Daily Brief China: Oneconnect Financial Technology, Kingsoft Cloud Holdings, Alibaba, Victory Giant Technology -A, China Resources Beer Holdings, China Satellite Communications, Everbright Securitie Co (A), SJM Holdings, Prosus NV and more

• I was way off on timing. After the pre-cons were satisfied on the 9th July, I thought Ping An’s Offer for Oneconnect Financial (6638 HK) could feasibly wrap up around now.
• A draft Scheme Doc was released on the 18th July. The IFA (Gram Capital) said fair & reasonable. 
• The Scheme Document is now out, with a Court Meeting on the 28th October and expected payment around the 28th November. 

• Kingsoft Cloud Holdings (3896 HK) is looking to raise around US$304m in a primary placement.
• The company will use the proceeds to support its AI business, including infrastructure expansion and enhancement of cloud services.
• In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

• Oneconnect Financial Technology (6638 HK)’s IFA opines that Ping An Insurance (H) (2318 HK)’s HK$2.068 (US$7.976 per ADS) offer is fair and reasonable. The vote is on 28 October. 
• The offer is below net cash, and the FCF burn is modest. Ping An is privatising OneConnect just as its revenue declines end (due to the discontinued cloud business).
• The high minority participation rate and protest votes at the recent AGM are warning signs that the scheme vote is high risk. This setup is best avoided. 

• Context: Stat-arb models flag Alibaba (9988 HK) as overvalued versus the Hang Seng Index (HSI INDEX), with the difference between implied volatility and option premium at historically high levels.
• Highlight: An actionable trade setup — long HSI calls vs. short Alibaba calls — that captures relative value and introduces leverage through a ratio structure.
• Why Read: This is a timely opportunity to combine a directional view with favorable volatility dynamics, offering asymmetric payoff potential.

• Victory Giant Technology -A (300476 CH) (VG) aims to raise around US$1bn in its H-share listing.
• VG is one of the global leaders in advanced printed circuit boards (PCB) products for AI and high-performance computing.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• Heineken Holding NV (HEIO NA) ’s US$3.2bn acquisition of beer, soft drinks, and retail assets in Central America at 11.6x EV/EBITDA highlights the valuation gap with Asian Beer Companies.
• CR Beer’s strong 1H2025 recovery in sales and margins were powered by innovative product launches and digital channel sales. However it’s performance has drawn little market attention, yet.
• China Resources Beer Holdings (291 HK)  trades near 10-year low EV/EBITDA, even as consensus expects solid margins and steady revenue growth ahead. Expect a valuation upside.

• China Satellite Communications (China Satcom) is a core professional subsidiary of China Aerospace Science and Technology Corporation, holding a national basic telecommunications business license. It is the primary operator of satellite communications in China, with a fleet of geostationary satellites covering China, Southeast Asia, South Asia, the Middle East, Africa, Europe, and the Pacific.
• The company’s revenue streams are primarily derived from satellite resource leasing and value-added services, including broadcasting, telecom, corporate, and government applications. While revenue has seen a slight decline in recent years, the company maintains a strong market position within China.
• The global satellite communication market is projected to experience significant growth, driven by the increasing demand for high-speed internet, particularly in remote areas, and the expansion of applications in the military, aviation, and maritime sectors. This presents both opportunities and challenges for China Satcom as the industry landscape evolves with the rise of LEO constellations and new technologies.

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• Everbright Securities is a prominent, state-affiliated financial services firm in China with a comprehensive business model spanning wealth management, investment banking, and asset management.
• The company’s financial performance is inherently tied to the volatility of China’s capital markets, as evidenced by recent declines in revenue and net income following periods of strong growth. Regulatory shifts and intense domestic competition are key factors influencing its operational landscape.
• Strategically, the firm is focused on optimizing its capital structure and expanding into higher-margin businesses like institutional brokerage and wealth management to navigate the highly fragmented and competitive domestic market.

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• In today’s Morning Views publication we comment on developments of the following high yield issuers: SJM Holdings
• UST yields climbed 2-3 bps across the curve yesterday, rising for the fourth straight day after the Fed’s rate cut last week. The UST curve bear flattened slightly, with the yield on the 2Y UST rising 3 bps to 3.60%, while that on the 10Y UST increased 2 bps to 4.15%. Equities climbed for a third straight day.
• The S&P 500 edged up 0.4% to a fresh record high (for the 28th time this year) of 6,694, while the Nasdaq was up 0.7% at 22,789.

• Prosus is a global internet group with a vast portfolio of online companies, but its market value is predominantly influenced by its substantial stake in Chinese tech giant Tencent.
• The company trades at a significant and persistent discount to its net asset value (NAV), a key challenge management is addressing through an open-ended share buyback program funded by the gradual sale of its Tencent shares.
• A strategic pivot is underway, shifting from a passive investment holding company to an active operator aiming to drive its core e-commerce segments (Food Delivery, Classifieds, Fintech, and Edtech) to sustained profitability and unlock value independent of Tencent.

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