In today’s briefing:
- CSI Hong Kong Connect Internet Index Rebalance: 10 Changes & Big Impact
- Toyota Industries (6201 JP): Thoughts on Intrinsic Value
- MINISO (9896 HK)’s (Possible) TOP TOY Spin-Off Is Priced In
- [Japan M&A] Hino & Mitsubishi-Fuso Truck to Join; Bagholding Ugly for Minorities, and a Re-IPO
- More Accurate Context Behind Tencent’s Nexon Moves Reported by Bloomberg
- Zijin Mining (2899 HK): Fully Valued Ahead Of (Expected) Gold Unit Spin-Off
- UK: Retreating To Trend Again
- Quiddity Leaderboard Hang Seng Biotech Sep25: Three Changes Likely + One Intra-Review Change
- Zhejiang Sanhua Intelligent Controls (2050 HK): Big Raise Supported by Cornerstones
- Everest Medicine Placement: Another Sell-Down by CBC, Some Caution Warranted
CSI Hong Kong Connect Internet Index Rebalance: 10 Changes & Big Impact
- There are 5 constituent changes for the CSI Hong Kong Connect Internet Index in June. Plus there are capping changes for some stocks.
- A lot of the adds have moved significantly in the last couple of days, so the impact over the next couple of days will be smaller.
- There could be opportunities to trade the reversion strategy. Getting borrow may not be easy on some names.
Toyota Industries (6201 JP): Thoughts on Intrinsic Value
- Several investors have sharply criticised Toyota Industries (6201 JP)’s preconditional tender offer from Toyota Fudosan. Oasis is pushing for a higher offer.
- The offer has several issues that are detrimental to minorities’ interests. The key grievance is that it is below TICO’s intrinsic value.
- Due to TICO’s varied business units, SoTP valuation is the most appropriate methodology. My analysis suggests a base case intrinsic value of around JPY19,000.
MINISO (9896 HK)’s (Possible) TOP TOY Spin-Off Is Priced In
- Three months ago, local media reported that Chinese lifestyle retailer MINISO Group Holding (9896 HK) was considering spinning off its collectible toy unit TOP TOY on the Hong Kong exchange.
- Reportedly, MINISO could raise ~US$300mn from an IPO. MINISO has now confirmed that a spin-off is being contemplated; although a proposal is only at a preliminary stage.
- TOP TOY has been a growth engine. But its contribution to the group is still ~6%. Applying a holding company discount, post spin-off, MINISO’s upside appears limited.
[Japan M&A] Hino & Mitsubishi-Fuso Truck to Join; Bagholding Ugly for Minorities, and a Re-IPO
- On the 10th of June, Toyota Motor (7203 JP) subsidiary Hino Motors Ltd (7205 JP) and Mitsubishi-Fuso Truck & Bus Company announced their long-awaited integration plans. We have a deal.
- An agreement was signed in 2023, but Hino got in big trouble for falsifying testing data on gasoline engine emissions/efficiency. Hino took a hit in 2023, then 2025. Talks advanced.
- The deal announced suggests Toyota has thrown itself and Hino minorities under the proverbial Fuso bus. It’s VERY odd. But… it deserves a look because 2026 will see a re-IPO.
More Accurate Context Behind Tencent’s Nexon Moves Reported by Bloomberg
- Government aims to sell 30.6% NXC stake by 2027 for ₩4T tax revenue, offering NXC a buyback or selling with management control to attract bidders.
- The family won’t buy back the 30.6% stake but may allow partial management rights, with Tencent eyeing that stake—not a full $15B Nexon buyout as Bloomberg suggested.
- Tencent’s targeting that stake chunk only, no control shift, so no mandatory tender offer triggered—at least for now.
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.
UK: Retreating To Trend Again
- Residual seasonality shocked the consensus again, this time on the downside, as the spurious surge is replaced with stagnation for the rest of the year in our view.
- The 0.3% m-o-m decline dragged GDP back toward its trend, wiping out the highly supportive statistical carryover effect for Q2, which we now forecast at 0.1% q-o-q.
- BoE forecasts are on track, allowing the MPC’s bias to slow easing to materialise with a pause. We expect cuts to keep being rolled later, with no more delivered in this cycle.
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.
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.
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