In today’s briefing:
- Zomato/Eternal: Lower Foreign Ownership Limits & The BIG Passive Selling
- HK Connect SOUTHBOUND Flows (To 18 Apr 2025); Buying of Internet, SOEs, and ETFs Previously Sold
- Chagee Holdings – Thoughts on the IPO Debut and the Valuation Outlook
- Aeon’s Plans to Absorb Aeon Mall and Aeon Delight Will Help Margin Growth
- HSCEI Index Options Weekly (Apr 14-17): Key Strike Rejected, Volatility Recalibrates
Zomato/Eternal: Lower Foreign Ownership Limits & The BIG Passive Selling
- Zomato (ZOMATO IN), now Eternal, listed in July 2021 with a Foreign Ownership Limit (FOL) of 100%. Since listing, foreign ownership has dropped from over 70% to just under 45%.
- Eternal is looking to cap foreign ownership at 49.5% to continue qualifying as an Indian-Owned-and-Controlled Company. That will give the company greater operational flexibility, especially for inventory ownership.
- The FOL decrease will result in selling from passive global index trackers. With the stock 23.5% off its highs and a steady increase in futures open interest, covering could ensue.
HK Connect SOUTHBOUND Flows (To 18 Apr 2025); Buying of Internet, SOEs, and ETFs Previously Sold
- Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. The first three weeks in April were HK$168bn.
- Gross and net flows this week subsided quite substantially compared to previous weeks.
- We are in a post-tariff breather as the US says the ball is in China’s court and China looks like it will wait things out. Port volumes are telling.
Chagee Holdings – Thoughts on the IPO Debut and the Valuation Outlook
- Chagee may think that US IPO will help it gain greater imagination space/higher valuation. Although the tariff war is “a big surprise”, conservative IPO pricing still secure a good debut.
- If Chagee can successfully achieve internationalization and reverse the trend of declining performance, its market value could reach US$10.9 billion. However, Chinese concept stocks would still face valuation discounts.
- If same store GMV fails to stabilize, or overseas market penetration is lower-than-expected, or conflict between China and the US escalates, share price would face correction, with valuation falling below Starbucks.
Aeon’s Plans to Absorb Aeon Mall and Aeon Delight Will Help Margin Growth
- Aeon will turn Aeon Mall and its facilities management business, Aeon Delight, into subsidiaries.
- The move is part of plans to rationalise and inject new momentum into its shopping building business, including new types of neighbourhood mall.
- It will also use Aeon Mall’s overseas network to scout for promising tenants for its malls and GMS stores.
HSCEI Index Options Weekly (Apr 14-17): Key Strike Rejected, Volatility Recalibrates
- A weekly recap of volatility and price metrics, including option volumes, volatility trends, the spot/implied relationship, and open interest statistics.
- Volatility pulled back but may have simply entered a holding pattern—parallels to stimulus induced rise and fall are explored.
- Volumes dropped sharply from last week’s Call induced surge, as the market approached—but failed to clear—a key strike.
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