China Archives | Page 10 of 199 | Smartkarma

• 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: Chery Automobile (9973 HK), Zijin Gold (2259 HK) and Centurion Accomodation REIT (CAREIT SP) IPOs. 
• Event-Driven developments: Soft99 Corp (4464 JP), Mandom Corp (4917 JP), ANE Cayman Inc (9956 HK), Jinke Smart Services (9666 HK), Shengjing Bank Co Ltd H (2066 HK). 

• 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, Zijin Gold appears to be shining bright.
• On the placements front, it was a relatively quiter week, as compared to some of the more recent weekly flows.

• Context: Volatility cones provide a straightforward framework to evaluate whether options are trading cheap or rich.
• Highlights: Implied volatility has broadly risen across most, but not all, HK stocks. Front-month expiries remain historically cheap amid a steepening curve. Opportunities endure, though fewer than in recent weeks.
• Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.

• Concerted rate increase on Sept 1 failed, deep sea rates are still falling
• Carrier revenues in July-August down ~40% Y/Y, W Coast volumes weak
• We retain our -ive view on container shipping, seek opportunities to Short

• Although high gold price helps drive revenue growth as Hipine generally adjusts selling prices, consumer sentiment and demand for purchasing non-essential items such as precious metal watch would be suppressed.
• The biggest challenge is that ceiling in gold watch industry is not high. It’s not easy to create new imagination space in a segmented market, which would affect valuation expansion.
• Due to the concerns on the future growth potential and profitability, we’e not optimistic about the outlook of Hipine. We think the valuation of Hipine could be lower than peers.

• On 19 September, Boyu completed the auction share transfer to take its Jinke Smart Services (9666 HK) shareholding to 55.91% of outstanding shares.
• Pursuant to Rule 26.1 of the Takeovers Code, Boyu is required to make a mandatory unconditional general offer at HK$6.67. The offer should open by 26 September.
• The offer price is unattractive, suggesting a low chance of breaching the public float requirements (23.4% of outstanding shares). At the last close, the gross/annualised spread is 0.9%/10.0%.

• Zijin Gold (2259 HK) is a global leading gold mining company and the overseas gold segment of Zijin Mining Group (601899 CH). It has launched an HKEx IPO to raise US$3.2bn.
• I previously discussed the IPO in Zijin Gold IPO: The Investment Case and Zijin Gold IPO: PHIP Updates Support the Investment Thesis.
• In this note, I present my forecasts and valuation. My analysis suggests that the IPO price range is attractive.

• At current valuation level, leading biotech listed in Hong Kong have generally “overdrawn” their performance for the next 1 to 3 years. So, it is time to consider taking profits.
• TransThera’s shares have been highly volatile following their inclusion in several innovative-drug ETFs. We analyzed the drivers behind this move. With valuation now diverging from fundamentals, we advise caution.
• The fluctuations of Duality’s shares were driven by the inclusion of HSCI. However, some funds chose to take profits at high stock prices, thus Duality is under pressure of correction.

• Zijin Gold (2259 HK)‘s IPO is, arguably, priced reasonably. Yet, no matter how you slice it, Zijin Mining Group Co Ltd H (2899 HK) has overshot the mark.
• KKR’s lock up in Kokusai Electric (6525 JP) expires in less than three weeks. It’s not ideal stepping in front of fast-moving trains, so challenging to recommend a full-throated short.
• Abu Dhabis’ ADNOC walks away from Santos Ltd (STO AU). That was, realistically, the most likely outcome.

• The ChiNext index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
• The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
• We see 7 changes for the ChiNext index and 5 changes for the ChiNext 50 index in the next index rebal event.

• HSI tested new highs before fading, as weak breadth and strong option volumes highlighted diverging signals in Hong Kong equities.
• Technically, HSI may have reached a level from which minor corrections have started.
• Option trading activity surged, reaching its busiest day since November, even as overall market momentum faltered.

• IPO leaves upside on the table: Priced at HK$71.6/sh (~US$24.1bn EV), Zijin Gold lists at ~8× 2026E EV/EBITDA — in line with peers despite offering far stronger growth.
• Fastest-Growing gold major challenger: Output set to rise ~20% CAGR to 2027E (2.1Moz), versus flat-to-low growth for Newmont, Barrick, and peers.
• Fair value HK$95/sh (+33%): Base case target on 2026E EBITDA at 8× peer multiple; risks include gold price volatility, execution of Wassa/Sepon/Raygorodok ramps, and governance overhangs.

• STAR 50 Index is a tech-focused, blue-chip index in Mainland China which tracks the top 50 largest and most liquid names in the STAR market of the Shanghai Stock Exchange.
• STAR 100 index tracks the next 100 names (51st-150th ranks) and it represents the mid-cap segment of the STAR market.
• In this insight, we take a look at the potential ADDs/DELs for the STAR 50 and STAR 100 indices for the December 2025 index rebal event.

• Back on the 28th April 2025, PRC-incorporated property management play Jinke Smart Services (9666 HK)  announced a possible unconditional MGO take-under at HK$6.67/share. 
• The Boyu-backed Offeror and Concert Parties holding 37.86% (at the time), bought Jinke Property (000656 CH)‘s 18.05% stake at auction on the 30th March, triggering an unconditional MGO (once completed). 
• The “Auction Transfer” was subject to CSDC oversight, which has now been satisfied/completed. The Composite Doc is expected to be dispatched on or before the 26th September. 

• Iron ore fell as weakening Chinese economic activity, shrinking steel demand, and rising mill maintenance dampened production and demand outlook.
• Managed Money participants continue to increase their net long exposure, signalling renewed bullish sentiment and expectations of stronger demand and price gains.
• Bearish MACD crossover and Bollinger Bands pullback signal weakening momentum, highlighting growing selling pressure and short-term downside risk.

• In our previous insight from September 2 we suggested if BYD (1211 HK) reached 102 could have been a good BUY signal. 
• It took a bit more than a couple of week for the stock to bottom at 102.80 (this week), then rally 10%  to 113.50. Impressive, but….
• … it could be a Bear rally, so in this insight we will try to assess BYD upside potential, and suggest some tactical positioning for the next few weeks.

• Medcaptain Medical Technology (MMT) is looking to raise about US$100m in its upcoming Hong Kong IPO. The deal will be run by Morgan Stanley and Huatai International.
• Medcaptain Medical Technology is a global medical solution provider specializing in life support, minimally invasive intervention, and in vitro diagnostics. 
• Its products are widely used across hospitals, clinics, testing facilities, and home care scenarios, addressing the needs of critical care, surgery, and diagnostics.

• 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.

• CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
• In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in December 2025.
• Currently, we see 11 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.

• ANE Cayman (9956 HK), a road freight transportation play, is suspended pursuant to the Takeovers Code.
• PE outfit Centurium Partners, a pre-IPO investor, holds 24.6%. Two senior management – past & present – hold a further 20.2%. 
• ANE’s share price is up 29% YTD, but 27% adrift of its November 2021 IPO price. 

• Luxshare Precision Industry (002475 CH) (LP), a precision intelligent manufacturer, aims to raise around US$2bn in its H-share listing.
• LP provides cross-sector, vertically integrated development and intelligent manufacturing solutions—from components and modules to systems—for global clients across consumer electronics, automotive electronics, communication and data centers, and other end markets.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• Genfleet raised HKD 1819m (USD 233m) from its global offering and will list on the Hong Kong Stock Exchange on Friday, September 18th.
• In our previous note, we looked at the company’s operation, management track records and discussed the IPO valuation.
• In this note, we provide an update for the IPO before trading debut.

• 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.

• ANE Cayman Inc (9956 HK) is on a halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers which contains inside information of the Company.” 
• I expect the halt is related to a potential privatisation bid from either a trade buyer, such as one of the Tongda operators, or an MBO sponsored by Centurium Capital.
• I use several methods to triangulate the likely offer price, which suggests a range of HK$11.34-11.80 per share, with an average of HK$11.55, a 14% premium to the last close.

• Butong Group is looking to raise up to US$100m in its upcoming Hong Kong IPO.
• Butong has been able to achieve strong topline momentum of 57% CAGR from FY22 to FY24, whilst expanding its margins. 
• We have looked at the company’s past performance in our previous note. In this note, we talk about valuations.

• After sinking to 10-year lows in January,  Health And Happiness (H&H) ’s stock has rebounded more than 75%, raising the question of whether operations are finally turning the corner.
• With signs of stabilizing growth and improving returns across product categories, 1H2025 results seem to signal the end of years of investor agony.
• Nutritional supplements now contribute to 65% of H&H’s revenue – Swisse’s strong positioning in the fast-growing anti-aging category underpins future growth.

• Supply-Constrained asset: Mine output is growing <1% CAGR and recycling is flat, leaving gold’s supply side structurally inelastic.
• Demand shifting institutional: Jewellery’s share is falling below 30% by 2030, while central banks and ETFs could account for ~70% of demand.
• Macro-Driven pricing: Gold trades as a reserve asset, with real rates setting the ceiling — scenarios range from $2,800/oz (bear) to $7,500/oz (bull).

• The Hang Seng Internet & IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
• In this insight, we take a look at the impact of the new selection methodology for the December 2025 and March 2026 rebal/review events.
• We have also presented our index change expectations for the next semiannual index review which will take place in March 2026 (regular ADDs/DELs only take place in March and September).

• Down 18% in the past month, fundamentals for AviChina Industry & Technology H (2357 HK), one of China’s leading aviation/defense plays, still appear demanding.
• Preceding my comments on AviChina are the current setup/unwind tables for Asia-Pacific Holdcos.
• These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

• China gold jewelry demand slumped in 2Q2025, while investment demand for coins and bars remained resilient amidst rise in gold prices, according to data released by China Gold Association.
• If gold rally continues, Chow Tai Fook Jewellery (1929 HK) faces heightened demand growth risk due to reliance on the competitive, price-sensitive, consumption-driven jewellery segment.
• Chow Tai Fook’s 140% YTD rally reflects optimism on branding-driven earnings growth, but stretched valuations overlook downside risks to growth if gold prices keep rising.

• Chery Automobile (9973 HK) is a Chinese automobile manufacturer. It has launched an HKEx IPO to raise up to US$1.2 billion.
• I previously discussed the IPO in Chery Automobile IPO: The Bull Case and Chery Automobile IPO: The Bear Case. 
• In this note, I present my forecasts and valuation. My analysis suggests that the IPO price range is reasonable.

• Chery Automobile is looking to raise about US$1.2bn in its upcoming Hong Kong IPO.
• Chery Auto is a Chinese passenger vehicle company which designs, develops, manufactures and sells passenger vehicles, including internal combustion engine vehicles and new energy vehicles, both domestically and overseas.
• We have looked at the company’s past performance in our previous notes. In this note, we talk about valuations.

• Context: The Alibaba (9988 HK) / Hang Seng Index (HSI INDEX) price-ratio deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
• Highlights: Going long the Hang Seng Index and short Alibaba (9988 HK) targets a 12% return.
• Why Read: Essential for quantitative traders seeking mean-reversion opportunities, with detailed execution framework, risk management protocols, and historical simulation showing the statistical basis for this relative value play.

• Dongfang Electric (1072 HK) is looking to raise around US$141m from a primary placement.
• The deal is a small one, representing 3.2 days of the stock’s three month ADV, and 1.5% of total shares outstanding.
• In this note, we will talk about the placement and run the deal through our ECM framework

• A financial group backed by Alibaba Group founder Jack Ma has made a major foray into digital assets, investing $44 million to acquire 10,000 units of Ether, the native token of the Ethereum blockchain.
• Yunfeng Financial Group Ltd., a Hong Kong-listed company in which Ma holds an 11.15% stake, disclosed the acquisition in a regulatory filing Tuesday. The company said it purchased the Ether on the open market using internal cash and would classify the asset as a long-term investment on its financial books.
• The purchase marks a growing trend of publicly traded companies adding cryptocurrencies to their balance sheets, a strategy known on Wall Street as digital asset treasury, or DAT.

• Yusys Technologies (300674 CH) is looking to raise around US$350m in its upcoming H-share listing.
• Yusys Technologies is a PRC leading fintech solution provider operating in the domestic and overseas market, providing full-stack product-oriented technology solutions to a wide spectrum of financial institutions.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• China has vigorously restricted the use of antibiotics. Even for novel antibiotics, they won’t replace old antibiotics completely considering higher price/the difficulty of changing prescription habits of existing clinical guidelines.
• The NMPA’s approval standards for new antibiotics are becoming increasingly strict. So, regulatory agencies’ evaluation of the true efficacy of TNP-2198 may lead to the delay in its market launch. 
• Post-Money valuation after Series E financing reached RMB2 billion. Valuation of TenNor could be lower than peers Zai Lab and Everest Medicines who already have commercialized products on the market.

• In my June note, Zijin Mining Group (2899 HK) appeared fully valued; but I (thankfully) stopped short of being outright bearish. Its share price is up 48% since! 
• A basket of peers is also up 37% since that note. Gold is up~8%, and 41% YTD. On the 14th September, Zijin released Zijin Gold’s PHIP. 1H25 numbers were solid.  
• However, Zijin Gold’s earnings are by no stretch an outlier. Zijin’s Mining’s current share price is now baking in exceptional (unrealistic?) metrics for the gold play spin-off. 

• 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.

• Zijin Gold (2579355D HK) is looking to raise up to US$3.0bn in its upcoming Hong Kong IPO.
• It is a global leading gold mining company formed by combining all of the gold mines of Zijin Mining, located outside of China.
• We have looked at the company’s past performance and done a peer comparison in our previous note. In this note, we will look at the firm’s valuation.

• The spin-off of Zijin for an independent listing is equivalent to presenting a “pure gold business” to the market. Such “asset revaluation” can unlock the hidden value of gold business.
• For enterprises like Zijin in the upstream of gold industry chain, a sustained high and rising gold price is usually a significant positive factor. However, there are also potential risks.
• Zijin Gold has better growth potential than peers, so we think its valuation range could be P/E of 18-22x. If based on 2025 net profit forecast, valuation is US$36.9-45.1 billion.

• On 12 September, Shenyang SASAC increased its Shengjing Bank Co Ltd H (2066 HK) offer by 21.2% from HK$1.32 to HK$1.60. The IFA opines it is fair and reasonable.
• The revised terms should ensure the support of key shareholders. However, the IFA analysis is flawed, and the revised offer is light.
• While the 21 October vote on the delisting proposal should pass, the satisfaction of the minimum acceptance condition (90% of independent H shares) poses a challenge. 

• Butong Group (BUTONG HK) is looking to raise US$100m in its upcoming Hong Kong IPO.
• Butong has been able to achieve strong topline momentum of 57% CAGR from FY22 to FY24, whilst expanding its margins, and is on track to replicate that performance for FY25.
• In this note, we look at the company’s past performance.

• Buy Case: ~20% CAGR growth to 2027E, SOE backing, and potential index inclusion make Zijin the fastest-growing gold producer globally.
• Sell Case: At $40bn, Zijin trades at major-level multiples with mid-tier reserve depth, raising questions on sustainability.
• Swing Factor: Gold price trajectory and flawless execution in Ghana, Laos, and Kazakhstan will determine if the IPO clears closer to the low or high end of the range.

• We visited a “Busy for You” store near a university in Shanghai.
• We believe Busy Ming can attract young customers because of low prices and small packages.
• However, we also believe the company does employ enough shop assistants.

• Global uranium demand is escalating quickly as China doubles its nuclear power plants by 2030 and the U.S. increases its inventory for its energy independence and growing energy needs.
• CGN Mining (1164 HK) is China’s largest uranium trading company, with partnerships with the Kazakhstan government in some of the largest uranium mines in the world.
• CGN secured an off-take contract with China General Nuclear Power Group at prices that are 50% higher than previous contract.  Approximately 60% of CGN’s revenue is from EU and U.S.

• H1 2025 delivered record profitability, with realized gold prices up 41% YoY to ~US$3,020/oz and production surging 77% to 6.75t, lifting margins to ~US$1,440/oz.
• Growth is anchored in the Sepon and Wassa ramp-ups, with optionality from the newly identified SND discovery (maiden reserve expected 2026, potential production from 2027–28).
• On 2026E, Chifeng trades at ~8× P/E and ~4.6× EV/EBITDA with >10% FCF yields, offering inexpensive exposure to earnings growth; risks remain around execution at overseas mines, cost pressures etc.

• Alibaba Group is back in the spotlight after unveiling a trifecta of high-profile moves that have reignited investor interest and sent its shares sharply higher.
• The Chinese tech conglomerate raised $3.2 billion through the issuance of zero-coupon convertible bonds due 2032, a financing round earmarked for strengthening its AI and cloud infrastructure.
• At the same time, reports surfaced that Alibaba is beginning to deploy in-house AI training chips, reducing reliance on Nvidia’s costly accelerators and signaling a shift toward technological sovereignty in the middle of China’s broader AI race.

• Zijin Gold (2579355D HK) is a global leading gold mining company and the overseas gold segment of Zijin Mining Group (601899 CH). It is pre-marketing an HKEx IPO to raise US$3bn.  
• I previously discussed the IPO and outlined my investment thesis in Zijin Gold IPO: The Investment Case. 
• In this note, I take a look at the new information from the PHIP. The 1H25 results and latest developments underscore my previous bullish thesis. 

• High Growth: ~80% production increase (36t to 65t, 2024–27E) via Buriticá, Aurora, Porgera, Central Asia.
• Valuation: Filing suggests US$12–16bn (US$3–4bn raise, 6–7.5× EV/EBITDA); market eyes US$30–40bn.
• Key Dynamics: SOE-backed expansion; risks in EM execution and AISC (~US$1,350/oz by 2027E).

• Zijin Gold (2579355D HK) is looking to raise up to US$3.0bn in its upcoming Hong Kong IPO.
• It is a global leading gold mining company formed by combining all of the gold mines of Zijin Mining, located outside of China.
• We have looked at the company’s past performance, and done a peer comparison in our previous note. In this note, we will provide a PHIP update.

• On the 26th August, rural commercial bank Shengjing Bank Co Ltd H (2066 HK) announced a HK$1.32/Share Offer, a pretty tragic 86.49% discount to NAV.
• On the 12th September, the Offeror bumped terms to HK$1.60 (best & final). That’s a 40.5% premium to undisturbed, but still a 83.96% discount to NAV.
• The Composite Document’s now out, with a H-share class meeting on the 21st October. The IFA (Gram Capital) says “fair & reasonable”. To be expected. 

Key points (machine generated)

• Moutai is a premium baijiu essential for social gatherings in China, symbolizing respect and status.
• Despite strong financial performance, Moutai’s stock price has stagnated due to oversupply and pricing volatility.
• The long-term outlook for Moutai remains optimistic, with potential for recovery as market conditions stabilize.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Hesai Group (HSAI US) raised around US$530m in its secondary listing in Hong Kong.
• We have looked at the deal dynamics in our previous note. 
• In this note, we talk about the ADS movement and trading dynamics.

• LiDAR TAM is underestimated – Current consensus misses the true size. Our work suggests 2030 TAM can be 70–120% higher than implied; Hesai best positioned as the market leader.
• Three Sub-segments Key –China LiDAR penetration reaching 60% penetration, Global ex-China ADAS (and LiDAR) adoption accelerating to 25–35%, and Robotics (logistics, humanoids, appliances) building upto $60bn market by 2030.
• Though the use-cases and upside for the sector can be far beyond current estimates, the industry faces a significant technology risk and the jury is still out.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: SJM Holdings
• UST yields rose on Friday, led by the belly and long end, unwinding part of last week’s yield decline. The yield on the 2Y UST was up 1 bp at 3.56%, while that on the 10Y UST advanced 4 bps to 4.06%.
• Equities held steady near record high levels. The S&P 500 was unchanged at 6,584, while the Nasdaq rose 0.4% to 22,141.

• BUTONG adopt a marketing-driven model, which lacks underlying innovation in products, may be effective during market expansion, but is prone to the problem of sluggish growth during valuation transition period.
• If the approach of promoting expansion by relying on high growth of low-profit business continues, profit space will be suppressed,which isn’t friendly to the narrative of capital market after IPO.
• 2025-2027 revenue growth could be 30%, 25%, 20% respectively. Considering the high growth in the short term as well as the concerns, P/E of 20-25x could be a comfortable range  

• Gross SOUTHBOUND volumes just under US$20+bn a day this past 5-day week. BIG Net buying. Big BABA trading. 
• SOUTHBOUND investors traded US$9bn of Alibaba (9988 HK) in the week. Not shy. It was a big net buy as well (4 of 5 days was +US$500mm or more).
• 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.

• 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: Chery Automobile (CH3456 CH), Zijin Gold (2579355D HK) and Tata Capital Limited (TATACAP IN) IPOs. Hesai Group (HSAI US) H Share listing.
• Event-Driven developments: Mandom Corp (4917 JP), Soft99 Corp (4464 JP), Fuji Oil Co Ltd (5017 JP), Evergrande Property Services (6666 HK), Shengjing Bank Co Ltd H (2066 HK).

• Back on the 26th August, troubled rural commercial bank Shengjing Bank Co Ltd (2066 HK) announced a HK$1.32/Share Offer, a 15.79% premium to undisturbed, and a 86.49% discount to NAV. 
• Clearly not all is well with Shengjing Bank. And alternatives to the low-balled Offer are slim on the ground. 
• The Offeror has now bumped terms to HK$1.60 (best & final). That’s a 40.5% premium to undisturbed, but still a 83.96% discount to NAV. 

• 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, things are picking up going into the year end, as is usual, with multiple US$1bn+ deals said to go live over the next few weeks.
• On the placements front, as well, market remains receptive for both primary and secondary offerings.

• “Beautiful Skew” slightly visible but not huge, not consistent.On average, liquid Hs outperformed their As by 1.99% so +2.79% over 2 weeks.
• Last week’s long reco on China Communications Construction (1800 HK) gained just over 1% on the week in Hs and the H outperformed the A by 0.6% Friday 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.

• The strong bullish sentiment towards gold has boosted Laopu’s share price, but we still have doubts about whether Laopu can truly benefit from the gold price rally in the future.
• In a crisis, gold stocks will face sell-off. We may see an “interesting phenomenon”- The price of gold commodities is soaring, while gold stocks are performing unsatisfactory or even plummeting.
• In fact, we already witnessed the inconsistency between the gold commodities prices and Laopu’s share price. This is the core logic we recommend investors take profits on Laopu in time.

• Context: Volatility cones provide a clear framework to evaluate whether options are trading cheap or rich.
• Highlights: Implied volatility has increased across the board, but while some stocks recorded a 5-10% increase, other just added 1-2%. Upcoming November earnings start to shape the term structure.
• Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.

• Strong industry sales of wheel loaders (+10.4% YoY) and excavators (+18.8%) in Jul-Aug suggested that the current consensus earnings forecasts are too conservative. 
• Lonking Holdings (3339 HK) will also benefit from the strength of the equities market, given it has an investment portfolio of Rmb2.4bn, or 18.6% of its market capitalisation.
• Given net cash equalling HK$2.02/share, or 66.1% of its share price, its 10.3x PER and 4.5% dividend yield for FY25F still appear undemanding. 

• Genfleet, a China-based clinical stage biotech company, launched its IPO to raise at least USD 204 million via a Hong Kong listing.
• In our previous note, we have examined the company’s core product and key product and our thoughts on valuation.
• In this note, we look at the deal term. We think the valuation provides margin of safety while sentiment is positive.

• HK-Listed SF Intra is a leading player in Chinese on-demand delivery
• H1 results show strong top-line growth, but thin margins, -ive OpCF
• SF Intra’s structure suggests no fat to cut in local eComm fulfillment expense

• I tally 43 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma.
• Two new deals were discussed on Smartkarma this week: Mandom Corp (4917 JP) and Digital Holdings (2389 JP). Also, Evergrande Property Services (6666 HK) suspended pursuant to the Takeovers Code. 
• Key updates/news took place on PointsBet Holdings (PBH AU), Jilin Jiutai Rural Comm Bank (6122 HK), Topcon Corp (7732 JP), and Furukawa Battery (6937 JP).

• HSI broke out to fresh four-year highs, driven by Alibaba’s surge, with broad-based gains and rising single stock option activity.
• Market breadth strengthened across both price action and single stock options flows.
• Spot-Up/Vol-Up dynamics defined the week, as sectors with strong gains also posted the largest implied vol increases.

• A review of recent events/data impacting our investment themes and outlook
• Change of mindset needed for HK/China as the bull markets broadens out
• Signs of excess are rife in many global markets, but no top yet signalled.

• Shenyang SASAC increased its Shengjing Bank Co Ltd H (2066 HK) offer by 21.2% from HK$1.32 to HK$1.60 per H Share, a 40.4% premium to the undisturbed price.
• The revised offer has been declared final. The revised terms signal that at least one of the substantial H shareholders would not accept the previous offer.
• While the revised terms should ensure the support of key shareholders, the terms remain light. Therefore, there remains a risk around the 90% minimum acceptance condition. 

• New Oriental Education & Technology Group Ltd reported a strong performance in the fourth quarter of its fiscal year 2025, highlighting both positive advancements and some challenges that may impact their future outlook.
• The company announced an 18.7% year-over-year revenue increase, excluding contributions from its East Buy segment, primarily driven by the expansion of new business ventures.
• These ventures include overseas test preparation, which grew by 15%, and adult and university student services, expanding by 17%.

• The Trump administration is considering putting “severe restrictions” on the drugs from China, which would negative for China biotech that mainly relies on licensing-out model. We share our views below.
• The key to assessing the future profitability of innovative drugs in China lies in their ability to control costs, not just in the growth of product sales.
• Sihuan achieved a turnaround and is undervalued. Just “medical aesthetics + cash” worth RMB15.3 billion valuation. The innovative drug business will provide decent upside potential, but with some concerns behind. 

• Changhong Jiahua Holdings (3991 HK) (CJ), which is principally engaged in the distribution of consumer electronic products, is suspended pursuant to the Takeovers Code.
• Sichuan Changhong Electric Co, Ltd. (600839 CH) holds ~60.13% of the shares outstanding. And 100% of the preference shares (76.7% of shares out). 
• This week, a final judgement, concerning monies owed, was ruled in CJ’s favour. The sum involved is ~30% of CJ’s market cap. 

• Supply jitters and China’s steel rebound lifted prices, as Rio faces local refining pressure and Brazil fire fears linger.
• Managed money participants are rebuilding bullish bets, lifting net longs and open interest, signalling revived demand and expectations of further gains.
• Prices pulled back after hitting the upper Bollinger band, hinting at profit-taking as traders watch the basis band for support.

• TAL Education Group reported robust financial performance for the first quarter of fiscal year 2026, showcasing significant revenue growth while managing to improve operational efficiency.
• The company recorded net revenues of $575 million, marking a 38.8% increase year-over-year, with a notable rise in gross margin from 51.7% to 54.9%.
• Operating income improved significantly with TAL turning a previous operating loss into a profit of $14.3 million, demonstrating enhanced operational leverage and cost management.

• The Hang Seng Index (HSI INDEX) has been rallying +37% since its plunge to 19260 on April 7th. It is +6% higher than its previous high in mid-March.
• The sentiment towards the index remains positive lately, and our model indicates the HSI  is a bit overbought but could go higher.
• The HSI INDEX starts to be toppish around 26874 (75% prob. of reversal). Covering past that point is not a bad idea, especially if the index is up 3-4 weeks.