In today’s briefing:
- Sony Financial (8729 JP) Spinoff from Sony Group (6758 JP): Potential Index Flows
- Zijin Gold (2259 HK) IPO: HSCI Fast Entry; Quick Stock Connect Add; Global Indices Entry in 2026
- Chery Auto (9973 HK) IPO: No Inclusion in Global Indices; HSTECH Is Interesting
- HK Connect SOUTHBOUND Flows (To 19 Sep 2025); BIG Single Stock Trading Again, Feels Slightly Toppish
- Chery Auto IPO Valuation Analysis
- Korea Semicon ETF Rebal October Play: 2 In, 2 Out Long-Short Setup
- Zijin Gold International (紫金黄金国际) – Quality-Weighted Forward Valuation & Benchmarking
- OneConnect (6638 HK/OCFT US): 28th October Vote On Ping An’s Offer
- Kingsoft Cloud Placement: Second Primary Offering This Year
- OneConnect Financial (6638 HK/OCFT US): Scheme Vote for Below Net Cash Offer on 28 October
Sony Financial (8729 JP) Spinoff from Sony Group (6758 JP): Potential Index Flows
- The ex-date for Sony Financial Group (8729 JP)‘s spinoff from Sony Corp (6758 JP) is 29 September. There will be passive flows at the close on the day.
- There will be no selling from the TOPIX Index and Fglobal trackers. There will be selling from Nikkei 225 (NKY INDEX) trackers and potentially from Mglobal trackers.
- Sony Financial Group (8729 JP) has announced a buyback of up to 1bn shares (13.99% of shares out) over the next year and that will support the stock.
Zijin Gold (2259 HK) IPO: HSCI Fast Entry; Quick Stock Connect Add; Global Indices Entry in 2026
- Zijin Gold (2259 HK) is looking to raise up to HK$28.7bn (US$3.7bn) in its IPO, valuing the company at HK$191.6bn (US$24.6bn).
- Zijin Mining (2899 HK) will hold between 85-86.7% of Zijin Gold and that will limit the free float of the stock. Half the IPO has been allotted to cornerstones.
- Zijin Gold could be added to the HSCI via Fast Entry and to Stock Connect in October. Global index inclusion should take place in the first half of 2026.
Chery Auto (9973 HK) IPO: No Inclusion in Global Indices; HSTECH Is Interesting
- Chery Automobile Co. Ltd. (9973 HK)‘s IPO range is HK$27.75-HK$30.75/share and will raise up to HK$10bn (US$1.3m) if the oversubscription option is exercised, valuing the company at HK$169bn (US$21.7bn).
- The stock should be added to the HSCI Index in December and that will make the stock eligible for inclusion in Southbound Stock Connect.
- There will be no inclusion in global indexes for the next year, but there is a possibility of inclusion in the Hang Seng TECH Index (HSTECH INDEX) in December.
HK Connect SOUTHBOUND Flows (To 19 Sep 2025); BIG Single Stock Trading Again, Feels Slightly Toppish
- Gross SOUTHBOUND volumes just over US$22+bn a day this past 5-day week. Biggest week in a while. Net Flows not following gross flows. Feels toppish into GW.
- The recommended name last week was Alibaba (9988 HK) was up 2.2% on the week but only +0.7% from Monday close to Friday.
- The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Pairs Monitor are both there for all SK readers.
Chery Auto IPO Valuation Analysis
- Our base case valuation of Chery Auto is target price of HKD 40.6 which is 32% higher than the high end of the IPO price range.
- Our base case valuation is based on EV/EBITDA of 5.9x our estimated EBITDA of 37.1 billion RMB in 2026. Our target multiple is 30% premium to the comps’ average multiple.
- We have chosen to use a premium valuation multiple mainly due to Chery Auto’s higher ROE, sales growth, and net margins vs the comps.
Korea Semicon ETF Rebal October Play: 2 In, 2 Out Long-Short Setup
- MTD screening results with 5 trading days left point to 2 names going out and 2 names coming in: Gemvax and Wonik IPS replace Dongjin Semichem and Jusung Engineering.
- Unlike last April’s tariff-distorted +1.3% rebalance, this time we expect cleaner, more meaningful price action.
- No pre-positioning seen, so I’ll target ETF rebalance day (Oct 10) and maybe take an anticipatory position a day earlier.
Zijin Gold International (紫金黄金国际) – Quality-Weighted Forward Valuation & Benchmarking
- Quality-Weighted upside: IPO priced at ~8× EV/EBITDA (~US$24bn EV) but forward valuation points to ~US$38.5bn EV (~HK$121/sh), implying ~70% upside at spot gold.
- Portfolio strength: Over 55% of 2027E EBITDA is anchored in world-class assets (Ghana, Buriticá, Raygorodok), positioning Zijin ahead of peers that deliver flat growth.
- Stronger case than Sep 19 preview: incorporates the reserves uplift (~35 Moz vs. ~27 Moz), clearer project ramps, confirmed cornerstone demand, and new angles via asset benchmarking and quality-weighted valuation.
OneConnect (6638 HK/OCFT US): 28th October Vote On Ping An’s Offer
- I was way off on timing. After the pre-cons were satisfied on the 9th July, I thought Ping An’s Offer for Oneconnect Financial (6638 HK) could feasibly wrap up around now.
- A draft Scheme Doc was released on the 18th July. The IFA (Gram Capital) said fair & reasonable.
- The Scheme Document is now out, with a Court Meeting on the 28th October and expected payment around the 28th November.
Kingsoft Cloud Placement: Second Primary Offering This Year
- Kingsoft Cloud Holdings (3896 HK) is looking to raise around US$304m in a primary placement.
- The company will use the proceeds to support its AI business, including infrastructure expansion and enhancement of cloud services.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
OneConnect Financial (6638 HK/OCFT US): Scheme Vote for Below Net Cash Offer on 28 October
- Oneconnect Financial Technology (6638 HK)’s IFA opines that Ping An Insurance (H) (2318 HK)’s HK$2.068 (US$7.976 per ADS) offer is fair and reasonable. The vote is on 28 October.
- The offer is below net cash, and the FCF burn is modest. Ping An is privatising OneConnect just as its revenue declines end (due to the discontinued cloud business).
- The high minority participation rate and protest votes at the recent AGM are warning signs that the scheme vote is high risk. This setup is best avoided.
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