In today’s briefing:
- Gold Miners ETF (GDX US) Dec Rebalance: Zijin Gold Is a Miss; One Add Likely; US$4.1bn Trade
- Mandarin Oriental (MAND SP): Matheson’s Full Offer
- UK CPI Trips Into The Fall
- Palliser Capital Goes Activist on LG Chem
- Korea’s Next Policy Play: NAV Discount Squeeze on Low‑Float Large Caps
- SANY Heavy Industry H Share Listing (6031 HK): Valuation Insights
- UBTech Robotics (9880 HK): Global Index Inclusion Likely in November
- Sany Heavy Industry IPO Valuation Analysis
- WeRide Secondary HK Offering – Is Relatively Cheaper but Lacks Momentum
- CIG Shanghai A/H Listing: Smaller A/H Premium than Larger Peers, Expensive
Gold Miners ETF (GDX US) Dec Rebalance: Zijin Gold Is a Miss; One Add Likely; US$4.1bn Trade
- The VanEck Gold Miners ETF/USA (GDX US) transitioned from the tracking the NYSE Arca Gold Miners Index to the MarketVector Global Gold Miners Index in September.
- With float below 10%, Zijin Gold (2259 HK) should miss inclusion in the index in December, while Dundee Precious Metals (DPM CN) is a potential inclusion.
- There are big capping changes with estimated one-way turnover of 6.4% and a round-trip trade of US$4.1bn.
Mandarin Oriental (MAND SP): Matheson’s Full Offer
- A sale – partial or otherwise – of Mandarin Oriental International (MAND SP)‘s One Causeway Bay (OCB) was always on the cards. But I didn’t see an Offer coming.
- Concurrent with the sale of 13 floors of OCB to Alibaba (9988 HK), Jardine Matheson (JM SP) is seeking to take out MAND’s minorities at US$3.35/share by way of a Scheme.
- That’s a 52.3% premium to undisturbed, and a 53.7% premium to NAV. Unlike the 2021 Jardine Strategic (JS SP) Offer, Matheson is required to abstain from voting on this takeover.
UK CPI Trips Into The Fall
- UK inflation’s march higher ended early as expectations tripped over a drop in airfares to slow slightly in September, ahead of slightly falling back through the Fall seasonal.
- Weakness elsewhere cut the annualised median rate below 2% for the first time since March. That is likely to be a small soft spot relative to the worrying cumulative upside.
- Our forecasts remain close to or below the consensus until June, after other forecasts rose in last month’s survey. We still see wages stoking an excessive underlying trend.
Palliser Capital Goes Activist on LG Chem
- Palliser Capital started to go activist on LG Chem. According to Palliser Capital, LG Chem’s share price is trading at a 74% discount to its NAV.
- Palliser Capital proposed improving the composition of the board of directors, restructuring the executive compensation system to align with shareholder interests, and higher share buybacks.
- Our updated NAV analysis of LG Chem suggests implied price of 613,438 won per share, which represents a 57% higher levels than current levels.
Korea’s Next Policy Play: NAV Discount Squeeze on Low‑Float Large Caps
- Market sniffing policy push; low-float names flagged as junk risk with skewed control. Desks circling, Palliser hit early—LG Chem trade popped, timing spot on.
- Trade setup: screen >₩1tn caps with low float, parent stakes 60–80%. Policy push likely forces stake cuts, driving float higher and squeezing NAV discounts—LG Chem shows the play.
- Screening >₩1tn caps flags 11 names: parents hold 60–80%. All potential stake-sale plays to boost float, squeeze NAV discount.
SANY Heavy Industry H Share Listing (6031 HK): Valuation Insights
- Sany Heavy Industry (600031 CH), the world’s third-largest construction machinery company, has launched an H Share listing to raise US$1.6 billion.
- I discussed the H Share listing in SANY Heavy Industry H Share Listing: The Investment Case.
- The proposed AH discount of 17.2% to 13.1% (based on the 17 October A Share price) is attractive, and I would participate in the H Share listing.
UBTech Robotics (9880 HK): Global Index Inclusion Likely in November
- The increase in the stock price over the last 3 months could result in UBTech Robotics (9880 HK) being added to a global index in November.
- There is a fair amount to buy in the stock and cumulative excess volume has picked up since July. Short interest has dropped over the same period.
- The recent drop in the stock price provides a better entry point for a short-term trade as positioning builds up ahead of the potential passive buying.
Sany Heavy Industry IPO Valuation Analysis
- Our base case valuation of Sany Heavy Industry is target price of CNY21.1 per share. This represents 7.6% lower than current price of CNY22.83 per share.
- IPO price of Sany Heavy is expected to be set between HKD20.30 and HKD21.30. Our valuation analysis suggests lack of a meaningful upside for Sany Heavy Industry listing in HK.
- There are still lack of a major turnaround of the property market in China and this could continue to negatively impact the overall construction equipment market in China.
WeRide Secondary HK Offering – Is Relatively Cheaper but Lacks Momentum
- WeRide (WRD US) plans to raise around US$350m in its secondary listing in Hong Kong.
- The company won HK listing approval and filed its PHIP on 19th October 2025. It will look to launch its secondary offering soon.
- In this note, we’ll take a look at the deal and talk about the impact of the raising.
CIG Shanghai A/H Listing: Smaller A/H Premium than Larger Peers, Expensive
- Cig Shanghai (603083 CH), telecommunications equipment company, is looking to raise up to US$594m in its upcoming Hong Kong IPO.
- It is a provider of critical infrastructure components for the development of AI.
- In this note, we examine the IPO dynamics, and look at the firm’s valuation.
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