In today’s briefing:
- OneConnect (6638 HK/OCFT US): Ping An’s Offer Gets The Nod From SAMR
- China Medical System (867 HK): SGX Secondary Listing Benefits Questionable
- PC 2Q25: 6-7% Unit Growth YoY Is Pretty Good. 2025 Looks like a 5-6% Growth Year
- Sa Sa Intl (178 HK): Looking Better Forward
- Lucror Analytics – Morning Views Asia
- Zijin to Float Its Overseas Arm to Fund Global Expansion as Gold Prices Soar
- China Northern Rare Earth (600111.SH): Strong H1 Guidance Supports Full-Year Outlook
- Shanghai MediTrust Health Technology Group Pre-IPO Tearsheet
- CStone Pharma (2616 HK): Placement to Fund R&D; Sugemalimab Changes Fortune For Now, What Lies Next?
OneConnect (6638 HK/OCFT US): Ping An’s Offer Gets The Nod From SAMR
- On the 15th May, dual-listed Oneconnect (6638 HK/OFT US), a digital retail banking/commercial banking/digital insurance play, announced a firm Scheme Offer from Ping An, OneConnect’s controlling shareholder.
- Ping An is offering HK$2.068/share, or US$7.98/ADS, a 72.33% premium to last close, and a 131.66% premium to the 30-day average. Net cash is, however, ~HK$1.83/share. The price is final.
- SAMR has now signed off on the deal, satisfying the pre-condition. We await directions from the Cayman court on timing. I’m estimating late-September payment. Should the deal get up.
China Medical System (867 HK): SGX Secondary Listing Benefits Questionable
- On the 24th June 2025, specialty pharmaceutical play China Medical System (867 HK) (CMS) announced a proposed secondary SGX listing, by way of introduction. No equity fundraising will occur.
- The SGX has given the green light, with shares expected to commence trading on the 15th July.
- This secondary listing is not, it would seem, a pre-cursor to an HKEx withdrawal; but to “enhance the [CMS’s] global visibility, thereby facilitating its international business expansion“.
PC 2Q25: 6-7% Unit Growth YoY Is Pretty Good. 2025 Looks like a 5-6% Growth Year
- Consumer demand remains slow but Enterprises are upgrading to Windows 11. Low risk of tariff distortion: 1Q was too high in the US but 2Q has slowed down.
- 2Q25 highest YoY growth: Apple (22%), Asus (17%), Lenovo (16%). Others are flat. Enterprise growth also implies higher ASP and margins for PC and CPU vendors.
- On the CPU side, AMD share gains have slowed in PC, accelerated in Server. Given their roadmap, AMD should keep gaining slowly, Intel defending with difficulty.
Sa Sa Intl (178 HK): Looking Better Forward
- Sa Sa International Hldgs (178 HK)‘s 1Q FY26 update provides evidence for a business recovery as turnover grew 4.7%, against a YoY drop in the last 5 quarters.
- Resurgence in mainland tourist arrivals is a driver. The start of 2Q FY26 also looks good, as this has increased 21.8% YoY in the last 15 days.
- At 1.55x P/B, it is only 7% above the trough since 2020. Also, it traded at a higher multiple in FY20-22 when it was loss-making.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: Shui On Land, Vedanta Resources, JSW Steel, Nissan Motor
- UST yields declined yesterday (the first drop in a week), on the back of a solid auction of 10Y notes. The yield on the 2Y UST fell 5 bps to 3.84%, while the yield on the 10Y UST was down 7 bps at 4.33%. Equities rallied, led by gains in large tech stocks. The S&P 500 rose 0.6% to 6,263, while the Nasdaq climbed 0.9% to 20,611.
- US President Donald Trump has released more tariff-letter screenshots on Truth Social, outlining a 25% rate on the Philippines, 30% on Sri Lanka and 50% on Brazil, among others. In particular, the letter for Brazil highlighted the “witch hunt” on former Brazilian president Jair Bolsonaro, as well as the country’s “insidious attacks on free elections and the fundamental free speech rights of Americans”, citing the Brazilian Supreme Court’s censorship orders on US social media platforms.
Zijin to Float Its Overseas Arm to Fund Global Expansion as Gold Prices Soar
- Zijin Mining Group Co. Ltd., China’s largest gold producer, is carving out its fast-growing international operations for an initial public offering (IPO) in Hong Kong, aiming to build a well-funded global powerhouse as gold prices reach record heights.
- Already listed in Hong Kong and Shanghai, Zijin announced Monday that its subsidiary Zijin Gold International Co. Ltd. has submitted an IPO application to the Hong Kong Stock Exchange.
- The offering — jointly underwritten by Morgan Stanley and Citic Securities — will float up to 15% of the unit’s shares, with an overallotment option of an additional 15% of that tranche.
China Northern Rare Earth (600111.SH): Strong H1 Guidance Supports Full-Year Outlook
- China Northern Rare Earth issued a mid-year earnings guidance of ¥900–960 million for H1 FY2025, marking a 1,900%+ YoY increase and reflecting strong volume recovery and operational leverage.
- The company is on track to meet our full-year net profit estimate of ¥2.33 billion and EPS of ¥0.65, assuming a seasonally stronger H2.
- Key risks include ongoing export restrictions, global supply chain diversification efforts, and downstream demand volatility, while long-term plans remain aligned with China’s rare earth consolidation and value-added material strategy.
Shanghai MediTrust Health Technology Group Pre-IPO Tearsheet
- Shanghai MediTrust Health Technology Group Co., Ltd. (SMHTG) is looking to raise about US$100m in its upcoming Hong Kong IPO. The deal will be run by GS, HSBC, and CICC.
- SMHTG is the largest innovative healthcare payor platform in China, according to Frost & Sullivan (F&S).
- SMHTG is transforming the healthcare payment system in China by addressing funding and payment challenges faced by patients, health insurers and pharmaceutical companies.
CStone Pharma (2616 HK): Placement to Fund R&D; Sugemalimab Changes Fortune For Now, What Lies Next?
- CStone Pharmaceuticals (2616 HK) announced the placement of 100M shares for subscription at HK$4.72 per share. Placing shares represent approximately 7.33% of existing issued shares capital of the company.
- The company intends to use 90% of the net proceeds from the for further research and development relating to assets in the company’s “Pipeline 2.0”.
- Expanded indications of sugemalimab, the successive data readouts, approvals and continuous commercialization expansion efforts into global markets augurs well, but concerns remain.
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