Daily Brief China: Ping An Healthcare and Technology, Jinke Smart Services, Xiaomi, Hang Seng Index, Trip.com, Alebund Pharmaceuticals Jiangsu, Jiangsu Lopal Tech, Anjoy Foods Group, International Entertainment and more

• The review period for the December rebalance of the CSI Overseas China Internet Index ended 31 October. The changes should be announced 28 November and implemented close on 12 December.
• There could be 6 inclusions for the KraneShares CSI China Internet ETF (KWEB US) in December with most inclusions being high probability.
• Impact on the inclusions varies between 1.3-5 days of ADV. There will be stocks with float increases and some capping changes.

• Jinke Smart Services (9666 HK) has announced an enhanced offer from Boyu at HK$8.69, a 30.3% premium to the existing base offer of HK$6.67.
• The enhanced offer is conditional on the shareholders’ approval of the delisting resolution and the 90% minimum acceptance condition from disinterested shareholders.
• The 90% minimum acceptance condition could be challenging, particularly as the peers have re-rated and the enhanced offer is barely above the undisturbed price. 

• Xiaomi’s total revenue grew by 22% in 3Q25, which mainly came from the startup vehicle business.
• The company well controls the gross margin of the vehicle business.
• We believe XM has an upside of 60% for the yearend 2025.

• As Brian Freitas recently outlined, the Hang Seng Index (HSI INDEX) changes will be announced November 21st (this Friday) and take effect on December 6th.
• Brian predicted index additions and no deletions. As with all rebalances, inflows, outflows, and adjustments could trigger volatility. Our models, trained on decades of market data, help forecast these moves.
• Currently the HSI INDEX is in a mild WEEKLY correction, after a previous modest 2-week rally. We are still waiting for a meaningful correction, after the recent monster rally.

• In 3Q25, total revenue increased by 16% YoY with hotel booking up by 18% YoY and transportation commission up by 12% YoY.
• Overseas travel continued to recover and consumption shrink does not impact TCOM much.
• We believe the stock has an upside of 29% for the next twelve months.

• Revenue growth in Q3 (+15.5% Y/Y) held up reasonably well for Trip.com
• But core margins continue to deteriorate: Adjusted EBITDA margin down -120 bps Y/Y
• We still feel TCOM shares are pricey, and that earnings growth is unimpressive

• Alebund Pharmaceuticals, a China-based clinical-stage biotech company, is looking to raise at least USD 100 million via a Hong Kong listing. Jefferies, BoA, and HTSC are the joint sponsors.
• In our previous note, we looked at the company’s history and its core product, AP301, and AP306, and its management.
• In this note, we look at the core product AP301’s pivotal Phase 3 data for AP301 presented in ASN2025.

• Jiangsu Lopal Tech is undergoing a significant strategic pivot from its traditional automotive fine chemicals business to the high-growth, yet volatile, lithium iron phosphate (LFP) cathode materials market for electric vehicle (EV) batteries.
• This transition has fueled exceptional revenue growth but has also led to severe profitability challenges, with the company posting significant net losses and negative margins over the past two years, driven by raw material price volatility and intense competition.
• The company’s financial health is under pressure, evidenced by negative operating cash flow in recent periods and a net current liability position. Future success hinges on stabilizing LFP profitability, managing cash flow, and navigating the highly competitive dynamics of the EV supply chain.

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• Anjoy Foods Group (2648 HK)‘s rally since reporting 3Q25 results is prompted by solid revenue and margin recovery. Its HA discount has narrowed 6.1pp from IPO. 
• Sales model and geographical optimisation has driven business outlook. With projected EPS CAGR of 10.4%, it is now in line with the sector momentum.
• Its PEG of 1.4x is below peer’s average of 1.9x. With net cash equalling 15.1% of its share price, it can deliver a decent 5.4% FY26F dividend yield.

• International Entertainment is undergoing a high-stakes transformation, marked by explosive revenue growth driven by its Philippine hotel and gaming operations. However, this growth is coupled with severe and widening net losses and significant cash burn, raising concerns about its path to profitability.
• The company is making a significant capital investment to acquire and renovate a casino in Manila, transitioning from a hotel operator and equipment lessor to a fully integrated resort operator. This move hinges on the continued growth of the Philippine gaming market and the company’s ability to manage a large-scale development.
• Extreme financial distress, evidenced by collapsing margins, negative cash flows, and a history of profit warnings, presents a high-risk profile. The company’s future viability is dependent on a successful operational turnaround and its ability to generate profit from its rapidly growing revenue base.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.