal will be run by China Securities International.
• Cosin Solar Technology Co. (CST) is a Chinese company specializing in concentrated solar power (CSP) solutions, particularly molten salt tower systems. 
• The company’s main business lies in providing the collector system and other core sub-systems essential for constructing large-scale CSP plants.

• Innovent Biologics is a rapidly growing Chinese biopharmaceutical firm transitioning towards profitability, driven by a strong portfolio of commercialized drugs, notably the PD-1 inhibitor TYVYT® (sintilimab).
• The company possesses a deep and diversified pipeline spanning oncology, metabolic diseases, autoimmune disorders, and ophthalmology, positioning it for sustained long-term growth beyond its current core products.
• While exhibiting impressive revenue growth and improving financials, the company faces significant risks from intense domestic competition, government-led drug price negotiations (NRDL), and a high valuation that may already price in future success.

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• Sunny Optical is a global leader in optical components, holding substantial market shares in key segments like vehicle and handset lens sets, positioning it to capitalize on long-term growth in automotive autonomy and smartphone premiumization.
• The company exhibits a strong financial profile, characterized by a healthy net cash position, which provides resilience and flexibility. However, it has faced significant headwinds recently, with key financial metrics showing negative growth over the last three years.
• Key risks include high customer concentration with major tech companies, intense industry competition, and the rapid pace of technological change, which creates uncertainty and could impact future profitability.

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• Accelink is a leading Chinese optical components manufacturer, well-positioned to capitalize on secular growth trends in data centers, 5G, and AI-driven network upgrades. Strong revenue growth and market momentum are key positives.
• Significant concern arises from the company’s consistently negative cash flow generation. Despite a strong top-line growth track record, operating and free cash flow have deteriorated significantly over the last several years, indicating potential issues with working capital management or profitability of its growth.
• The company trades at a premium valuation compared to the provided peer average, with a P/E ratio over 60x. This elevated valuation, combined with margin pressure and severe cash flow issues, suggests the market may be pricing in a level of growth and profitability that could be challenging to achieve.

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• FS adopts a unique light-asset business model of “R&D design + outsourcing production + direct sales platform”, which leads to higher profit margin than traditional channel sales vendors.
• FS once failed in A-Share IPO and received penalty in 2025. Internal control defects are the “Achilles heel”, which makes us worry whether FS has the problem of “inflating revenue”. 
• Although FS has positive performance growth, the uncertainty of Sino-US relations and exchange rate risks may put pressure on profitability. Valuation of FS could be lower than peers.