Daily Brief China: Zijin Gold, MINISO Group Holding , DiDi Global, Nova Insight, Evergrande, Netdragon Websoft, Sunny Optical Technology Group and more

• Zijin Gold (2259 HK) priced its IPO at HK$71.59 per share to raise gross proceeds of approximately US$3.2 billion. The shares will begin trading on September 30.
• The IPO was discussed in Zijin Gold IPO: The Investment Case and Zijin Gold IPO (2259 HK): Valuation Insights.
• The market sentiment of the peers has increased since the IPO launch. My analysis suggests that the IPO price range is attractive.

• In MINISO (9896 HK)’s (Possible) TOP TOY Spin-Off Is Priced In, based on (then) available figures and applying a holding company discount, post spin-off, MINISO’s upside appeared limited.
• A listing application form has now been submitted to the HKEx, providing greater detail of TOP TOY’s finances, figures vastly different to those in MINISO’s recent segment accounts. 
• The Labubu craze has resulted in a ~200% increase in Pop Mart (9992 HK)’s shares YTD. TOP TOY will be wanting to cash in on this exuberance. 

• Based on DCF model, valuation is about US$28.4 billion. We think this is the valuation bottom line. Conservative investors can take profits at this valuation level.
• Valuation has the potential to reach US$34-42bn (or 18-22x P/E ) if based on 2025 forecast.Optimistic investors can choose to wait for stock price to fall within this valuation range. 
• Considering better profitability/shareholder resources, Zijin Gold has more advantage than Shandong Gold Mining. Therefore, market value of Zijin Gold will widen the gap with Shandong Gold Mining in the future.

• Riding on strong investor demand, Zijin Gold (2259 HK)  has exercised its over-allotment option, boosting the total IPO size to USD 3.7 billion from USD 3.2 billion previously.
• As Hong Kong’s only pure-play gold miner with global exposure, Zijin Gold may command a premium, though any sharp price gains still depend on sustained gold price strength.
• Investors should define their medium- to-long-term gold price thresholds to shape a clear post-IPO strategy for Zijin Gold.

• Zijin Gold (2259 HK) raised around US$3.2bn in its Hong Kong IPO.
• It is a global leading gold mining company formed by combining all of the gold mines of Zijin Mining, located outside of China.
• We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

Key points (machine generated)

• Didi’s stock price is stable at $4.90, adhering to management guidance for eight months.
• Concerns about autonomous driving in China arise due to low labor costs and a deflationary environment, impacting regulatory responses.
• Didi is well-positioned for partnerships with AV companies, while Tesla faces regulatory challenges in operating a ride-hailing service in China.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Nova Insight (INS HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by JP Morgan and HSBC.
• Nova Insight is the largest independent AI technology company in the insurance industry in China.
• As of Dec 31, 2024, Nova’s solutions have been cumulatively adopted by 90 insurance companies, including eight of the top ten insurance companies in China.

• Evergrande is a defunct Chinese property developer that was once the second-largest in China by sales. Its collapse in 2021 triggered a major crisis in the country’s real estate sector.
• The company is currently undergoing liquidation after a Hong Kong court order in January 2024, following its failure to present a viable restructuring plan for its massive debt, which exceeded $300 billion.
• The future for Evergrande‘s stakeholders is highly uncertain, with offshore creditors facing a bleak outlook for recovery. The company’s situation highlights significant corporate governance failures and systemic risks within China’s property market.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

• Netdragon is a prominent player in China’s online gaming and mobile internet sectors, with a growing international presence in the education technology market.
• The company is strategically pivoting towards the integration of Artificial Intelligence (AI) in both its gaming and education segments, aiming to enhance user experience and operational efficiency.
• Despite recent revenue declines and market volatility, Netdragon maintains a strong dividend yield and has an active share buyback program, signaling management’s confidence in its long-term strategy.

This content is AI-generated and displayed for general informational purposes only. Please verify independently before use.

Founded in 1984, Sunny Optical Technology is a leading global integrated optical-component manufacturer. It was the largest global vehicle lens-set producer in 2024 with a market share of 32.3%, the largest global handset lens-set producer (30.8% market share) and the largest global handset camera-module producer (12.1%). The company has been listed on the Hong Kong Stock Exchange since 2007. The largest shareholder is Sun Xu Limited with a 35% stake, while 65% is publicly held. Founder Wang Wenjian and the Sunny Group Employee Offshore Trust own and control Sun Xu Limited.