Daily Brief China: Qinghai Huzhu Barley Wine Co, Sungrow Power Supply, Verisilicon Microelectronics S, Tencent Music, First Pacific Co, Viomi Technology Co Ltd, Geely Auto, Shenzhen Zhaowei Machinery, EpimAb Biotherapeutics, Shenzhen Edge Medical and more

• The review period ended on 31 October, the changes should be announced on 28 November and will be effective after the close of trading on 12 December.
• There could be one delete each for the CSI Liquor Index and the CSI Alcoholic Drink Index. Plus capping changes for a bunch of stocks.
• The entire sector has been under pressure over the last few years with every rally being sold into.

• Nearing the end of the review period for the December rebalance, there could be three changes for the iShares A50 China (2823 HK) / CSOP China A50 (HKD) (2822 HK). 
• Sungrow Power Supply, CMOC Group and China CSSC Holdings could replace S.F. Holding, China Everbright Bank and Bank of Jiangsu in the ETF at the close on 19 December.
• The forecast adds have outperformed the forecast deletes over the last 3 months and it is not even close as the gap has kept getting wider

• There could be one change for the CNI Semiconductor Chips Index with Verisilicon Microelectronics S (688521 CH) replacing Tianshui Huatian Technology Co, Ltd. (002185 CH). 
• Passive trackers will need to buy 0.5x ADV in Verisilicon Microelectronics S (688521 CH) and sell 0.4x ADV in Tianshui Huatian Technology Co, Ltd. (002185 CH). 
• There will be large selling in Cambricon Technologies Lt (688256 CH) due to capping while there will be smaller inflows for the other index constituents.

• Total revenue grew by 21% YoY and offline revenue grew by 50% YoY in 3Q25.
• Both ARPPU and the user base increased YoY in 3Q25.
• The margin had improved year over year for 13 quarters.

• The proposed spin-off – from 49.9%-held MPIC – and listing of Maynilad Water Services (MYNLD PH) completed on the 7th November. 
• Priced at PHP 15/share, Maynilad closed yesterday at PHP 14.82/share, down 1.2%. 
• First Pacific Co (142 HK)‘s indirect/direct holding in Maynilad is estimated at 19.1%, accounting for ~6% of NAV. 

• Viomi preannounced in August that its first-half revenues would exceed RMB 1.4 billion ($195 million), and this week, the company published its complete income statement for the first six months, which demonstrated strong performance in the company’s core market.
• We believe government policies in China drove a meaningful portion of the revenue growth in the first half.
• We are not expecting that this program renews in 2026, but we will adjust our model if that changes.

• We believe that Geely Automobile, listed in Hong Kong as 0175, is a private equity fund first and an auto company second.

• Expectations that Geely will become an international blockbuster akin to Toyota or Hyundai are misplaced.

• Geely relied in 2024 for half its profit on mark-to-market value in subsidiaries.

• Shenzhen Zhaowei Machinery & Electronics (003021 CH), aims to raise around US$700m in its H-share listing.
• Shenzhen Zhaowei Machinery & Electronic (SZME) is a provider of integrated micro transmission and drive system solutions ranking first in China and fourth globally by revenue, according to F&S.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• TCE has been highly popular for hematological malignancies and autoimmune diseases.Due to the “Fear of Missing Out” mentality, MNCs directly have purchased TCE assets or the Newco model is adopted.
• Current clinical data is good for CRC, providing EMB-01 with a solid foundation for entering phase III trials.EMB-06 may face challenges in commercialization. EMB-07 has high hopes to be out-licensed.
• Short-Term valuation could be lower than Akeso. Based on our forecast of the peak sales of EMB-01, EMB-06, EMB-07, long-term valuation could reach about US$16.5 billion.

• Shenzhen Edge Medical is a leading Chinese surgical robotics company, notable for being the first in China and second globally to have multi-port, single-port, and bronchoscopy surgical robots approved for market launch.
• The company is strategically positioned to capitalize on the rapidly growing but under-penetrated surgical robotics market in China, which is supported by strong government initiatives and increasing healthcare demand.
• Despite its technological advancements and strong investor backing, the company is in its pre-revenue stage, facing significant net losses due to high R&D expenditure and intense competition from both domestic and international players.

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