Daily Brief China: Trio Industrial Electronics Group, Moore Threads Technology, JD Logistics, NAURA Technology Group, Suzhou Dongshan Precision A, Shandong Linuo Pharmaceutical Packaging, Beijing QL Biopharmaceutical, EcoCeres, MiniMax, Anhui Sinomags Technology and more

• In the past two months, Lotus Horizon (6063 HK), WK (2535 HK), and Superland (368 HK) have been subject to conditional/unconditional (massive) takeunders. Expect the same for KFM (3816 HK).
• Now fellow contractor/manufacturer, Trio Industrial Electronics Group (1710 HK), is suspended pursuant to the Hong Kong Code on Takeovers and Mergers. Its share price is up ~567% since June-end.
• Not a great look for the exchange. I’ve reached out to the HKEx to get their read.

• Moore Threads Technology (688795 CH) (MTT), a domestic GPU producer, aims to raise over >US$1bn in its H-share listing.
• MTT mainly engages in the research, design, and sales of GPUs and related products. It listed its A-shares just last year.
• We looked at its past performance in our earlier note. In this note, undertake a peer comparison and talk about valuations.

• In H1 and Q2 this year, JD Logistics’ top-line growth remained strong, growing by 20%+
• But margins have continued to erode in recent periods, probably due to changes in mix
• Down close to HK$10 per share, we believe lots of negativity is “baked in” to price

• NAURA ownership has surged seven-fold since 2023: 18.3% of active funds now hold it, with $2.4bn invested and holders running a committed 1.86% average position.
• The register is built on emerging markets: owned by 63% of China A-Share funds and 22% of GEM funds, with GEM investors leading 2026’s buying.
• Global and ACWI ex-USA funds hold nearly $15bn in NAURA’s listed peers but under $100m in NAURA itself. Breaking into global portfolios is the next leg.

• Source Photonics Integration as the Core Profit Engine: Following its consolidation in October 2025, Source Photonics has fundamentally reshaped DSBJ’s financial profile, accounting for 52.92% of consolidated net profit in Q1 2026. This vertical integration into high-value Indium Phosphide (InP) EML laser chips offers a structural margin cushion against severe ASP erosion in the pluggable assembly market.
• The Capital Allocation Paradox of the Hong Kong Listing: The targeted $2 billion to $3 billion Hong Kong IPO—which received CSRC clearance for up to 234.04 million H shares on September 29, 2026—is driven by onshore balance sheet deleveraging and funding the aggressive $1.2 billion domestic capacity expansion for Source Photonics. This heavy domestic spend contrasts with modest capital allocations for Mexico and Southeast Asia, highlighting a strategy that prioritizes technology-heavy domestic capex over rapid geopolitical footprint diversification.
• Divergent Cyclical Realities (AI vs. Mobile & EV): DSBJ faces a stark divergence between its hyper-growth AI optical and high-layer HDI segments (propelled by North American hyperscaler demand) and its legacy consumer and automotive units. While AI demand is structural and currently constrained only by EML chip and high-frequency copper-clad laminate (CCL) supply, the traditional FPC business (tied to Apple’s smartphone cycle) and the precision automotive metal business (tied to Tesla’s Mexico slowdown) are operating in late-cycle, margin-compressed territory.

• Shandong Linuo Pharmaceutical Packaging Co.,Ltd. is an established Chinese provider of borosilicate technical glass, specializing in pharmaceutical glass packaging and household heat-resistant glass.
• The company ranked ninth in China’s pharmaceutical glass packaging market and first in China’s household heat-resistant glass market by sales revenue in 2025.
• The company reported a decrease in profit for FY2025 and negative net cash from operating activities for FY2025 and H1 2026.

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• QL adopts a comprehensive business model of “independent R&D + full industrial chain layout + diversified pipeline”.Based on proprietary technology platforms, QL is able to form a structural cost advantage.
• The competition for GLP-1 is moving from the broad stage to the “efficacy, safety, convenience, and economy” refined competition stage, and QL is facing intense competition in multiple dimensions.
• With the comprehensive assessment of QL – “no commercialized product + strong pipeline”, and “first mover advantage + product differentiation”, a neutral scenario is HK$15-20 billion market value.

• A rare pure-play listing. EcoCeres, a Bain-backed Hong Kong producer of sustainable aviation fuel, targets a ~US$1bn IPO by end-2026, in a market created by law.
• It lists near a margin peak. The 2026 oil shock inflated SAF profits; in 2024, oversupply more than halved Neste’s margins. Value it on mid-cycle earnings, not the windfall.
• Price discipline matters. Law-mandated green sectors (solar, wind, renewable fuels) trade at 6–12x EV/EBITDA. The reported US$5bn valuation implies ~14x. Engage below US$3.5bn; pass above US$5bn.

• Top Hong Kong Stock Exchange listed covered call candidates for the month of October.
• The top 10 provide an average ~7.42% premium with a potential ~8.82% upside P&L if exercised.
• Investors with a neutral 1-month view on the underlying can seek to generate income.

• Anhui Sinomags Technology is an IDM in the magnetic sensor industry, offering one-stop solutions across diverse industries. The company ranked tenth globally in magnetic sensor revenue in 2025.
• Anhui Sinomags Technology ranked tenth globally in magnetic sensor revenue in 2025 and fifth in xMR sensor revenue, with revenue increasing 20.2%.
• The company reported a net profit of RMB52,584 thousand in 2025, following a net loss of RMB66,562 thousand in 2023.

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