In today’s briefing:
- Weekly Deals Digest (18 May) – CATL, Hengrui, ESR, OneConnect, Mayne, Nissin, Nippon Road, TechnoPro
- HK Connect SOUTHBOUND Flows (To 16 May 2025); Volumes Pick Up, Net Flows Drop; Banks Still Strong
- CATL (3750 HK): Fast-Entry to Global Indices Unlikely Despite $150B Market Cap
- How Nexon (3659) Got Its Mojo Back
- ECM Weekly (19 May 2025) – CATL, Hengrui, Green Tea, SMPP, Unisound, Renesas, Genda, GMO, PayTM
- GMO Internet Placement: Extremely Overvalued at the Moment
- China – US: More US Restrictions on Chinese Firms, but Chinese Equipment Firms Are Growing Fast
- Liquid Universe of European Ordinary and Preferred Shares: May ’25 Report
- PC Monitor: Asus Results Warn of Coming Slowdown; PCs’ Next Edge AI Shift
Weekly Deals Digest (18 May) – CATL, Hengrui, ESR, OneConnect, Mayne, Nissin, Nippon Road, TechnoPro
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Contemporary Amperex Technology (3750 HK) and Jiangsu Hengrui Pharmaceuticals (1276 HK) launch H Share listings.
- Event-Driven developments: ESR Group (1821 HK), Oneconnect Financial Technology (6638 HK), Mayne Pharma (MYX AU), Nissin Corp (9066 JP), Nippon Road (1884 JP), Technopro Holdings (6028 JP).
HK Connect SOUTHBOUND Flows (To 16 May 2025); Volumes Pick Up, Net Flows Drop; Banks Still Strong
- Gross SOUTHBOUND volumes averaged more than HK$100bn a day this past week, which gets us back above halfway to the peak earlier this spring. Net flows were negative HK$8bn+.
- Among the top buys as a percentage of volume, financials, utilities, and energy REALLY stand out. Among top sells, industrials, info tech, and consumer discretionary are tops.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.
CATL (3750 HK): Fast-Entry to Global Indices Unlikely Despite $150B Market Cap
- CATL (3750 HK) is forecasted to fail the fast-entry float cap threshold of both global indices due to unlisted shares, locked cornerstone investors and domestic offering.
- Stock price needs to rise by ~30% on the first trading day to achieve fast-entry to one global index. Offer price is 263HKD and the adjustment option has been exercised.
- The security is expected to be added to Global Standard in August 2025 and to Global All-World in December 2025, with an elevated free float following the 6-month cornerstone lock-up.
How Nexon (3659) Got Its Mojo Back
- Nexon underperformed the software segment by 32% in the past 12 months, and analysts expect earnings to decline over the next 5 years.
- But the company beat Q1 consensus EBIT estimates.by 54% and the stock lurched 17% the very next day.
- Nexon’s business is immune to tariffs and tends to perform well in recessions. The company’s pipeline appears to be stronger than anyone imagined.
ECM Weekly (19 May 2025) – CATL, Hengrui, Green Tea, SMPP, Unisound, Renesas, Genda, GMO, PayTM
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, Contemporary Amperex Technology (CATL) (300750 CH) and Jiangsu Hengrui Medicine (600276 CH) will remain in the spotlight in the coming week as well.
- On the placements front, Japan deals appear to be picking up again.
GMO Internet Placement: Extremely Overvalued at the Moment
- GMO Internet Group (9449 JP) is looking to sell its 33.4% stake in its subsidiary GMO Internet (4784 JP) to meet free-float requirements.
- Shares are very overvalued at the moment and should be worth a mere fraction of its current trading value.
- We have looked at the company’s deal dynamics in our earlier notes. In this note, we discuss the firm’s outlook as well as valuation.
China – US: More US Restrictions on Chinese Firms, but Chinese Equipment Firms Are Growing Fast
- More US restrictions on export of SPE Semi Production Equipment to Chinese firms (CXMT, SMIC, YMTC). The big increase in Chinese spending was done over 2023-24, it’s declining in 2025-26.
- Chinese domestic SPE vendors are growing fast and gaining share from AMAT, LAM, TEL. ASML is a monopoly below 65nm. KLA is very dominant. Focus on best 2: ASML, KLA.
- China’s efforts to grow its own supply chain and equipment makers will continue, AMEC and Naura are the leaders. Consolidation could start.
Liquid Universe of European Ordinary and Preferred Shares: May ’25 Report
- Since mid-April, share price spreads have generally tightened across the European liquid universe of ordinary and preferred shares, with 10 tightening and 9 widening.
- The premium of non-voting, less liquid Handelsbanken B shares vs. A is at irrational highs (54.2%); the discount of Grifols B has tightened (Brookfield is again knocking at the door).
- Recommended trades long preferred/short ords: Atlas Copco, Grifols. Recommended trades long ordinary / short preferred shares: Henkel, SSAB Svenska Stal.
PC Monitor: Asus Results Warn of Coming Slowdown; PCs’ Next Edge AI Shift
- ASUS beat 1Q25 expectations, but flagged tariff risks and a potential PC demand slowdown in 2H25 as consumers front-load purchases ahead of pricing uncertainty.
- PC segment growth outperformed the market, led by >30% YoY gains in commercial PCs and strong momentum in AI-capable and gaming systems.
- On-Device AI execution is emerging as the next PC evolution; Asus is preparing for this shift with GX10 edge devices and deeper integration of AI across product lines.
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