Daily Brief China: Sany Heavy Industry, China Nonferrous Mining Corp, TOP TOY International Group, Chando Global Limited, Water Oasis, LakeShore Biopharma, Xuanzhu Biopharmaceutical, JST Group, Zijin Gold, Rio Tinto Ltd and more

• Sany Heavy Industry (600031 CH), the world’s third-largest construction machinery company, has filed its PHIP for an H Share listing to raise US$1.0-1.5 billion.     
• SANY has six operating segments. The largest segment, as measured by revenue and gross profit, is excavating machinery.
• The fundamentals are good, with strong growth, an increasing overseas mix, an improving margin profile, strong cash generation, and a solid balance sheet. 

• The rally in China Nonferrous Mining Corp (1258 HK)‘s stock price over the last 6 months should result in the stock being added to a global index in November. 
• China Nonferrous Mining Corp (1258 HK) has outperformed a lot of its peers and now trades at higher valuations.
• Positioning has increased sharply in the last 6 weeks, and yesterday’s sharp fall could have been a result of unwinding of some of that positioning.

• TOP TOY International Group Limited, a world-class pop toy brand company from China, filed to go public in Hong Kong.
• Founded in 2020, the brand has quickly positioned itself as a domestic rival to China’s Pop Mart, capitalizing on the country’s booming “blind box” and designer toy craze.
• TOP TOY has shown strong growth and execution, going from RMB641m in sales of pop toy products in 2022 to RMB2,554m expected this year.

• Chando Global Limited (CHANDO HK) is looking to raise at least US$500m in its upcoming Hong Kong IPO. The deal will be run by Huatai International and UBS.
• Chando Global is a multi brand cosmetics company in China. It was China’s third-largest domestic cosmetics group, by retail sales in 2024, according to Frost & Sullivan (F&S).
• Its flagship brand, CHANDO, had consistently ranked among the top two domestic cosmetics brands for 12 consecutive years from 2013 to 2024 by retail sales.

• Water Oasis operates a resilient, dual-engine business model combining beauty services and product retail, primarily in Hong Kong. This diversification provides multiple revenue streams and cross-selling opportunities.
• The company exhibits a strong financial position with a debt-free balance sheet and significant cash reserves, supporting a high dividend yield. However, recent net income and dividend payouts have shown volatility.
• Future growth hinges on the recovery of consumer spending in Hong Kong and successful expansion into Greater China. The company’s strategy of targeting various consumer segments and expanding its brand portfolio positions it to capture market shifts, though it faces intense competition.

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• LakeShore Biopharma’s delisting from Nasdaq to OTC caused forced selling, impacting merger arbitrage spread, with 18% upside potential.
• Mayne Pharma’s acquisition by Cosette Pharmaceuticals faces legal challenges over a material adverse change, with a 40-50% spread.
• Currency Exchange International’s closure of Canadian business and potential US uplisting could enhance profitability and shareholder returns.

• Xuanzhu raised HKD 781m (USD 100m) from its global offering and will list on the Hong Kong Stock Exchange on Wednesday, October 15, 2025.
• In our previous note, we looked at the company’s operation, management track records and discussed the IPO valuation.
• In this note, we provide an update for the IPO before trading debut.

• JST Group (1703609D CH) is looking to raise up to US$270m in its upcoming Hong Kong IPO.
• It is China’s largest and most popular e-commerce SaaS ERP provider. 
• In this note, we examine the IPO dynamics, and look at the firm’s valuation.

• Zijin Gold (2259 HK)’s share price has surged by 92% to reach HK$137.4 per share since its IPO price of HK$71.59 per share.
• Zijin Gold now trades at a 61% premium to the comps’ average EV/EBITDA valuation multiple in 2026. 
• One could argue that this excessive valuation multiple is a bit too aggressive despite higher growth prospects. Therefore, on a relative valuation basis, we would not chase after Zijin Gold. 

• Pilbara shipments are tracking the lower end of guidance, with cyclone recovery hinging on a strong Q4.
• Simandou shipments stay on schedule, adding supply pressure amid weak Chinese steel demand and negative margins.
• China’s diversification and RMB trade shift threaten Rio’s pricing power, demanding agility and strategic adaptation.