China Archives | Page 11 of 199 | Smartkarma

In today’s briefing:

(Mostly) Asia-Pac M&A: Evergrande Property Services, Mandom, Digital Hold., Topcon, Furukawa Battery
Hong Kong Single Stock Options Weekly (Sept 08 – 12): Alibaba Surge Helps Push HSI to Four-Year High
Overview #34 – China Rocks On: Bull Market Rules
Shengjing Bank (2066 HK): Revised and Final Offer Remains Light
New Oriental Education Power Shift: How Will Non-Academic Tutoring Redefine Growth?
China Healthcare Weekly (Sep.14) – Trump to Put Restrictions on Chinese Drugs, Sihuan Is Undervalued

(Mostly) Asia-Pac M&A: Evergrande Property Services, Mandom, Digital Hold., Topcon, Furukawa Battery

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).

Hong Kong Single Stock Options Weekly (Sept 08 – 12): Alibaba Surge Helps Push HSI to Four-Year High

By John Ley

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.

Overview #34 – China Rocks On: Bull Market Rules

By Rikki Malik

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.

Shengjing Bank (2066 HK): Revised and Final Offer Remains Light

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 Power Shift: How Will Non-Academic Tutoring Redefine Growth?

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%.

China Healthcare Weekly (Sep.14) – Trump to Put Restrictions on Chinese Drugs, Sihuan Is Undervalued

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.

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Sep 13

Daily Brief China: Changhong Jiahua Holdings, Iron Ore, TAL Education, Hang Seng Index and more

In today’s briefing:

Changhong Jiahua (3991 HK): Expect Sichuan Changhong To Make An Offer
[IO Technicals 2025/37] Bullish Rally Flickers Out
TAL Education Group: What Is The Expected Impact Of AI-Powered Content & Learning Tools?
Hang Seng Index (HSI) Profit Targets: Has The Rally Topped?

Changhong Jiahua (3991 HK): Expect Sichuan Changhong To Make An Offer

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.

[IO Technicals 2025/37] Bullish Rally Flickers Out

By Umang Agrawal

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: What Is The Expected Impact Of AI-Powered Content & Learning Tools?

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.

Hang Seng Index (HSI) Profit Targets: Has The Rally Topped?

By Nico Rosti

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.

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Sep 12

Daily Brief China: Yum China Holdings , Evergrande Property Services, Jilin Jiutai Rural Comm Bank, Zijin Mining Group Co Ltd H, Zijin Gold, Chery Automobile, China Medical System, GenFleet Therapeutics and more

In today’s briefing:

Quiddity Leaderboard HSCEI Dec25: Three ADDs/DELs Likely; Sector-Neutral Idea
Evergrande Property Services (6666 HK): Offer Expected As Parent (Likely) Exits
Jilin Jiutai Bank (6122 HK): Take The Offer. It Is What It Is
Zijin Mining: Gold IPO De-Risks, Copper Upside Remains
Zijin Gold IPO Valuation Analysis
Chery Auto Pre-IPO – Thoughts on Valuation
Evergrande Services (6666 HK): Liquidation of Evergrande’s Stake to Trigger an Unconditional MGO?
Evergrande Property Services (6666 HK): Liquidators’ Auction
China Medical System (867 HK) – From an 8 to a 16 FPE
Genfleet Therapeutics IPO: Finely Placed at the Moment; RAS Inhibitors Hold Key to Future Growth

Quiddity Leaderboard HSCEI Dec25: Three ADDs/DELs Likely; Sector-Neutral Idea

By Janaghan Jeyakumar, CFA

The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
In this insight, we take a look at the rankings of potential ADDs and potential DELs for the December 2025 index rebal event.
At present, we see three changes based on the latest data but the rankings can change until 30th September 2025.

Evergrande Property Services (6666 HK): Offer Expected As Parent (Likely) Exits

Property management play Evergrande Property Services (6666 HK) (EPS) is currently suspended pursuant to the Takeovers Code.
Evergrande (3333 HK) controls 51.71%. This suspension is either a precursor to a Scheme; or (more likely) cash-strapped Evergrande is exiting, potentially triggering an unconditional MGO.
Evergrande, currently in liquidation, was delisted from the HKEx on the 25th August 2025 after failing to fulfil HKEx resumption guidance. The delisting was arguably symbolic, but remains a milestone.

Jilin Jiutai Bank (6122 HK): Take The Offer. It Is What It Is

Back on the 3rd July 2025, Jilin Province Trust must a voluntary Offer at HK$0.70/share (~0.23x P/B!!) for troubled rural commercial bank Jilin Jiutai Rural Comm Bank (6122 HK).
Shares have been suspended since 12th March. Jilin Jiutai have yet to publish their 2024 annual results. It’s doubtful shares will resume trading. Ever.
The Composite Doc Booklet is now out, with a H-share class meeting on the 24th October, the same day as the first close. The IFA (Gram) says “fair & reasonable“.

Zijin Mining: Gold IPO De-Risks, Copper Upside Remains

By Rahul Jain

Dilution: The gold IPO trims attributable EBITDA by ~3% as minority interests rise.
Parent Impact: Zijin parent emerges leaner, with net debt falling by US$4bn and copper now ~70% of EBITDA.
Valuation: At ~7× EV/EBITDA, the stock offers 15–30% upside on our estimates, stretching to 25–45% at spot.

Zijin Gold IPO Valuation Analysis

Our base case valuation of Zijin Gold suggests implied EV of US$40.4 billion and market cap of US$42.9 billion.
Our EV/EBITDA valuation multiple of 14.3x is based on a 50% premium to the comps’ valuation multiple in 2026.
We believe a 50% premium valuation to the comps’ average EV/EBITDA multiple is appropriate for Zijin Gold mainly due its higher sales growth, EBITDA margins, and ROE than the comps.

Chery Auto Pre-IPO – Thoughts on Valuation

Chery Automobile is looking to raise about US$1.5bn 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.

Evergrande Services (6666 HK): Liquidation of Evergrande’s Stake to Trigger an Unconditional MGO?

Evergrande Property Services (6666 HK) is in a trading halt “pending the release of an announcement pursuant to the Code on Takeovers and Mergers which contains inside information of the Company.”
The trading halt likely relates to Evergrande (3333 HK) liquidators’ efforts to sell Evergrande Group’s majority interest in Evergrande Services.
The sale is likely to trigger an unconditional mandatory general offer. I estimate the potential offer price to be around HK$1.08 per share, a 17.8% premium to the last close.

Evergrande Property Services (6666 HK): Liquidators’ Auction

In Evergrande Property Services (6666 HK): Offer Expected As Parent (Likely) Exits., I speculated on the outcome of Evergrande Property Services (6666 HK) (EPS)’s suspension due to the Takeovers Code.
EPS has now announced that the liquidators for Evergrande (3333 HK) have been fielding non-binding Offers for Evergrande’s 51.016% stake in EPS. Final proposals are expected to be submitted by November.
With a view to maximizing proceeds, the liquidators will ideally seek a sole bidder, leading to a change of control. And an unconditional MGO. Shares resume trading this morning.

China Medical System (867 HK) – From an 8 to a 16 FPE

By Avien Pillay

Since our initiation on 5 June 2024, China Medical Sytem’s share price is up 113% and the FPE has moved from less than 8 to close to 16 times.
The gap valuation between US drug companies and CMS has largely closed with CMS trading at a premium to a number of US counterparts.
The earnings outlook is largely flat since the initiation, implying the share price appreciation has been driven by a re-rating.

Genfleet Therapeutics IPO: Finely Placed at the Moment; RAS Inhibitors Hold Key to Future Growth

Genfleet Therapeutics has filed for IPO to raise up to HK$1.6B. The company plans to sell 77.6M shares at HK$20.39 per share.
Genfleet Therapeutics is a biopharmaceutical company focused on developing novel treatment options in the fields of oncology with its core products focused on niche RAS inhibitor segment.
Genfleet is rightly placed to rapidly advance their innovative product pipeline to later stages of development and commercialize. Pipeline envisages sustainable long term growth prospect.

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Sep 11

Daily Brief China: NIO , AAC Technologies Holdings, Robosense Technology, Zijin Gold, China Mobile, Jilin Jiutai Rural Comm Bank, Chery Automobile and more

In today’s briefing:

NIO (9866 HK/NIO US): Index Implications of US$1bn+ Offering
NIO (NIO US/9866 HK): An Opportunistically Timed US$1 Billion Raise
Quiddity Leaderboard HSTECH Dec25: One Index Change Likely; US$650mn One-Way with Capping
NIO HK/ADS Placement – Slightly Better Placed, but Slightly Bigger Deal at US$1bn
BUY/SELL/HOLD: Hong Kong Market Update (September 10)
Zijin Gold Pre-IPO: Peer Comparison
China Mobile (941 HK): Tactical Outlook as HKBN Deal Unfolds
Jilin Jiutai RCB (6122 HK): Minorities Out of Options as the Offer Opens
Chery Auto IPO PHIP Update & Review
Chery Auto Pre-IPO: More Discounts Than Price War Starter

NIO (9866 HK/NIO US): Index Implications of US$1bn+ Offering

By Brian Freitas

NIO (9866 HK) / NIO (NIO US) is looking to raise up to US$1.15bn, including the overallotment option, in an equity offering across Hong Kong and the U.S.
The HK offering is priced at HK$43.36/share and the ADR pricing is US$5.57/share. NIO (NIO US) closed at US$5.72/share overnight, so expect NIO (9866 HK) to open around HK$44.55/share.
There will be buying from global index trackers at the time of settlement of the offering shares. The buying from Hang Seng TECH Index (HSTECH INDEX) trackers is more nuanced.

NIO (NIO US/9866 HK): An Opportunistically Timed US$1 Billion Raise

NIO (NIO US), a Chinese premium electric vehicle manufacturer, has launched an equity offering to raise around US$1 billion.
The raise is opportunistically timed to take advantage of the 83% QTD share price rally and comes hot on the heels of a US$513 million raise in April.
While NIO continues to target a break-even in 4Q25 and reduce its cash burn, the valuation is stretched. A history of false dawns and intensifying competition warrants caution.

Quiddity Leaderboard HSTECH Dec25: One Index Change Likely; US$650mn One-Way with Capping

By Janaghan Jeyakumar, CFA

The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
In this insight, we take a look at the potential index changes and the resultant capping flows for HSTECH index rebal event in December 2025.
We expect one index change for the HSTECH index in December 2025 based on the latest available data.

NIO HK/ADS Placement – Slightly Better Placed, but Slightly Bigger Deal at US$1bn

NIO (NIO US) is looking to raise around US$1bn via a primary placement in Hong Kong and US.
The company had last raised around US$450m in March 2025. The deal didn’t end up doing well.
In this note, we will talk about the placement and run the deal through our ECM framework.

BUY/SELL/HOLD: Hong Kong Market Update (September 10)

By David Mudd

Hong Kong’s Secular Bull Market continues with the index breaking above its long term resistance levels. Market breadth is expanding with 87% of stocks trading above their 200 (DMA).
Hong Kong market valuations are well below all other Asian markets. This year, the materials and healthcare sectors have been the best performers.
Robosense Technology (2498 HK) reported solid earnings in its LIDAR business with robotics posting surprising growth. Deutsche Bank and China Renaissance both rate the company a BUY and raise targets.

Zijin Gold Pre-IPO: Peer Comparison

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 in our previous note. In this note, we will undertake a peer comparison.

China Mobile (941 HK): Tactical Outlook as HKBN Deal Unfolds

By Nico Rosti

As you all know China Mobile (941 HK) has strategically ramped up its ownership in HKBN Ltd (1310 HK) aiming at full control/takeover, while navigating regulatory approvals and competitive bids.
The stock suffered a pretty big drop in the last 2 weeks, especially last week, when it reached 85.1. This week the stock started a small recovery rally.
Our model finds China Mobile oversold (short-term) but we cannot rule out a further drop to/below 83.2 (Q3 support), the current pattern is bearish: brief rally then down again.

Jilin Jiutai RCB (6122 HK): Minorities Out of Options as the Offer Opens

On 3 July, Jilin Jiutai Rural Comm Bank (6122 HK) disclosed a voluntary conditional offer and delisting proposal by Jilin Province at HK$0.70. IFA opines it is fair and reasonable.
The IFA analysis is flawed, and the offer is unattractive. Nevertheless, the offer represents the best-case scenario for minorities, as the timeline for resuming trading remains uncertain.
While the 24 October vote on the delisting proposal should pass, the satisfaction of the minimum acceptance condition (90% of independent H shares) poses a challenge.

Chery Auto IPO PHIP Update & Review

Chery Auto is getting ready to complete its IPO in the next few weeks. It is expected that Chery Auto could raise about US$1.5 -2.0 billion in this IPO.
ROE is super high at 70%+. Chery Auto has one of the highest ROEs among all the major auto companies globally.
Chery Auto has one of the best records among all the major auto companies globally in the past three years in terms of sales and net profit growth.

Chery Auto Pre-IPO: More Discounts Than Price War Starter

By Ming Lu

Chery positions itself in the economy and mainstream markets or accurately below RMB150,000.
Chery provided more discounts than BYD, the price war launcher.
Chery’s stores are far away from the city center in Shanghai.

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Sep 10

Daily Brief China: CGN Mining, Zijin Gold, Tencent, Chery Automobile, Annto Logistics Supply Chain Technology, MegaRobo Technologies, Taste Gourmet, Reconova Technologies Co Ltd, 160 Health International and more

In today’s briefing:

Uranium’s Shortfall And Nuclear Viability
Zijin Gold International – Creating a Global Pure-Play Gold Champion
Zijin Gold IPO Preview
How to Play the Chinese Domestic Economic Drivers
Chery Auto Pre-IPO – Peer Comparison
Annto Supply Chain Pre-IPO Tearsheet
MegaRobo Pre-IPO: Robotics Trend but Losses Widening
Taste Gourmet H1 FY26: Earnings Preview, 5.8x PE with 30% of Mkt Cap in Cash, And a 9% Yield
Reconova Technologies Pre-IPO: Fast Climb But Narrowing Base
Pre-IPO 160 Health (PHIP Updates) – Some Points Worth the Attention

Uranium’s Shortfall And Nuclear Viability

Back in April 2022, around six weeks after Russia’s invasion of Ukraine, I touched on the disruption to the uranium supply chain in Uranium: Fuelling Fears.
The war spurred renewed interest in nuclear energy as a source of domestic power. Uranium prices have tripled since the invasion.
A recent report from the World Nuclear Association forecast a significant step-up in demand for uranium for reactors, together with a material output drop from mines “as deposits are exhausted”.

Zijin Gold International – Creating a Global Pure-Play Gold Champion

By Rahul Jain

Zijin Mining is spinning off its seven overseas gold mines into Zijin Gold International, creating a dedicated, pure-play gold producer and positioning it for a Hong Kong IPO.
The IPO proceeds will primarily fund mine upgrades and overseas M&A, with a portion earmarked to reinforce the balance sheet and corporate flexibility.
With media reports suggesting a $3B+ IPO size and potential launch in September, coupled with gold rallying above $3,600/oz, investor appetite around the listing is notably heightened.

Zijin Gold IPO Preview

Zijin Gold is getting ready to complete its IPO in Hong Kong this year. A successful IPO of Zijin Gold could fetch as high as US$3 billion in IPO proceeds.
Zijin Gold had sales of US$3.0 billion (up 32.2% YoY) in 2024. Net margin increased from 14.2% in 2023 to 20.8% in 2024.
There has been a sharp increase in the gap between gold AISC (all-in-sustaining cost) and gold price in the past year, leading to higher profit margins of gold producers globally.

How to Play the Chinese Domestic Economic Drivers

By Manishi Raychaudhuri

China’s service sector is growing faster than manufacturing and construction, especially the business-to-business services, like IT Services, cloud services leasing and other business services.
Among merchandize retail sectors, household and communication appliances, sports and recreational goods and gold and silver jewelry are growing the fastest. Some segments of food are enjoying healthy growth too.
From a universe of 35 stocks in these sectors, we screen our favored 10, based on valuations more than justified by forecast earnings growth, high ROE and consensus Buy rating.

Chery Auto Pre-IPO – Peer Comparison

Chery Automobile is looking to raise about US$1.5bn 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 undertake a peer comparison.

Annto Supply Chain Pre-IPO Tearsheet

Annto Logistics Supply Chain Technology (ANNTO HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by Morgan Stanley and CICC.
It is the leading integrated supply chain logistics solutions provider in China.
According to CIC, it achieved the fastest revenue CAGR between 2022 and 2024, and is amongst the top five comprehensive integrated supply chain logistics solutions providers in China

MegaRobo Pre-IPO: Robotics Trend but Losses Widening

MegaRobo Technologies (MRT HK) is looking to raise at least US$300m in its upcoming Hong Kong IPO.
It is the leading provider of autonomous agents in robotics applications in China, dedicated to improving productivity and driving innovation for businesses across both laboratory and manufacturing settings.
In this note, we provide updates on the firm’s past performance.

Taste Gourmet H1 FY26: Earnings Preview, 5.8x PE with 30% of Mkt Cap in Cash, And a 9% Yield

By Sameer Taneja

Taste Gourmet (8371 HK) will report its H1FY26 earnings in late November. We estimate a 15% revenue growth and 20-25% profit growth as the retail environment in HK improved slightly.
The company increased its restaurant count in HK to around 65 restaurants (vs 56 last year), whereas the count in China remained static at six restaurants.
The stock trades at a 5.8x PE, with a 9% dividend yield and 30% of the market capitalization in cash.

Reconova Technologies Pre-IPO: Fast Climb But Narrowing Base

By Hong Jie Seow

Reconova Technologies Co Ltd (1618370D CH) is looking to raise about US$100m in its upcoming Hong Kong IPO.
Reconova provides a series of visual perception, visual cognition and visual reasoning intelligence products that are deeply applied across different scenarios, including civil aviation, commercial spaces, and freight logistics.
In this note, we look at the company’s past performance.

Pre-IPO 160 Health (PHIP Updates) – Some Points Worth the Attention

This “high input, low output” model has led 160 Health into a profit predicament when its revenue failed to grow in tandem.The turnaround from losses to profits is far away.
160 Health operates as a distributor, but VBP has shifted more procurement activities to direct transactions between hospitals and manufacturers, thereby reducing pricing flexibility for intermediaries such as 160 Health.
Valuation of 160 Health should be lower than PAGD, JD Health, Alibaba health, who have turned losses into profits and established mature business foundation and model, but higher than ClouDr.

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Sep 09

Daily Brief China: Dongfeng Motor, Zijin Gold, Pop Mart, China Communications Construction, China Traditional Chinese Medicine, Laopu Gold, Hunan Mabgeek Biotech, Jiangsu Hengrui Pharmaceuticals, Chery Automobile, Oriental Watch and more

In today’s briefing:

Dongfeng (489 HK): Questioning The EV Listing Valuation
Zijin Gold IPO: The Investment Case
Pop Mart International – Valuation Using Peter Lynch’s PEGY Ratio
A/H Premium Tracker (To 5 Sep 2025): AH Premia Contract Slightly, Beautiful Skew Better
China TCM (570.HK) – Performance Is Expected to Rebound
Laopu Gold (6181 HK): Technical Overhang Masks Strong Fundamentals – Gold Bulls Stay Put
Mabgeek (麦济生物) Pre-IPO: Incremental Innovation in a Crowded Space
Jiangsu Hengrui (1276 HK): Deals Galore; This Time for Hypertrophic Cardiomyopathy with Braveheart
Chery Auto Pre-IPO – PHIP Updates – Some More Data, Some More Issues
Oriental Watch (398 HK): HK Retail Environment Improving, China Stable

Dongfeng (489 HK): Questioning The EV Listing Valuation

Back on the 22nd August, SOE-backed Dongfeng Motor (489 HK) announced a privatisation; together with a concurrent listing of its EV arm, VOYAH.
The share price closed up 54% on the first day, ~15% adrift of the independently valued cash + scrip (into VOYAH) under the privatisation.
Shares have pared back 5% since. VOYAH’s peer basket has fallen ~15% on average. The market is implying a price-to-trailing-sales of 1x for VOYAH versus the basket average of 1.9x.

Zijin Gold IPO: The Investment Case

Zijin Gold (2579355D HK) is a global leading gold mining company and the overseas gold segment of Zijin Mining Group (601899 CH). It is seeking to raise US$3 billion.
Zijin Gold hold interests in eight gold mines located in gold-rich regions across South America, Oceania, Central Asia and Africa.
The investment case is bullish due to a diversified mine portfolio, strong growth, an attractive margin profile, robust cash generation, and modest leverage.

Pop Mart International – Valuation Using Peter Lynch’s PEGY Ratio

In this insight, we discuss Pop Mart (9992 HK)’s valuation using Peter Lynch’s PEGY ratio.
If Pop Mart misses current consensus estimates in 2026 and 2027 by 5%, this would result in PEGY ratio of 1.4x in 2026 which would make current valuations unattractive.
WE EXPECT A HIGHER PROBABILITY OF POP MART’S VALUATION DECLINING BY 50% TO ABOUT US$25 BILLION, RATHER THAN INCREASING BY $75 BILLION FROM CURRENT LEVELS OVER THE NEXT 1-2 YEARS.

A/H Premium Tracker (To 5 Sep 2025): AH Premia Contract Slightly, Beautiful Skew Better

By Travis Lundy

“Beautiful Skew” came back slightly. Not huge, but OK. On average, liquid Hs outperformed their As by 0.8%.
Last week’s short reco on Remegen (9995 HK) gained 8.3% on the week in Hs and the H underperformed the A by 7% Friday to Friday, 4.5% if VWAPed Monday.
AH premia are likely still in a widening phase but weakness in speculative A-shares may dampen overall moves even if pairs are volatile. New reco this week.

China TCM (570.HK) – Performance Is Expected to Rebound

China TCM is still in the adjustment period due to CTCMG VBP and goodwill impairment loss. However, the new management is pushing for internal reforms, which is a good phenomenon.
Rebound will come after China TCM fully digest the impact of VBP. Looking forward, annual profit of RMB1bn is still expected. Reasonable valuation is RMB10-15bn, which is just conservative estimate.
As CNPGC still commits to resolving the horizontal competition issue, investors have reignited interest in betting on privatization of China TCM and potential merger with Taiji, which is a catalyst.

Laopu Gold (6181 HK): Technical Overhang Masks Strong Fundamentals – Gold Bulls Stay Put

By Devi Subhakesan

Laopu Gold (6181 HK) is down nearly 20% since June’s lock-up expiry, despite strong 1H2025 results and subsequent analyst earnings upgrades.
The stock trades at 22x FY26E, the low end of its YTD P/E range, with a PEG below 0.8x.
China’s retail gold demand in 2Q2025 has shifted toward investment products – a trend that could support Laopu’s mostly investment-driven sales.

Mabgeek (麦济生物) Pre-IPO: Incremental Innovation in a Crowded Space

By Ke Yan, CFA, FRM

Mabgeek, a China-based clinical-stage biotech company, is looking to raise at least USD 100 million via a Hong Kong listing. CICC is the sole sponsor.
In this note, we look at the company’s core product, MG-K10.
We also look at the company’s pre-IPO investors and management team.

Jiangsu Hengrui (1276 HK): Deals Galore; This Time for Hypertrophic Cardiomyopathy with Braveheart

Jiangsu Hengrui Pharmaceuticals (1276 HK) entered into agreements with Braveheart Bio, to grant Braveheart an exclusive worldwide right of HRS-1893, a selective myosin inhibitor that treats hypertrophic cardiomyopathy.
The only approved product available worldwide is Bristol Myer Squibb’s Camzyos (mavacamten) which was approved for marketing by FDA in April 2022 for obstructive hypertrophic cardiomyopathy.
With Robust R&D and future potential drug candidates under its belt, Jiangsu Hengrui continues to remain an attractive bet, with a long-term perspective.

Chery Auto Pre-IPO – PHIP Updates – Some More Data, Some More Issues

Chery Automobile is looking to raise about US$1.5bn 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.
In this note, we talk about the updates from its most recent filings.

Oriental Watch (398 HK): HK Retail Environment Improving, China Stable

By Sameer Taneja

HK Department of Statistics data show the jewellery and watch retail market is improving, with June and July sales up 6.8% and 9.4% YoY, respectively.
China is by far Oriental Watch (398 HK) ‘s most important market, accounting for 78% of sales. and sales are stable there so far.
The company holds cash equal to 50% of market capitalization; we forecast a H1 FY26 dividend of $0.22/share (annualized ~12.5% yield) on an 8.5x P/E.

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Sep 08

Daily Brief China: Hangzhou Kangji Medical Instrument Co., Ltd., Chery Automobile, Tencent, Pop Mart, Shanghai MicroPort MedBot Group, SHEIN and more

In today’s briefing:

Merger Arb Mondays (08 Sep) – Kangji, OneConnect, Ashimori, Pacific Ind, RPM, Santos, Zeekr
Chery Automobile IPO: The Bear Case
Volatility Cones: Spotting Opportunities in Tencent, JD.com, Ping An & More
Pop Mart (9992 HK) – 2025 High Growth Is a Done Deal, but How About 2026?
MicroPort MedBot (2252 HK): Overseas Markets Shine; Tuomai Drives Growth; Losses Narrow in 1H25
SHEIN / Temu / AliExpress: After US Ended “De Minimis” Exemption, Shipments to US Declined 81%

Merger Arb Mondays (08 Sep) – Kangji, OneConnect, Ashimori, Pacific Ind, RPM, Santos, Zeekr

I summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Mayne Pharma (MYX AU), Smart Share Global (EM US), ENN Energy (2688 HK), Dongfeng Motor (489 HK), Joy City Property (207 HK), Santos Ltd (STO AU).
Lowest spreads: Bright Smart Securities (1428 HK), Pacific Industrial (7250 JP), Humm Group (HUM AU), Ainsworth Game Technology (AGI AU), Ashimori Industry (3526 JP), Toyota Industries (6201 JP).

Chery Automobile IPO: The Bear Case

Chery Automobile (CH3456 CH), a Chinese automobile manufacturer, has secured HKEx listing approval for a US$1.5-2.0 billion IPO.
In Chery Automobile IPO: The Bull Case, I highlighted the key elements of the bull case. In this note, I outline the bear case.
The bear case rests on weakening trends of the primary business, gross margin pressure, declining contract liabilities and factoring of receivables.

Volatility Cones: Spotting Opportunities in Tencent, JD.com, Ping An & More

By Gaudenz Schneider

Context: Volatility cones provide a clear framework to evaluate whether options are trading cheap or rich.
Highlights: Major stocks, including Tencent (700 HK), Xiaomi (1810 HK), and Meituan (3690 HK), trade at historically cheap implied volatility. Upcoming earnings are starting to be reflected in November IV.
Why Read: Spot opportunities, assess regime shifts, and manage risk effectively — volatility cones turn complex data into actionable insights for traders and investors.

Pop Mart (9992 HK) – 2025 High Growth Is a Done Deal, but How About 2026?

The certainty of 2025 performance is actually high. 25H2 performance is expected to be better than that in 25H1. Our forecast is net profit to reach RMB10 billion in 2025.
The concern is Pop Mart may face the sustainability problem of performance under the high base of 2025 starting from 2026. If consumers develop aesthetic fatigue towards LABUBU, performance would decline.
In a neutral situation, 30-35x P/E is a comfortable range.Valuation upside depends more on the sustainability of THE MONSTERS popularity and whether the popularity of other IPs can exceed expectations.

MicroPort MedBot (2252 HK): Overseas Markets Shine; Tuomai Drives Growth; Losses Narrow in 1H25

Shanghai MicroPort MedBot Group (2252 HK) recorded 1H25 revenue of RMB 176M, up 77% YoY driven by rapid expansion of commercialization of multiple products. Overseas market sales grew 189% YoY.
Toumai Laparoscopic Surgical Robot continued to be the main growth driver securing new orders of 30+ units and achieving commercial installation of 22 units.
MedBot’s recent approvals of Toumai variants, technology advantages, diversified portfolio and commercialization strength place it at an inflection point, expected to be back in the black soon.

SHEIN / Temu / AliExpress: After US Ended “De Minimis” Exemption, Shipments to US Declined 81%

By Daniel Hellberg

Postal parcel volume bound for the US fell -81% after exemption ended Aug 29
In many cases, logistics providers unwilling to manage US Customs process
We believe the change undermines US model used by SHEIN, Temu, AliExpress

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Sep 07

Daily Brief China: Chery Automobile, Hangzhou Kangji Medical Instrument Co., Ltd., Mixue Group, S.F. Holding and more

In today’s briefing:

Chery Automobile IPO: The Bull Case
Last Week In Event SPACE: ZEEKR/Geely, Kangji Medical, HKBN, Lynas, Huaxin Cement, Nidec
China Healthcare Weekly (Sep.7)- Device Inflection Point, WuXi XDC Placement, MIXUE’s Lock-Up Expiry
Chinese Express Firms All Saw H1 OPM% Fall — Except SF Hldg | Pair Trade: LONG SF Vs SHORT ZTO, J&T

Chery Automobile IPO: The Bull Case

Chery Automobile (CH3456 CH), a Chinese automobile manufacturer, has secured HKEx listing approval for a US$1.5-2.0 billion IPO.
Chery is the second largest Chinese domestic brand passenger vehicle company, and the 11th largest passenger vehicle company globally.
The bull case rests on market share gains, encouraging NEV segmental performance, good margin profile and cash generation.

Last Week In Event SPACE: ZEEKR/Geely, Kangji Medical, HKBN, Lynas, Huaxin Cement, Nidec

ZEEKR (ZK US) traded wide to the scrip terms ahead of Geely Auto (175 HK)‘s EGM Vote. That was a buying opportunity.
A positive surprise as SAMR expediently signs off on the Hangzhou Kangji Medical Instrument Co., Ltd. (9997 HK) transaction. This could be wrapped up before Xmas.
China Mobile (941 HK) comfortably clears the 50% conditional threshold into HKBN Ltd (1310 HK); however compulsory acquisition appears out of reach

China Healthcare Weekly (Sep.7)- Device Inflection Point, WuXi XDC Placement, MIXUE’s Lock-Up Expiry

The inflection point of the policy on medical device is expected to appear this year. High-end imaging, medical robots, AI, and biomaterials are the four fields worth investors’ attention.
WuXi XDC announced Placement to raise HK$1.3 billion net proceeds at HK$58.85/share.XDC will have >30% YoY growth in 2025-2027 but Li Ge/WuXi AppTec’s reduction of holdings is a discordant voice.
MIXUE’s lock-up of shares allotted to cornerstone investors expired. Current valuation is acceptable based on 2025 forecast, but investors need more ‘safety margins’ on valuation due to concerns on outlook

Chinese Express Firms All Saw H1 OPM% Fall — Except SF Hldg | Pair Trade: LONG SF Vs SHORT ZTO, J&T

By Daniel Hellberg

With the exception of SF Holding, all listed express firms reported lower H1 OP%
SF’s independence and unique product mix protected profits as volume surged
We suggest going Long SF Hldg against Short positions in ZTO & J&T

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Sep 06

Daily Brief China: Alibaba, Xiaomi, Hang Seng Index, Iron Ore and more

In today’s briefing:

Alibaba’s AI Chip Leap: A Threat To Nvidia’s China Dominance?
[Xiaomi Inc. (1810 HK, BUY, TP HK$61) TP Change]: C2Q25 Review: Getting into the Brand Expansion Era
Hong Kong Single Stock Options Weekly (Sep 01–05): Option Activity Eases, Speculation In Focus
[Alibaba (BABA US, BUY, TP US$181) Target Price Change]: C2Q25 Review: Who Will Rescue Meituan?
[IO Technicals 2025/36] Overextended Rally Faces Reality Check

Alibaba’s AI Chip Leap: A Threat To Nvidia’s China Dominance?

As geopolitical pressures and regulatory hurdles continue to stifle Nvidia’s ability to deliver its most powerful AI processors to Chinese buyers, Alibaba Group Holding Ltd. is rapidly stepping in to fill the void.
The Chinese tech conglomerate has developed a new AI chip that is both more versatile and domestically manufactured—breaking its prior dependency on Taiwan Semiconductor Manufacturing.
This new chip, tailored for a broad range of AI inference tasks, is currently in testing and could offer Chinese enterprises a viable alternative to Nvidia’s downgraded H20 processor, which was specifically built for the Chinese market under export restrictions.

[Xiaomi Inc. (1810 HK, BUY, TP HK$61) TP Change]: C2Q25 Review: Getting into the Brand Expansion Era

By Eric Wen

Xiaomi reported C2Q25 top line, non-IFRS operating profit and IFRS net income (2.3%), (0.5%) and 41% vs. our estimates, and in-line, (14%) and 31% vs. consensus.
Xiaomi’s growth strategy is to replicate its brand success from smartphones to appliances and EV’s and from China to the rest of the world.
We raise TP from HK$56 to 61 and place Xiaomi into TOP BUY list.

Hong Kong Single Stock Options Weekly (Sep 01–05): Option Activity Eases, Speculation In Focus

By John Ley

Market breadth remained weak as option activity slowed and speculation concerns lingered around speculative trading.
Option demand cooled, led by waning interest in Calls, while heavyweights in Consumer Discretionary kept overall volumes supported.
Trading momentum slowed, but sector heavyweights maintained dominance, with implied vols drifting lower across much of the market.

[Alibaba (BABA US, BUY, TP US$181) Target Price Change]: C2Q25 Review: Who Will Rescue Meituan?

By Eric Wen

Alibaba (BABA) reported C2Q25 top line, non-GAAP op. profit and GAAP net income (4.3%), (10%) and 7.7% vs. our est. and (2.2%), 20% and 9.5% vs. cons..
As stated in our previous reports, we believe O2O e-commerce will constitute ~20% of China’s e-commerce and BABA will capture ~50%.
We maintain BABA’s TOP BUY classification and raise TP to US$181

[IO Technicals 2025/36] Overextended Rally Faces Reality Check

By Umang Agrawal

Chinese mills eye production restart, boosting iron ore demand, but bloated construction steel inventories threaten to cap price gains.
Managed money participants increased net long exposure to 134.9k lots last week, with overall futures and options open interest slipping by 11.2%.
Bullish MA crossover drove prices above short-term averages. However, prices pressing the upper Bollinger band suggest overextension and heightened risk of a near-term pullback.

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Sep 05

Daily Brief China: Hangzhou Kangji Medical Instrument Co., Ltd., Pop Mart, Tencent Holdings (ADR), Alibaba, Tencent Music Entertainment Group, Three Squirrels, Zylox-Tonbridge Medical Technology and more

In today’s briefing:

Kangji Medical (9997 HK): Speedy Turnaround On Pre-Cons
Pop Mart (9992 HK): Index Inclusion & Beyond. Toy Craze or Emerging ACG Play?
Tencent Holdings: An Evergreen Game Strategy to Diversify Portfolio & Reinforce Market Position!
Alibaba (9988 HK): Stock Surges Post-Earnings, Options Market Reprices
Asian Equities: Changes to Our Model Portfolio; More Selective on Chinese Consumption
Three Squirrels A/H Listing: Heavy Price Competition; Thin Margins
Zylox Tonbridge Medical (2190 HK): No More Interventions Needed, Blockages Cleared for Growth

Kangji Medical (9997 HK): Speedy Turnaround On Pre-Cons

Kangji Medical Instrument (9997 HK) announced last night all pre-cons have been squared away. That must be some kind of record to secure SAMR approval for a Hong Kong-listed privatisation.
Back on the 12th August, Kangji Medical announced a less-than-ideal Offer, by way of a Scheme, from a consortium led by TPG and Qatar Investment Authority, together with the founders.
What next? The Scheme Doc dispatch remains the 31st October, unless announced otherwise, as the Cayman Court is still on its six week “vacation”.

Pop Mart (9992 HK): Index Inclusion & Beyond. Toy Craze or Emerging ACG Play?

By Devi Subhakesan

Pop Mart (9992 HK) will be added to both the Hang Seng Index (HSI) and the Hang Seng China Enterprises Index (HSCEI) — effective Monday, September 8, 2025.
Beyond the tail winds from this technical upgrade, stock’s further upside rests on investor conviction on its potential to continue to deliver strong growth beyond the short term.
Pop Mart’s near term growth rests on proving IP durability and executing global scale-up.

Tencent Holdings: An Evergreen Game Strategy to Diversify Portfolio & Reinforce Market Position!

Tencent Holdings Limited delivered a robust financial performance for the second quarter of 2025, driven by significant growth across its business segments.
The company reported a 15% year-on-year increase in total revenue, reaching RMB 185 billion.
This growth was supported by a 22% surge in gross profit to RMB 105 billion and an 18% increase in non-IFRS operating profit to RMB 69 billion.

Alibaba (9988 HK): Stock Surges Post-Earnings, Options Market Reprices

By Gaudenz Schneider

Context:Alibaba (9988 HK) reported Q1 results on 29 Aug. Despite a revenue miss, strong cloud growth and its AI chip announcement drove the stock up double digits.
Highlight: Implied volatility deflated sharply post-earnings, with the September contract down 8.5% and back months also lower, while skew shifted down in parallel.
Why it matters: Put the current volatility surface into context. This insight can serve as a case study of how earnings-driven repricing can inform positioning ahead of future events.

Asian Equities: Changes to Our Model Portfolio; More Selective on Chinese Consumption

By Manishi Raychaudhuri

Since inception, our Model Portfolio underperformed, having appreciated 5.8%, while MSCI Asia-ex-Japan moved up 8.3%. BYD, Hyundai Engineering and Digiplus dragged it down. Alibaba, Trip.Com, Tencent, Maruti pulled it up.
We exclude the secular underperformers BYD and Digiplus and the unexciting Yum China. We include Tencent Music, Wuxi AppTec, International Container Terminals. Focus on China’s “new consumption” trends, CRDMO prowess.
We remain overweight HK/China despite the market’s recent outperformance. Immense stock selection opportunities in the market guide our stance. We remain overweight Korea, neutral India and underweight Taiwan.

Three Squirrels A/H Listing: Heavy Price Competition; Thin Margins

Three Squirrels (TRS HK) is looking to raise around US$200m in its upcoming H-share listing.
It began selling nuts through e-commerce channels. Over the years, it had evolved significantly, growing from a single category nut brand into the largest domestic snack company in China.
In this note, we look at its past performance and other deal dynamics that might impact the listing.

Zylox Tonbridge Medical (2190 HK): No More Interventions Needed, Blockages Cleared for Growth