Daily Brief Equity Bottom-Up: BHP (BHP AU) Vs. Rio Tinto (RIO AU): Stat Arb Pair Trade Opportunity in High Profile Aussie Miners and more

• Context: The BHP Group (BHP AU) vs. Rio Tinto (RIO AU) price ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
• Highlights: Going long BHP Group (BHP AU) and short Rio Tinto (RIO AU) targets a 4% return.
• Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.

• Xiaomi’s total revenue grew by 22% in 3Q25, which mainly came from the startup vehicle business.
• The company well controls the gross margin of the vehicle business.
• We believe XM has an upside of 60% for the yearend 2025.

• Revenue growth in Q3 (+15.5% Y/Y) held up reasonably well for Trip.com
• But core margins continue to deteriorate: Adjusted EBITDA margin down -120 bps Y/Y
• We still feel TCOM shares are pricey, and that earnings growth is unimpressive

• In 3Q25, total revenue increased by 16% YoY with hotel booking up by 18% YoY and transportation commission up by 12% YoY.
• Overseas travel continued to recover and consumption shrink does not impact TCOM much.
• We believe the stock has an upside of 29% for the next twelve months.

• AvePoint is a global subscription software company that helps organizations manage, protect and govern collaboration data sitting in cloud platforms such as Microsoft 365 and other SaaS tools.
• Its platform combines backup, data protection, governance and modernization so that customers can keep using these tools and newer AI features without losing control of security or compliance.
• In 2024 it generated US$330m of revenue, up 22% from 2023, with SaaS contributing roughly 70% of the total and recurring revenue 87%.

• Jiangsu Lopal Tech is undergoing a significant strategic pivot from its traditional automotive fine chemicals business to the high-growth, yet volatile, lithium iron phosphate (LFP) cathode materials market for electric vehicle (EV) batteries.
• This transition has fueled exceptional revenue growth but has also led to severe profitability challenges, with the company posting significant net losses and negative margins over the past two years, driven by raw material price volatility and intense competition.
• The company’s financial health is under pressure, evidenced by negative operating cash flow in recent periods and a net current liability position. Future success hinges on stabilizing LFP profitability, managing cash flow, and navigating the highly competitive dynamics of the EV supply chain.

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• Syrma SGS Technology is acquiring a 60% stake in Elcome Integrated Systems, with a path to 100% via performance-linked earn-outs, alongside Elcome’s simultaneous acquisition of Navicom Technology.
• This strategic move marks Syrma SGS’s formal entry into the high-barrier, long-cycle Indian defence electronics market, offering diversification from its core EMS business and aligning with India’s “Aatmanirbhar Bharat” initiative.
• The accretive nature, revenue visibility of over INR 400 crore, and design-led capabilities gained position Syrma SGS for a structural re-rating.

• Anjoy Foods Group (2648 HK)‘s rally since reporting 3Q25 results is prompted by solid revenue and margin recovery. Its HA discount has narrowed 6.1pp from IPO. 
• Sales model and geographical optimisation has driven business outlook. With projected EPS CAGR of 10.4%, it is now in line with the sector momentum.
• Its PEG of 1.4x is below peer’s average of 1.9x. With net cash equalling 15.1% of its share price, it can deliver a decent 5.4% FY26F dividend yield.

• Bright Horizons Family Solutions recently reported its third-quarter financial results, delivering strong performance with notable growth across its key service segments.
• Revenue increased by 12% to $803 million, driven by significant demand for its education and care benefits.
• Adjusted earnings per share rose by 41% to $1.57, exceeding the company’s expectations.

Datatec reported strong growth in underlying volume, gross profit and adjusted EBITDA in H126, driving a 43% year-on-year increase in underlying EPADR (uEPADR). The company has benefited from growing demand for cybersecurity and the start of technology refreshes driven by AI adoption. These structural growth drivers support a positive outlook for the remainder of FY26 and into FY27, with management sounding the most optimistic it has in recent years. We have upgraded our forecasts to reflect better operational performance and the positive demand environment, lifting uEPADR by 18.2% for FY26, 21.9% for FY27 and 24.6% for FY28.