In today’s briefing:
- Quiddity Leaderboard HSCEI Dec25: Three ADDs/DELs Likely; Sector-Neutral Idea
- Evergrande Property Services (6666 HK): Offer Expected As Parent (Likely) Exits
- Jilin Jiutai Bank (6122 HK): Take The Offer. It Is What It Is
- Zijin Mining: Gold IPO De-Risks, Copper Upside Remains
- Zijin Gold IPO Valuation Analysis
- Chery Auto Pre-IPO – Thoughts on Valuation
- Evergrande Services (6666 HK): Liquidation of Evergrande’s Stake to Trigger an Unconditional MGO?
- Evergrande Property Services (6666 HK): Liquidators’ Auction
- China Medical System (867 HK) – From an 8 to a 16 FPE
- Genfleet Therapeutics IPO: Finely Placed at the Moment; RAS Inhibitors Hold Key to Future Growth
Quiddity Leaderboard HSCEI Dec25: Three ADDs/DELs Likely; Sector-Neutral Idea
- The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
- In this insight, we take a look at the rankings of potential ADDs and potential DELs for the December 2025 index rebal event.
- At present, we see three changes based on the latest data but the rankings can change until 30th September 2025.
Evergrande Property Services (6666 HK): Offer Expected As Parent (Likely) Exits
- Property management play Evergrande Property Services (6666 HK) (EPS) is currently suspended pursuant to the Takeovers Code.
- Evergrande (3333 HK) controls 51.71%. This suspension is either a precursor to a Scheme; or (more likely) cash-strapped Evergrande is exiting, potentially triggering an unconditional MGO.
- Evergrande, currently in liquidation, was delisted from the HKEx on the 25th August 2025 after failing to fulfil HKEx resumption guidance. The delisting was arguably symbolic, but remains a milestone.
Jilin Jiutai Bank (6122 HK): Take The Offer. It Is What It Is
- Back on the 3rd July 2025, Jilin Province Trust must a voluntary Offer at HK$0.70/share (~0.23x P/B!!) for troubled rural commercial bank Jilin Jiutai Rural Comm Bank (6122 HK).
- Shares have been suspended since 12th March. Jilin Jiutai have yet to publish their 2024 annual results. It’s doubtful shares will resume trading. Ever.
- The Composite Doc Booklet is now out, with a H-share class meeting on the 24th October, the same day as the first close. The IFA (Gram) says “fair & reasonable“.
Zijin Mining: Gold IPO De-Risks, Copper Upside Remains
- Dilution: The gold IPO trims attributable EBITDA by ~3% as minority interests rise.
- Parent Impact: Zijin parent emerges leaner, with net debt falling by US$4bn and copper now ~70% of EBITDA.
- Valuation: At ~7× EV/EBITDA, the stock offers 15–30% upside on our estimates, stretching to 25–45% at spot.
Zijin Gold IPO Valuation Analysis
- Our base case valuation of Zijin Gold suggests implied EV of US$40.4 billion and market cap of US$42.9 billion.
- Our EV/EBITDA valuation multiple of 14.3x is based on a 50% premium to the comps’ valuation multiple in 2026.
- We believe a 50% premium valuation to the comps’ average EV/EBITDA multiple is appropriate for Zijin Gold mainly due its higher sales growth, EBITDA margins, and ROE than the comps.
Chery Auto Pre-IPO – Thoughts on Valuation
- Chery Automobile is looking to raise about US$1.5bn 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.
Evergrande Services (6666 HK): Liquidation of Evergrande’s Stake to Trigger an Unconditional MGO?
- Evergrande Property Services (6666 HK) is in a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers which contains inside information of the Company.”
- The trading halt likely relates to Evergrande (3333 HK) liquidators’ efforts to sell Evergrande Group’s majority interest in Evergrande Services.
- The sale is likely to trigger an unconditional mandatory general offer. I estimate the potential offer price to be around HK$1.08 per share, a 17.8% premium to the last close.
Evergrande Property Services (6666 HK): Liquidators’ Auction
- In Evergrande Property Services (6666 HK): Offer Expected As Parent (Likely) Exits., I speculated on the outcome of Evergrande Property Services (6666 HK) (EPS)’s suspension due to the Takeovers Code.
- EPS has now announced that the liquidators for Evergrande (3333 HK) have been fielding non-binding Offers for Evergrande’s 51.016% stake in EPS. Final proposals are expected to be submitted by November.
- With a view to maximizing proceeds, the liquidators will ideally seek a sole bidder, leading to a change of control. And an unconditional MGO. Shares resume trading this morning.
China Medical System (867 HK) – From an 8 to a 16 FPE
- Since our initiation on 5 June 2024, China Medical Sytem’s share price is up 113% and the FPE has moved from less than 8 to close to 16 times.
- The gap valuation between US drug companies and CMS has largely closed with CMS trading at a premium to a number of US counterparts.
- The earnings outlook is largely flat since the initiation, implying the share price appreciation has been driven by a re-rating.
Genfleet Therapeutics IPO: Finely Placed at the Moment; RAS Inhibitors Hold Key to Future Growth
- Genfleet Therapeutics has filed for IPO to raise up to HK$1.6B. The company plans to sell 77.6M shares at HK$20.39 per share.
- Genfleet Therapeutics is a biopharmaceutical company focused on developing novel treatment options in the fields of oncology with its core products focused on niche RAS inhibitor segment.
- Genfleet is rightly placed to rapidly advance their innovative product pipeline to later stages of development and commercialize. Pipeline envisages sustainable long term growth prospect.
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