Daily Brief China: Zijin Mining Group Co Ltd H, Tencent, Everyday Network Co Ltd A, China Shengmu Organic Milk, EnjoyGo Technology, Semiconductor Manufacturing International Corp (SMIC), Wasion Group Holdings, Xuanzhu Biopharmaceutical, Shanghai Biren Intelligent Technology, Tibet Rhodiola Pharm A and more

• Zijin Gold (2259 HK) is up 101% on its 29th September listing. By my estimate, Zijin Mining (601899 CH)‘s average premium to NAV since Zijin Gold’s listing has been ~21%. 
• Preceding further commentary on Zijin Mining/Gold 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%.

• The revenue growth accelerated for the fourth quarter in 3Q25.
• In 3Q25, the gross margins of all business lines improved year over year.
• Tencent’s operating margin had improved year over year for thirteen quarters.

• There could be up to 7 adds and 4 deletes for the CSI All Share Real Estate Sector Index in December.
• Estimated one-way turnover is 3.8% at the rebalance leading to a round-trip trade of CNY 535m. There are a couple of stocks with over 0.5x ADV to trade.
• The forecast deletes have outperformed the forecast adds over the last 2 months and this is an attractive entry point as we near announcement date.

• Based on the Offer Price of HK$0.35, P/B is 0.69x. This valuation level is lower than the historical average and also has a certain discount compared to the industry average.
• CSM’s net profit may return to positive by 2026. After profitability returns to normal, its P/B ratio is expected to approach 0.8-1x at least. Then reasonable valuation level is HK$0.41-0.51/share.
• Since minorities representing 18.74% of CSM outstanding shares needs to tender to hit the “50% hurdle”, this brings uncertainties as the Offer Price may not be attractive to some minorities.

• EnjoyGo Technology (ENJG HK) (EGT) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by CICC and Guotai Junan.
• EGT, founded by automotive giant, SAIC Motor, is an all-scenario smart mobility platform in China, offering one-stop services covering ride-hailing, vehicle leasing, vehicle sales and Robotaxi services.
• According to Frost & Sullivan in 2024, EGT ranked fifth among ride-hailing platforms in China in gross transaction value and second among ride-hailing platforms in Shanghai in completed order volume.

• Revenue in 3Q25 was 7.8% higher than in 2Q25, in line with stronger seasonal demand. GM: 22.0% in 3Q25, compared with 20.4% in 2Q25 and 20.5% in 3Q24.
• The Company expects: Revenue Flat to up 2% quarter-over-quarter (QoQ). Gross Margin: Between 18% and 20%.
• SMIC’s stock price has risen 160.7% year-to-date in 2025, outperforming Taiwan Semiconductor (TSMC) – ADR (TSM US) at 44.2% and United Microelectron Sp Adr (UMC US) at 10.8%.

• Wasion Group is a leading Chinese provider of smart metering and energy efficiency solutions, well-positioned to benefit from domestic and global grid modernization trends.
• The company is experiencing accelerated growth, driven by China’s ‘dual carbon’ policy, strong investment in smart grids by state-owned utilities, and expansion into higher-growth areas like smart water/gas metering and international markets.
• Key risks include high customer concentration with Chinese state-owned utilities, potential for margin pressure from intense competition, and reliance on government policy direction.

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• Xuanzhu Biopharmaceutical is a clinical-stage biopharmaceutical company spun off from its controlling shareholder, Sihuan Pharmaceutical, with a pipeline focused on oncology, digestive diseases, and metabolic diseases.
• The company faces significant challenges, including intense competition for its core products, doubts about its commercialization capabilities highlighted by a previously failed IPO attempt, and a valuation considered demanding by market analysts.
• Future prospects are heavily reliant on the successful clinical development and approval of its pipeline assets, particularly in expanding indications for its commercialized products and advancing earlier-stage candidates.

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• Shanghai Biren Intelligent Technology (Biren) is a leading Chinese fabless semiconductor company, positioning itself as a key domestic alternative to global GPU leaders like Nvidia, particularly in the high-performance computing (HPC) and artificial intelligence (AI) sectors.
• The company’s flagship BR100 and BR104 GPUs showcase impressive technical specifications, designed to compete with established international offerings. However, its growth trajectory and production capabilities are severely constrained by its inclusion on the U.S. Entity List, which restricts access to advanced semiconductor manufacturing from foundries like TSMC.
• Heavily backed by state-affiliated investors, Biren is a strategic asset in China’s push for semiconductor self-sufficiency. The company is currently unprofitable and planning an Initial Public Offering (IPO) in Hong Kong to raise further capital.

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• Tibet Rhodiola Pharmaceutical Holding Co. is a prominent player in China’s traditional Chinese medicine (TCM) and broader pharmaceutical market, with a focus on biological products, Tibetan and Chinese medicines, and chemical drugs. The company has demonstrated a strong growth trajectory, underscored by a significant increase in net income and dividends over the past three years.
• The company’s strategic focus on high-margin products is evident from its consistently high gross margins, which have remained above 92% in recent years. This, coupled with robust operating cash flow, positions the company well for future investments in research and development and potential market expansion.
• Operating within the rapidly growing Chinese pharmaceutical and TCM markets, the company is poised to benefit from favorable demographic trends, increasing health consciousness, and government support for the TCM industry. However, it faces risks related to regulatory changes, market competition, and the need for continuous innovation.

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