In today’s briefing:
- Quiddity Leaderboard HSIII Dec25/Mar26: Interesting Implications of the Recent Methodology Changes
- StubWorld: AviChina (2357 HK) Coming Up “Cheap”
- Chow Tai Fook (1929 HK): Strong Rally, Weak Jewellery Demand. Growth Risks.
- Chery Automobile IPO (9973 HK): Valuation Insights
- Chery Auto IPO – Probably Around Fair Value, Cash and Peer Momentum Might Save the Day
- Underweight/Short Alibaba (9988 HK): Quant Model Flags Mean Reversion After 40% Post-Earnings Surge
- Dongfang Electric Placement: Second Primary Raise of the Year
- Jack Ma-Backed Yunfeng Dives Into Crypto With $44 Million Ether Purchase
- Yusys Technologies A/H Listing: Market Share Loss but Profit Margins Have Expanded
- Pre-IPO TenNor Therapeutics (Suzhou) Limited – The Pipelines and the Concerns
Quiddity Leaderboard HSIII Dec25/Mar26: Interesting Implications of the Recent Methodology Changes
- The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
- In this insight, we take a look at the impact of the new selection methodology for the December 2025 and March 2026 rebal/review events.
- We have also presented our index change expectations for the next semiannual index review which will take place in March 2026 (regular ADDs/DELs only take place in March and September).
StubWorld: AviChina (2357 HK) Coming Up “Cheap”
- Down 18% in the past month, fundamentals for AviChina Industry & Technology H (2357 HK), one of China’s leading aviation/defense plays, still appear demanding.
- Preceding my comments on AviChina are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Chow Tai Fook (1929 HK): Strong Rally, Weak Jewellery Demand. Growth Risks.
- China gold jewelry demand slumped in 2Q2025, while investment demand for coins and bars remained resilient amidst rise in gold prices, according to data released by China Gold Association.
- If gold rally continues, Chow Tai Fook Jewellery (1929 HK) faces heightened demand growth risk due to reliance on the competitive, price-sensitive, consumption-driven jewellery segment.
- Chow Tai Fook’s 140% YTD rally reflects optimism on branding-driven earnings growth, but stretched valuations overlook downside risks to growth if gold prices keep rising.
Chery Automobile IPO (9973 HK): Valuation Insights
- Chery Automobile (9973 HK) is a Chinese automobile manufacturer. It has launched an HKEx IPO to raise up to US$1.2 billion.
- I previously discussed the IPO in Chery Automobile IPO: The Bull Case and Chery Automobile IPO: The Bear Case.
- In this note, I present my forecasts and valuation. My analysis suggests that the IPO price range is reasonable.
Chery Auto IPO – Probably Around Fair Value, Cash and Peer Momentum Might Save the Day
- Chery Automobile is looking to raise about US$1.2bn in its upcoming Hong Kong IPO.
- Chery Auto is a Chinese passenger vehicle company which designs, develops, manufactures and sells passenger vehicles, including internal combustion engine vehicles and new energy vehicles, both domestically and overseas.
- We have looked at the company’s past performance in our previous notes. In this note, we talk about valuations.
Underweight/Short Alibaba (9988 HK): Quant Model Flags Mean Reversion After 40% Post-Earnings Surge
- Context: The Alibaba (9988 HK) / Hang Seng Index (HSI INDEX) price-ratio deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
- Highlights: Going long the Hang Seng Index and short Alibaba (9988 HK) targets a 12% return.
- Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.
Dongfang Electric Placement: Second Primary Raise of the Year
- Dongfang Electric (1072 HK) is looking to raise around US$141m from a primary placement.
- The deal is a small one, representing 3.2 days of the stock’s three month ADV, and 1.5% of total shares outstanding.
- In this note, we will talk about the placement and run the deal through our ECM framework
Jack Ma-Backed Yunfeng Dives Into Crypto With $44 Million Ether Purchase
- A financial group backed by Alibaba Group founder Jack Ma has made a major foray into digital assets, investing $44 million to acquire 10,000 units of Ether, the native token of the Ethereum blockchain.
- Yunfeng Financial Group Ltd., a Hong Kong-listed company in which Ma holds an 11.15% stake, disclosed the acquisition in a regulatory filing Tuesday. The company said it purchased the Ether on the open market using internal cash and would classify the asset as a long-term investment on its financial books.
- The purchase marks a growing trend of publicly traded companies adding cryptocurrencies to their balance sheets, a strategy known on Wall Street as digital asset treasury, or DAT.
Yusys Technologies A/H Listing: Market Share Loss but Profit Margins Have Expanded
- Yusys Technologies (300674 CH) is looking to raise around US$350m in its upcoming H-share listing.
- Yusys Technologies is a PRC leading fintech solution provider operating in the domestic and overseas market, providing full-stack product-oriented technology solutions to a wide spectrum of financial institutions.
- In this note, we look at its past performance and other deal dynamics that might impact the listing.
Pre-IPO TenNor Therapeutics (Suzhou) Limited – The Pipelines and the Concerns
- China has vigorously restricted the use of antibiotics. Even for novel antibiotics, they won’t replace old antibiotics completely considering higher price/the difficulty of changing prescription habits of existing clinical guidelines.
- The NMPA’s approval standards for new antibiotics are becoming increasingly strict. So, regulatory agencies’ evaluation of the true efficacy of TNP-2198 may lead to the delay in its market launch.
- Post-Money valuation after Series E financing reached RMB2 billion. Valuation of TenNor could be lower than peers Zai Lab and Everest Medicines who already have commercialized products on the market.
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