In today’s briefing:
- Tencent’s Uzbekistan Bet: The Beginning Of “Digital Silk Road”?
- STAR50/STAR100 Index Rebalance: Changes & Capping Lead to US$3.3bn Trade
- China Healthcare Weekly (Aug.31) – P/R Ratio Is Meaningless, Innovent, Zylox-Tonbridge 25H1 Results
- Didi Global Q225 Results | Domestic Business Strong | Why a 2025 Listing Still Makes Sense
- Sticking With China; Bullish Outlook Intact. Buys in Consumer Discretionary, Materials, and Tech
- Weekly Deals Digest (31 Aug) – ENN Energy, Shengjing, Ashimori, Carenet, Shibaura, Mayne, Aux
- Last Week In Event SPACE: Dongfeng Motor, Shibaura, HD Hyundai Heavy/HD Hyundai Mipo, Zijin Mining
- Legend Biotech’s 136% Sales Surge Signals Explosive CARVYKTI Momentum; How Long Will It Last?
- NetEase: Can Its Latest AI Innovation Propel It Into the Next Era of Gaming Leadership?
Tencent’s Uzbekistan Bet: The Beginning Of “Digital Silk Road”?
- Tencent’s recent investment in Uzum marks the first investment by a Chinese tech giant in a local Central Asian startup, signaling a fundamental strategic pivot in the region.
- Central Asia now presents potential markets for Chinese tech companies, beyond just infrastructure or commodity-focused opportunities, following the execution of the earlier phases of the Belt & Road Initiative.
- Given Uzbekistan’s larger population and more diversified economy, it is generally seen as better fitted for tech companies’ growth, esp. B2C platforms, compared to Kazakhstan (a raw materials giant).
STAR50/STAR100 Index Rebalance: Changes & Capping Lead to US$3.3bn Trade
- There is 1 constituent change for the STAR50 INDEX and 5 changes for the STAR100 Index at the next rebalance that will be implemented at the close on 12 September.
- We estimate one-way turnover of 6.1% for the SSE STAR50 (STAR50 INDEX) resulting in a round-trip trade of CNY 23.8bn (US$3.3bn).
- There will be huge capping outflows for Cambricon Technologies Lt (688256 CH) following the massive rally in the stock over the last couple of months.
China Healthcare Weekly (Aug.31) – P/R Ratio Is Meaningless, Innovent, Zylox-Tonbridge 25H1 Results
- We strongly disagree with the valuation method of “P/R”. which is calculated by dividing market value by R&D expenses. It is still necessary to view the valuation system rationally.
- Innovent surprisingly turned loss into profits for the first time in 25H1. Considering the future contribution of mazdutide and IBI363, valuation of Innovent may reach above RMB200 billion.
- The logic of Zylox is import substitution. Based on strong fundamentals, if liquidity remains strong, reasonable P/E is 40-45x. Target share price is HK$25-29/share based on 2025 net profit.
Didi Global Q225 Results | Domestic Business Strong | Why a 2025 Listing Still Makes Sense
- Q225 saw solid growth & improving margins, driven by strength in China business
- Lawsuit settlement hit net result in Q225, but investors shrugged off the news
- We still think Didi could pursue a new listing later in 2025, probably in HK
Sticking With China; Bullish Outlook Intact. Buys in Consumer Discretionary, Materials, and Tech
- We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.
- We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 6028-6059 and $119-$121.
- We remain overweight/continue to have a major focus on China (Shanghai Composite). It continues to offer the most attractive opportunities, with a significant number of today’s recommendations coming from China.
Weekly Deals Digest (31 Aug) – ENN Energy, Shengjing, Ashimori, Carenet, Shibaura, Mayne, Aux
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Aux Electric (2580 HK) prices at the top of the range, Tata Capital Limited (TATACAP IN) is seeking to raise US$2.0 billion.
- Event-Driven developments: Ashimori Industry (3526 JP), Carenet Inc (2150 JP), Shibaura Electronics (6957 JP), Shengjing Bank Co Ltd H (2066 HK), Mayne Pharma (MYX AU).
Last Week In Event SPACE: Dongfeng Motor, Shibaura, HD Hyundai Heavy/HD Hyundai Mipo, Zijin Mining
- Dongfeng Motor (489 HK) to be taken private via cash plus scrip into the backdoor listing of its EV arm.
- Minebea extends its ¥6,200 TOB for Shibaura (6957 JP) to 11 September, a day after YAGEO’s ¥7,130 bid expires. Now there’s no game of chicken with Minebea. Just with METI.
- The HD Hyundai Heavy Industries (329180 KS)/HD Hyundai Mipo (010620 KS) merger announcement reaffirms Seoul’s commitment to the MASGA project.
Legend Biotech’s 136% Sales Surge Signals Explosive CARVYKTI Momentum; How Long Will It Last?
- Legend Biotech Corporation’s second quarter of 2025 was marked by significant milestones and notable financial and operational achievements, balanced by some ongoing challenges.
- On the positive side, the company reported substantial growth in CARVYKTI sales, reaching $439 million, an increase of 136% year-over-year.
- This robust growth underscores the rapid uptake of CARVYKTI, primarily driven by its expansion in second to fourthline settings for multiple myeloma treatments.
NetEase: Can Its Latest AI Innovation Propel It Into the Next Era of Gaming Leadership?
- NetEase, Inc.’s second quarter financial results for 2025 illustrate a mixed yet promising outlook for the company.
- The broad performance metrics highlight both robust areas of growth and certain challenges the company continues to face.
- Key revenue drivers include the gaming and related value-added services (VAS) segment, which saw a 14% increase year-over-year, buoyed by solid returns from existing game franchises and successful new game launches like “Where Winds Meet” and “Marvel Rivals.” Notably, the company’s expertise in offering diverse gaming experiences and its strategic global expansion have positively influenced revenue growth.
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