In today’s briefing:
- What’s Up (& Up) With Shandong Hi-Speed 412 HK)?
- Shengjing Bank (2066 HK): Another Rural Commercial Bank Delisting
- Shengjing Bank (2066 HK): Privatisation on the Cards?
- Quiddity Leaderboard CSI 1000 Dec25: US$2.8bn One-Way; Strong Momentum for ADDs V DELs
- Xiaomi (1810.HK) Q2 Earnings: Setup Features Low Volatility and Recent Underperformance
- Hong Kong Single Stock Options Weekly (Aug 11 – 15): Market Breadth Expands, Options Activity Grows
- Lucror Analytics – Convertibles Brief
What’s Up (& Up) With Shandong Hi-Speed 412 HK)?
- Back on the 18th Feb 2025, Shandong Hi-Speed (412 HK) (SHS) closed its unconditional Offer for Shandong Hi-Speed New Energy (1250 HK). Shortly thereafter, SHS’ share price took off.
- SHS is now up 190% in the past six months. And ~1800% since Covid.
- What gives? It’s not index related. And forward earnings do not justify the move. This looks like a bubble. Short interest is on the move.
Shengjing Bank (2066 HK): Another Rural Commercial Bank Delisting
- In Chinese RCBs: Two Bailouts. How Many More At Risk?, I concluded Shengjing Bank (2066 HK) was one bank I would avoid. It’s now suspended pursuant to the Takeovers code.
- Shengjing Bank had one of the largest P/B and net income declines in recent years. It had borderline allowance/provision coverage. It also had the lowest net interest margin.
- Shengjing Bank is PRC-incorporated, therefore any delisting proposal would involve a Merger by Absorption, incorporating a Scheme-like vote. And probably a tendering condition.
Shengjing Bank (2066 HK): Privatisation on the Cards?
- Shengjing Bank Co Ltd H (2066 HK) entered a trading halt “pending the publication of an announcement pursuant to the Hong Kong Code on Takeovers and Mergers.”
- It is likely that the SASAC of Shenyang Municipal People’s Government, the largest shareholder, is seeking to privatise Shengjing.
- Precedents point to a voluntary conditional offer and delisting proposal. My estimated offer price range is HK$2.00-HK$2.80, a 75.4%-145% premium to the last close.
Quiddity Leaderboard CSI 1000 Dec25: US$2.8bn One-Way; Strong Momentum for ADDs V DELs
- CSI 1000 represents the next 1000 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges after CSI 800.
- In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in December 2025.
- Currently, we see 100 ADDs/DELs for the CSI 1000 index.
Xiaomi (1810.HK) Q2 Earnings: Setup Features Low Volatility and Recent Underperformance
- The setup for this earnings release is interesting as Xiaomi has underperformed HSI since the end of June.
- Xiaomi’s Q2 earnings setup features low vols a strong beat record and interesting Q2 dynamics.
- Implied vol sits near historic lows despite the approaching earnings.
Hong Kong Single Stock Options Weekly (Aug 11 – 15): Market Breadth Expands, Options Activity Grows
- Broad-Based strength across sectors pushed HSI higher despite late-week weakness.
- Option trading accelerated into week’s end, with Calls showing a modest uptick.
- The HKD pulled back from the top end of its trading range after prior interventions.
Lucror Analytics – Convertibles Brief
- Credit markets were stable yesterday, with the iTraxx X-Over at 261 bps. European bourses rose 0.1-1.2%. In the US, both the S&P 500 and Nasdaq were flat.
- In Asia this morning, the Nikkei is up 1.0%, while the Hang Seng is down 1.1%. US equity futures are slightly higher.
- WTI is trading at USD 63.8/bbl, and Brent at USD 66.7/bbl. US President Donald Trump said that he sees the upcoming meeting with his Russian counterpart Vladimir Putin today as a precursor to a second and more important meeting.
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