In today’s briefing:
- Zijin Mining (2899 HK): Fully Valued Ahead Of (Expected) Gold Unit Spin-Off
- Quiddity Leaderboard Hang Seng Biotech Sep25: Three Changes Likely + One Intra-Review Change
- Quiddity Leaderboard HSTECH Sep25: 1 Low-Conviction Change + 1 FAF Revision; US$1.3bn One-Way
- Zhejiang Sanhua Intelligent Controls (2050 HK): Big Raise Supported by Cornerstones
- Everest Medicine Placement: Another Sell-Down by CBC, Some Caution Warranted
- Quiddity Leaderboard HSIII Sep25: Some Changes to Expectations; Trade Idea Successful
- CaoCao IPO: The Bull Case
- Chow Tai Fook (1929 HK): A Decent Rebound
- Eternal Beauty Pre-IPO – PHIP Updates – Perfumes Growing, Challenges Remain
- Fengxiang (9977 HK): PAG Invites Dissent After Scrapping Scrip Alternative
Zijin Mining (2899 HK): Fully Valued Ahead Of (Expected) Gold Unit Spin-Off
- Back on the 30th April 2025, Zijin Mining (2899 HK) said it planned to spin off its overseas gold mine assets on the Hong Kong exchange.
- The newly created unit, Zijin Gold International, owns/operates mines in South America, Central Asia, Africa and Oceania, including the Buritica project in Colombia, the nation’s largest gold mine.
- A Circular is now out concerning the spin-off, which is not subject to shareholder approval. Pegged to peers, Zijin appears fully valued.
Quiddity Leaderboard Hang Seng Biotech Sep25: Three Changes Likely + One Intra-Review Change
- The Hang Seng Biotech index (HSHKBIO) represents the 50 largest biotech companies listed in Hong Kong (HKEX).
- In this insight, we take a look at the potential index changes and the resultant capping flows for the HSHKBIO index rebal event in September 2025.
- Based on the latest data, we see three ADDs and three DELs.
Quiddity Leaderboard HSTECH Sep25: 1 Low-Conviction Change + 1 FAF Revision; US$1.3bn One-Way
- The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
- In this insight, we take a look at the potential index changes and the resultant capping flows for HSTECH index rebal event in September 2025.
- We see one low-conviction ADD/DEL and one significant float percentage revision which could collectively trigger roughly US$1.3bn in one-way index flows in September 2025.
Zhejiang Sanhua Intelligent Controls (2050 HK): Big Raise Supported by Cornerstones
- Zhejiang Sanhua Intellignt Controls Co. (002050 CH)‘s global offering opens today and the raise could reach up to US$1.4bn if the offer-size adjustment option and the overallotment option are exercised.
- There is a large allocation to cornerstone investors. The discount of around 22.7% to the A-shares is attractive given the recent trend for Midea (300 HK) and CATL (3750 HK).
- The H-shares should be added to Southbound Stock Connect in July, to the HSCI in September, and to a global index in December.
Everest Medicine Placement: Another Sell-Down by CBC, Some Caution Warranted
- Everest Medicines (1952 HK) aims to raise around US$150m in a secondary sell-down of shares conducted by CBC Group.
- This comes on the heels of a similar secondary sell down in Jan 2025, whereby CBC sold ~US$100m worth of stock, priced at a 10% discount.
- In this note, we comment on the deal dynamics and run the deal through our ECM framework.
Quiddity Leaderboard HSIII Sep25: Some Changes to Expectations; Trade Idea Successful
- 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 potential index changes and capping flows for HSIII index rebal event in September 2025.
- Based on the latest data, we see three ADDs and three DELs and one significant float percentage revision.
CaoCao IPO: The Bull Case
- CaoCao Inc (1646553D CH) is the second-largest ride-hailing player in China. It has filed its PHIP to raise US$200-300 million.
- CaoCao was incubated by Geely Auto (175 HK). Geely founder Li Shufu owns 83.9% of CaoCao.
- The bull case rests on accelerating GTV growth, the improving fundamentals of the core business, reducing losses and shifting to cash generation.
Chow Tai Fook (1929 HK): A Decent Rebound
- While Chow Tai Fook Jewellery (1929 HK) has a stellar share price performance YTD, it still lags the HSI since 2023. The solid 2H FY25 result should support further upside.
- SSS growth has recovered sharply in Apr-May 2025 (the first two months of 1Q FY26), and CTF should reap further benefits from cost management and product transformation.
- FY26F ROE may reach 27.2%. While its current yield is only 4.6%, it is possible to declare special dividend this year, easily pushing it to over 10%.
Eternal Beauty Pre-IPO – PHIP Updates – Perfumes Growing, Challenges Remain
- Eternal Beauty Holdings (EB) is looking to raise around US$150m in its upcoming Hong Kong IPO.
- Eternal Beauty is the largest brand management company of perfumes in the combined markets of Mainland China, Hong Kong and Macau, in terms of retail sales in 2023.
- We have looked at the company’s past performance in our previous note. In this note we talk about the PHIP updates.
Fengxiang (9977 HK): PAG Invites Dissent After Scrapping Scrip Alternative
- In an unusual move, the Offeror, PAG, and 59.42% shareholder of Shandong Fengxiang (9977 HK), has opted not to provide a scrip alternative, despite satisfying conditions to do so.
- The scrip option condition – not less than 0.5% of shares out expressing interest – was satisfied on the 12th May. Therefore at least 7.9mn shares got snubbed.
- Evidently PAG reckons the support for the scrip is not worth the trouble. Nor critical in mass to disrupt the Offer.
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