In today’s briefing:
- Zijin Gold (2259 HK) IPO: HSCI Fast Entry; Quick Stock Connect Add; Global Indices Entry in 2026
- CATL (3750 HK): Cornerstone Lock-Up Expiry, Passive Flows, H/A Premium
- [Japan Activism/M&A] – Closing In On the Tsuruha Partial Tender – Likely Needs To Be Higher
- Ganfeng Lithium (1772 HK): Global Index Inclusion, Outperformance & The A/H Trade
- Friendshoring Aussie Rare Earths
- Smartkarma Corporate Webinar | Elite UK REIT: Counter Cyclical Portfolio, Attractive Yields
- UK: Unseasonably Resilient In Q3
- EA: Inflation Rises Briefly In The Fall
- HEW: Cockroaches Startle Pricing
- Soft99 Corp (4464 JP): Could the MBO Revised Offer Get the Job Done?
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.
CATL (3750 HK): Cornerstone Lock-Up Expiry, Passive Flows, H/A Premium
- CATL (3750 HK) listed in May by selling 135.579m shares (including the Offer Size Adjustment Option) at HK$263/share. The overallotment option of 20.337m shares was also exercised in full.
- Nearly 50% of the IPO shares were allotted to cornerstone investors. The lock-up on those investors ends on 19 November. That increases float and will bring in passive flows.
- CATL (3750 HK) is trading at a big premium to CATL (300750 CH) and that could start to move lower as the number of free float shares increases.
[Japan Activism/M&A] – Closing In On the Tsuruha Partial Tender – Likely Needs To Be Higher
- The merger between Tsuruha Holdings (3391 JP) and Welcia Holdings (3141 JP) will go through in about 6 weeks. In the interim, there are interesting events.
- After, there is a Partial Tender Offer. I expect Aeon Co Ltd (8267 JP) will have to pay up.
- Furthermore, the stock is not overly expensive vs Peers AND there are synergies to come from the merger, making it relatively cheaper. It’s not squeezy, but it’s skewed.
Ganfeng Lithium (1772 HK): Global Index Inclusion, Outperformance & The A/H Trade
- Ganfeng Lithium (1772 HK)‘s stock price has surged over the last 6 months, and the higher free float market cap should result in global index inclusion in November.
- Ganfeng Lithium (1772 HK) has outperformed its peers and is trading at higher valuations on most metrics. Tianqi Lithium (9696 HK) is trading a lot cheaper.
- The Jiangxi Ganfeng Lithium (002460 CH) / Ganfeng Lithium (1772 HK) premium has drifted lower and there could be a move higher as we near index inclusion.
Friendshoring Aussie Rare Earths
- As discussed in my April note Know Your Rare Earth Elements As China Restricts Exports, China escalated restrictions on the export of rare earths – to all countries.
- Last week, China ramped up export controls on five additional rare earths; in tandem with related technologies.
- The US recently struck a deal MP Materials (MP US) on light rare earths. The possibility of the US taking equity stakes in Australian processing projects could become a reality.
Smartkarma Corporate Webinar | Elite UK REIT: Counter Cyclical Portfolio, Attractive Yields
For our next Corporate Webinar, engageIR by Smartkarma is glad to welcome Elite UK REIT (ELITE SP)’s team to Smartkarma. We will be joined by their Chief Executive Officer, Joshua Liaw, Chief Investment Officer, Jonathan Edmunds, and Chief Financial Officer, Michael Tong, along with Smartkarma Insight Provider Garreth Elston.
In the upcoming webinar, the Elite UK REIT team will share a short company presentation after which they will engage in a fireside chat with Garreth. The Corporate Webinar will include a live Q&A session.
The Corporate Webinar will be hosted on Tuesday, 11 November 2025, 18:00 SGT.
About Elite UK REIT
Elite UK REIT (“Elite REIT” (“英利房托”)), is a UK REIT listed in Pound sterling on the Singapore Exchange and managed by Singapore-headquartered Elite UK REIT Management Pte. Ltd. (the “Manager”).
Elite REIT’s Sponsors are Elite Partners Holding Pte. Ltd. (“EPH”), the holding firm for Elite Partners Group, an alternative investment and asset manager; and Ho Lee Group Pte. Ltd., a real estate and construction conglomerate.
Elite REIT’s portfolio comprises mostly freehold properties strategically located mainly in town centres, and near amenities and transportation nodes. With its portfolio, Elite REIT is one of the largest providers of critical social infrastructure to the Department for Work and Pensions and other UK Government departments. As at 30 June 2025, Elite REIT’s portfolio has a total asset value of £421.5 million.
For more information on Elite UK REIT, please visit https://www.eliteukreit.com/
UK: Unseasonably Resilient In Q3
- Slight growth in August sustains an above trend level of activity and is tracking to a 0.2% q-o-q pace for Q3, matching our forecast and the consensus, but disappointing the BoE.
- The ongoing slowdown in service sector activity repeats residual seasonality that would leave a trough in two months, but there is slightly more resilience this year.
- Policymakers shouldn’t react to statistical noise, and are unlikely to amid ongoing excesses in underlying inflation that a stabilising labour market wouldn’t break.
EA: Inflation Rises Briefly In The Fall
- Inflation’s rise to a high 2.3% in September was confirmed in the final print, although some payback remains likely in October. We doubt it goes fully back to the target then.
- Underlying inflation metrics were broadly stable again at about 2.5%, with little progress in most statistical measures for over a year.
- There is little cause for alarm at this stage, so the ECB can keep waiting in a good place, but we still see a greater risk of hikes than cuts in 2026.
HEW: Cockroaches Startle Pricing
- Losses on bad and fraudulent US loans raise the risk that more cockroaches will emerge, nourished by monetary policy stimulating asset prices outside of recessionary regimes.
- Market rates fell on this, while macro data didn’t offer direction as UK Q3 GDP kept tracking 0.2%, EA inflation was confirmed, and UK labour market data were mixed.
- Next week’s UK inflation data should reveal a rise, with the CPI reaching 4%. Delayed US CPI data will provide a rare signal more relevant to the Fed’s likely decision to cut.
Soft99 Corp (4464 JP): Could the MBO Revised Offer Get the Job Done?
- The Soft99 Corp (4464 JP) MBO offer price has been increased by 8.7% to JPY2,680, an 18.8% discount to the last close and a 34.6% discount to the Effissimo offer.
- Ostensibly, the offer was revised based on requests from some shareholders to increase the offer price and for it to exceed the book value of JPY2,653 (implying P/B of 1.01x).
- The latest update points to modest withdrawals of non-KeePer acceptances. Effissimo continues to face an uphill task, and the revised MBO offer increases the odds of success.
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