China Archives | Page 2 of 199 | Smartkarma

• Lung Fung Group (LFG HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by DBS.
• LFG is a Hong Kong-based department store chain retailing a wide variety of pharmaceutical products, health products, beauty products and other consumer goods.
• According to Frost & Sullivan in 2024, LFG was the largest pharmaceutical product retailer by retail sales value in Hong Kong, with a 5.2% market share.

• CiDi Inc (CIDI HK) is looking to raise about US$183m in its upcoming Hong Kong IPO.
• CiDi is a leading autonomous driving technology provider for commercial vehicles in China, with a strong foothold in the autonomous mining segment.
• In our previous note, we looked at the firm’s past performance. In this note, we talk about the IPO valuations.

• Iron ore’s rally appeared sentiment driven, as narrowing mill margins and easing blast furnace activity highlight softening fundamentals and fading demand support.
• Broader technical momentum is weakening as MACD turns bearish and prices retreat from Bollinger resistance, flagging rising downside risks ahead.
• The DCE-SGX spread’s position below key MAs and repeated lower Bollinger band tests signal weak momentum, leaving upside uncertain and the near-term bias tilted bearish.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Longfor Group, Seazen Group, Nickel Industries
• UST yields were stable yesterday, with long-end yields rising marginally despite a decent auction of 30Y notes (which stopped through marginally, at 4.773% award vs. the 4.774% when-issued yield).
• The yield on the 2Y UST was unchanged at 3.54%, while the yield on the 10Y UST rose 1 bp to 4.16%. Equities were mixed, as tech stocks declined on disappointing earnings from Oracle Corp. The S&P 500 rose 0.2% to 6,901, while the Nasdaq declined 0.3% to 23,594.

• Early weakness gave way to a late rebound, leaving HSI modestly lower on the week after a choppy but contained trading pattern.
• Breadth continued to deteriorate, with fewer than one third of optionable names finishing higher for a second consecutive week. Option volumes continue lower trend.
• Pop Mart stood out with a large increase in option volume after heavy selling to start the week.

• Given the change of control into Meilan Airport (357 HK), was, in effect, a  re-arrangement of Meilan Airport shares under the same ultimate parent, the regulatory approval process curiously dragged.
• Yesterday Meilan Airport announced all SPA conditions have now been satisfied, and that the SPA should complete in 20 business days. A Composite Doc will then be issued.
• Trading almost at terms. This is a back-end proposition play. My peer basket is up 11%, on average, since the Offer was first announced. Asian peers are up 15%.

• The feedback I get on this transaction canvasses comments such as: “it just doesn’t feel right“, or “there’s something funny going on“, or simply “weird“. 
• With~20% of the shareholder register, involving opaque pre-IPO investors, none of whom have provided IUs, a Shanghai Henlius (2696 HK)-like situation unfolding is bandied around. The comparison is, however, tenuous.
• Further inquiries suggest CDH is likely in control of 18% of that 20%. This needs to be clarified.

• Structural copper tightness, strong gold cash flows, and rising silver prices position Zijin for multi-year earnings growth and a valuation re-rating in 2026.
• Leadership transition reduces founder dependence, strengthens governance credibility, and enables multiple expansion as Zijin aligns with global copper-scarcity peers.
• Base valuation is HK$40–41; spot and peer convergence support HK$48–50, implying 35–40% upside with clear catalysts across copper expansions and gold stability.

• Ming Yu, a China-based clinical-stage biotech company, is looking to raise at least USD 100 million via a Hong Kong listing. MS, BOA, and CITIC are the joint book runners.
• In this note, we look at the company’s core products, MHB018A and MHB036C, and assess the selling point around the core product.
• We also look at the company’s pre-IPO investors and management team.

• Luxvisions Innovation Technology (1853852D HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by CITIC, CICC.
• It is a globally leading provider of precision optical solutions, focusing on the mid- to high-end optical module and system integration markets for global brand manufacturers across multiple sectors.
• Its products and solutions primarily serve the consumer electronics, automotive electronics, smart office applications and other emerging sectors.

• Emeren Group’s merger arbitrage presents a 13% spread with a shareholder vote imminent, despite operational softness concerns.
• TrueCar’s buyout vote is set for December 22, with AutoNation potentially reducing required financing by joining.
• AUB Group’s merger discussions with EQT and CVC ended without a binding proposal, reflecting management’s confidence in fundamentals.

• Shenzhen SDMC (1385919D CH) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by CSI.
• It is a specialized provider of smart home solutions for enterprise customers, dedicated to advancing the application of AI technologies in home settings. 
• The Company’s business model involves developing and selling primarily hardware products.

• Recent developments materially improve the setup: H200 clarity reduces a major sector overhang and removes uncertainty around chip supply, clearing the way for continued AI-infrastructure expansion in China.
• 3Q25: VNET’s strong result, 2026 outlook, advantaged power resources, and shareholder priorities (no equity dilution and defined leverage limits) reduce downside bottoms-up risk while increasing confidence on execution
• None of this is reflected in today’s valuation. With 25–30% EBITDA CAGR and improved visibility on demand and execution, VNET is positioned for a material 2026 re-rating, implying 60-100% upside.

• In today’s Convertibles Brief publication we comment on developments of the following high yield issuers: Lenovo
• The iTraxx Main was broadly flat at 53 bps, while the iTraxx X-Over narrowed 1 bps to 255 bps. The US CDX HY widened 3 bps to 323 bps. European bourses were mostly flat to 0.7% lower, except for the DAX (+0.5%), FTSE MIB (+0.3%) and IBEX 35 (+0.1%). In the US, the S&P 500 fell 0.1%, while the Nasdaq gained 0.1%.
• In Asia this morning, the Nikkei is down 0.3%, while the Hang Seng is 0.4% lower. US equity futures are mostly trading higher. WTI and Brent are USD 58.4/bbl and USD 62.0/bbl, respectively.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: China Jinmao, West China Cement, Biocon Biologics
• UST yields declined yesterday, led by the front end, following the Fed’s 25-bp rate cut and announcement that it will commence T-bill purchases. The UST curve bull steepened sharply, with the yield on the 2Y UST falling 8 bps to 3.54%, while the yield on the 10Y decreased 4 bps to 4.15%.
• Fed-dated OIS continued to price in two rate cuts in 2026 (one before June and another by October), despite the FOMC’s dot plot indicating just one cut for 2026. Equities climbed, with the S&P 500 rising 0.7% to 6,887.

• On 30 April, Haikou Meilan International Airport entered a SPA with Hainan Airport Infrastructure (600515 CH) to sell its Hainan Meilan International Airport (357 HK) 50.19% stake at RMB9.85 (HK$10.62).
• The SPA precondition is satisfied, and the SPA will be completed within 20 business days. Completion will trigger an unconditional MGO at HK$10.62.
• Tendering is likely to be low as the offer is unattractive. At the last close and for a mid-February 2026 payment, the gross/annualised spread is 0.2%/1.1%.

• HashKey (3887 HK) is looking to raise up to US$215m in its upcoming Hong Kong IPO.
• It operates the largest licensed crypto exchange in Hong Kong.
• In this note, we examine the IPO dynamics, and look at the firm’s valuation.

• JD Industrials (7618 HK) raised around US$383m, after pricing in its Hong Kong IPO at the mid-point.
• JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
• We looked at the company’s past performance in our earlier notes. In this note, we talk about the trading dynamics.

• At the top end of the price range (HK$6.95), HashKey (3887 HK)‘s IPO equals a FY26F P/S of 14.9x, and this is not a particularly appealing level. 
• While it is the industry leader in the region and Hong Kong, it is expected to stay in the red for FY25-27, making a PER comparison meaningless. 
• Tiny public shareholder base, cryptocurrency volatilities, and the increasingly competitive environment heightened risks. Only a low-end IPO price, or 12.7x FY26F P/S, is attractive.

• Poised to capture the full recovery of Chinese international travel, SIA’s primary asset, Shanghai Pudong International Airport (PVG), stands as China’s premier international gateway. The ongoing recovery in passenger volumes, particularly on lucrative international routes, is the primary catalyst for earnings growth.
• Non-aeronautical revenue, especially from duty-free concessions, represents a significant value driver. The upcoming renewal of duty-free contracts from 2026 provides a potential upside, although recent negotiations have sometimes favored the operator, indicating a key area to monitor.
• Massive infrastructure investment, including the Phase IV expansion and a new T3 terminal, will solidify PVG’s long-term competitive position as a mega-hub in Asia. This expansion is designed to increase annual passenger capacity to 130 million, accommodating future growth in the Yangtze River Delta region.

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• Revenue growth is just at the industry level and the growth rate is lower than the CAGR of market size of domestic brands. So, CHANDO is not a fast-growing company.
• Profit margin is disappointing due to high selling and marketing costs. Net profit fluctuated. This reflects that CHANDO’s profit model is not yet stable, with relatively weak risk resistance capacity
• Due to lower performance growth and profit margin, we think valuation of CHANDO would be lower than peers such as Giant Biogene, Mao Geping, Chicmax in Hong Kong market. 

• ANE Cayman Inc (9956 HK)‘s Offer, by way of a Scheme from Centurium Partners, a pre-IPO investor, in tandem with Temasek, has displayed some unique (unusual?) firsts. 
• There is the 9%+ stake held by CDH – another pre-IPO investor – a shareholder that fails to appear in subsequent annual/interim reports; or even Hong Kong disclosure announcements.
• Then late last week, the Offeror opted not to raise the cap on the scrip option alternative, despite shareholders expressing interest. 

• Tencent is a dominant force in China’s internet landscape, built upon the vast user ecosystems of its social platforms, WeChat and QQ, which serve as powerful distribution channels for its other businesses.
• The company’s primary revenue drivers are Value-Added Services (VAS), encompassing the world’s largest online gaming business and various digital content subscriptions, alongside a rapidly growing FinTech and Business Services segment.
• While facing significant domestic competition and a dynamic regulatory environment, Tencent is pursuing future growth through international expansion, particularly in gaming, and substantial investments in enterprise-facing technologies like cloud computing and AI.

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• The Hang Seng Index (HSI INDEX) rally has lost traction since mid-September. The index seems to be approaching a corrective phase.
• Our model signaled a modestly overbought state at the end of last week, but the index went down pretty fast this week: it has already breached the median support (25440). 
• This insight will analyze the model to find support entry zones to play short-term rallies or to take profit from hedges. 

• CiDi Inc. is a high-growth, market-leading provider of autonomous driving solutions for commercial vehicles in China, with a dominant position in the niche but rapidly expanding autonomous mining truck sector.
• The company has demonstrated explosive revenue growth, driven by its core autonomous driving segment. However, this growth is accompanied by significant operating losses, negative cash flow, and worsening liquidity, making its upcoming Hong Kong IPO critical for funding future operations and expansion.
• Key risks for investors include high customer and supplier concentration, intense competition in the autonomous vehicle space, and execution risk associated with its ambitious international expansion plans.

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• In June 2025, Beijing Geekplus completed an initial public offering at fixed IPO offer price of HK$16.80, raising ~HK$2.8B of net proceeds in Hong Kong.
• A Beijing-based AMRs company announced interim results for the six months ended Jun-25 and posted strong revenue growth of ~31% y/y coupled with improving profitability. 
• The stock peaked at HK$33.90 (~14x FY25 P/S) in October and fell ~38% over the next month. The company’s cornerstone lockup will expire on January 8, 2026.

• AVATR Technology (1913753D CH) is looking to raise about US$1bn in its upcoming Hong Kong IPO. The deal will be run by CICC and CITIC.
• AVATR Technology is a New Energy Passenger Vehicle (NEPV) brand focused on delivering a “new-luxury emotionally intelligent mobility experience” that combines aesthetic design, advanced intelligent features and strong product performance.
• AVATR has launched four mass-produced models which offer both pure electric (BEV) and range-extended powertrain (REEV) options. These models span a wide price range between RMB200,000 and RMB700,000.

• NetEase is a dominant force in China’s gaming market, second only to Tencent, with a proven track record of developing and operating highly successful and long-running PC and mobile games, which form the bedrock of its revenue and profitability.
• The company is actively pursuing a global expansion strategy to diversify its revenue base beyond China, establishing overseas studios and investing in international talent to create content for a global audience. This move is crucial for mitigating risks associated with the domestic regulatory environment.
• Beyond its core gaming business, NetEase is cultivating a diversified ecosystem that includes its online education service (Youdao), a popular music streaming platform (NetEase Cloud Music), and other innovative businesses, although these currently contribute a smaller portion of overall revenue.

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• Foshan Haitian Flavouring & Food Company (3288 HK), China’s leading condiments company, raised around US$1.5bn in its H-share listing. The lockup on its cornerstone investors is set to expire soon.
• FHCC is China’s leading condiments company within its main product categories of soy sauce, oyster sauce, flavored sauce, specialty condiment products and other products.
• In this note, we will talk about the lockup dynamics and possible placement.

• CiDi Inc (CIDI HK) is looking to raise about US$200m in its upcoming Hong Kong IPO.
• CiDi is a leading autonomous driving technology provider for commercial vehicles in China, with a strong foothold in the autonomous mining segment.
• In our previous note, we looked at the firm’s past performance. In this note, we talk about the updates from its recent filing.

• Competition in the entire GLP-1 market is constantly intensifying and evolving, which is expected to shift from the current focus solely on BMI indicators to a comprehensive patient-centered management model.
• XW003 faces the challenge of head-to-head trials with competing drugs. There could be uncertainties in future clinical trials of XW004, XW014. Commercialization is a tough task for Sciwind’s GLP-1 pipeline.
• The total peak sales of XW003, XW004 and XW014 could be RMB5-7 billion. Valuation of Sciwind could be lower than peers such as Innovent Biologics (1801 HK), Innogen (2591 HK).  

• There are 2 constituent changes for the CSI Hong Kong Connect Internet Index in December. Plus there are large capping changes for some stocks.
• Estimated one-way turnover at the rebalance is 11.9% and the round-trip trade is HK$26.6bn (US$3.4bn). There are 16 stocks with more than 1x ADV to trade.
• The adds drifted lower vs the deletes in September and October but have started outperforming in December. There could be more outperformance following announcement of the index changes.

• The deliveries still grew strongly by 24% YoY in November 2025.
• We believe Geely will take BYD’s place as the largest Chinese producer.
• We also believe the stock has an upside of 49% for the next twelve months.

• Jinke Smart Services (9666 HK)’s revised composite document relating to Boyu’s enhanced offer of HK$8.69 will be despatched on 9 December. The delisting EGM is on 24 December.
• The enhanced offer is conditional on the shareholders’ approval of the delisting resolution (low risk) and the 90% minimum acceptance condition from disinterested shareholders (high risk).
• Acceptances have not budged since 18 November, which explains Boyu’s introduction of two acceptance options on 4 December. The 90% minimum acceptance condition remains problematic. 

• HashKey Digital Asset Group Lt (2365361D HK) is looking to raise at least US$200m in its upcoming Hong Kong IPO.
• It operates the largest licensed crypto exchange in Hong Kong.
• In this note, we look at the firm’s past performance.

• After a tragic 61.4pp underperformance against the HSI in 2025, the market is almost unanimously bearish on Meituan (3690 HK), which presents opportunities in 2026.
• Negative news did not push it further down; P/B is at over 1SD below average, and net cash-to-share price is 5.6pp above the historical average.
• 3Q25 margins are so depressed that sustaining the price war is difficult. As the 7th-heaviest HSI constituent, it is the one to move the Index next year. 

• Ping An L&H: quality-focused restructuring has nearly doubled agent productivity since 2019, pushing NBV to post-Cvoid highs despite a much smaller agency force.
• Ping An P&C: tech integration and enablement is closing the gap vs. market leader in product distribution and customer acquisition.
• Integrated finance and health/senior care strategy presents cross-selling opportunities and differentiated upside not yet priced in.

• Xiamen Tungsten holds a dominant position in the global tungsten market, benefiting from a vertically integrated business model that spans from mining to high-value-added downstream products.
• Strategic expansion into new energy materials, particularly battery cathodes, positions the company to capitalize on the rapid growth of the electric vehicle (EV) and energy storage markets.
• While exposed to commodity price volatility and regulatory risks, the company’s strong market share, diversified operations across tungsten, rare earths, and battery materials, and consistent financial performance provide a solid foundation for future growth.

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• After suspending shares for near-on three weeks, Boyu had a change of heart on the 18th November, and tabled a delisting Offer for Jinke Smart Services (9666 HK). 
• Boyu is offering HK$8.69/share IF the Scheme-like vote and 90% tendering conditions are satisfied. Failing that, the unconditional MGO price of $6.67/share is the fall-back.
• The Revised Composite Doc is now out, with the EGM on the 24th December. The IFA says “fair & reasonable“. They said the same at HK$6.67/share. 

• Guangdong Topstar Technology is an integrated industrial automation solutions provider in China, focusing on intelligent equipment such as industrial robots, injection molding machines, and CNC machines. The company aims to provide turnkey smart factory solutions, leveraging its core technologies in controllers, servo drives, and vision systems.
• The company is experiencing severe financial distress, evidenced by a dramatic decline in revenue and a shift to a significant net loss in the most recent full fiscal year. This is corroborated by deeply negative multi-year compound annual growth rates (CAGRs) for both revenue and net income.
• While Topstar operates in the high-growth Chinese industrial automation market, which benefits from strong secular tailwinds like rising labor costs and government support, its recent performance indicates significant execution challenges and intense competitive pressures from both domestic and international players.

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• InxMed, a China-based clinical-stage biotech company, is looking to raise at least USD 100 million via a Hong Kong listing. CITIC and CCBI are the joint book runners.
• In this note, we look at the company’s core product, ifebemtinib, and assess the selling point around the core product.
• We also look at the company’s pre-IPO investors and management team.

• HK$77bn/Day of gross SOUTHBOUND activity last week vs HK$88bn the week before, HK$100+bn the week before. Gross flows are winding down.
• Watch for news on the Dual Counter (RMB) Trading eligibility for SOUTHBOUND near-term. That could re-up the pace .
• 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 – free – for all SK readers.

• NIO (NIO US) is a Chinese premium electric vehicle manufacturer listed on three exchanges. 
• NIO’s Q4 deliveries guidance was below expectations, and sales momentum is on a declining trend. Sustainably hitting its 20% gross margin target and achieving breakeven in 2026 seems a stretch.  
• NIO’s valuation is stretched, trading at a material premium to the median EV/Sales and growth-adjusted EV/Sales multiples of Chinese EV peers. 

• Hs outperformed As on average by 0.99% within the liquid AH pair universe over the past two weeks. Beautiful Skew Behaved Badly.
• Quiddity H/A Portfolio performance slightly negative over two weeks, both outright and alpha.
• 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 – free for all SK readers.

• Based on 2025 revenue forecast of RMB24.1bn and the IPO price range, P/S is about 1.28-1.56x, higher than ZKH but lower than Ww Grainger. This is a reasonable valuation range.
• The median IPO price range (HK$14.1/share) is a more likely/relatively safe outcome.This not only acknowledges JD Industrials’ leading position/growth story, but also partly reflects the market’s perception of its challenges.
• The IPO pricing is the result of seeking a balance between the “premium of industry leaders” and “its shortcomings”.However, future valuation depends on whether JD Industrials can solve fundamental issues.

• Suzhou Novosense Microelectron (688052 CH), an analog chips producer, raised around US$285m in its H-share listing.
• According to Frost & Sullivan, in terms of revenue from analog chips in 2024, SNM ranked fifth among Chinese analog chip companies in the Chinese analog chip market
• We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

• 52TOYS Development filed to go public in Hong Kong. The Beijing-based toymaker is planning H-share listing that could raise up to $200M.
• In my second insight about 52TOYS IPO, I discuss IPO valuation, examine competitive landscape and focus on comparable company analysis.
• 52TOYS manages 35 proprietary IPs and 80 licensed IPs, including pop, sci-fi and cultural IPs. The company collaborates with 400+ distributors, covering 20,000+ sales outlets. 

• Shenzhen H&T Intelligent is a major manufacturer of intelligent controllers for home appliances and power tools, strategically expanding into high-growth areas like automotive electronics and the Internet of Things (IoT).
• The company exhibits a strong long-term revenue growth trajectory, with a 10-year CAGR of 27.27%; however, recent performance shows significant margin compression and a concerning 3-year decline in net income and EPS.
• Valuation appears stretched, with a P/E ratio of 46.3x, which seems elevated given the recent deterioration in profitability and negative free cash flow, suggesting a high-risk, high-growth investment profile.

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• I tally 37 – mostly firm, mostly Asia-Pac – arb transactions currently being discussed and analysed on Smartkarma. Those arbs metrics and upcoming events are detailed below.
• Three new deals were discussed on Smartkarma this week: Predictive Discovery (PDI AU), African Gold Ltd (A1G AU), and Low Keng Huat Singapore (LKH SP).
• Key updates/news also took place on: ANE Cayman Inc (9956 HK), Steadfast (SDF AU), and Spindex Industries (SPE SP).

• TOP TOY is expected to IPO in 2026. The company has completed a ~$60M Series A round that was led by Temasek at a ~$1.3B post-money valuation in July.
• In my insight, I discuss IPO valuation, update relative valuation table and examine competitive landscape among domestic and international toymakers.
• TOP TOY revenue growth accelerated in 2025 coupled with improving profitability and growing free cash flows. TOP TOY was a major growth engine for MINISO’s business in 3Q.

• Emeren Group’s largest shareholder, Shah Capital, plans to take the company private at $2.00/share, with a 13% spread.
• Shah Capital owns 36% of SOL, requiring $65m for the buyout, with no financing concerns reported.
• A competing bid from EEW Renewables was declined due to concerns about financing and track record credibility.

• Quiet trade across Hong Kong Single Stock this week with HSI’s weekly range near the lows of the year.
• Implied vols were mixed and are still clinging to the lowest levels of the year.
• Options activity lower week over week, led by declines in Put trading.

• Simandou’s arrival and softer mill output signal a clear shift toward weaker near-term demand, even as some investors position for policy surprises.
• Technical signals point to stretched momentum, with the broader setup now tilting toward elevated odds of a near-term mean-reversion pullback.
• The 65–62 spread climbed sharply this week, while the 62–58 spread moved lower, marking a notable divergence across grade differentials.

• In today’s Morning Views publication we comment on developments of the following high yield issuers: Greentown China
• UST yields rose 2-4 bps yesterday, led by the front end, following the strong jobless claims data. The yield on the 2Y UST jumped 4 bps to 3.52%, while the yield on the 10Y UST climbed 3 bps to 4.10%. Fed-dated OIS were steady, and continued to price in a 92% probability of a rate cut next Wednesday.
• Equities edged up slightly towards record high levels. The S&P 500 and Nasdaq rose 0.1% and 0.2% to 6,857 and 23,505, respectively.

• Back on the 22nd August 2025, SOE-backed Dongfeng Motor (489 HK) announced a privatisation; together with a concurrent listing of its EV arm, VOYAH. The two proposals are interconditional.
• In its October application proof, VOYAH turned a profit in 7M25.  The market was implying a price-to-trailing-sales of 1.5x for VOYAH, versus the basket average of 2.1x. It’s now ~1.2x.
• Key PRC reg approvals (Mofcom/NDRC/SAFE) remain outstanding. Meanwhile, a basket of peers are down 21% since the dual proposals were announced. And their average price-to-trailing-sales are down to 1.7x. 

• The consortium has decided NOT to exercise its right to increase the ANE Cayman Inc (9956 HK) share alternative cap from 5.00% to 7.50% of outstanding shares. 
• The positive read-across is that it signals the consortium’s confidence that the vote will pass, as reflected in the quick decision not to lift the cap (deadline was 12 December). 
• The negative readacross is that shareholders requesting the scrip option likely exceeded the 7.5% upper threshold, and the consortium is hoping that these shareholders will instead take the mix option.

• Shenzhen Mindray Bio-Medical Electronics (300760 CH) (SMBE), a provider of medical devices, is looking to raise about US$2bn in its upcoming H-share IPO
• SMBE is a diversified global medical device enterprise with its products spanning In Vitro Diagnostics (IVD), patient monitoring and life support, medical imaging, along with an emerging business portfolio.
• In this note, we look at its past performance and other deal dynamics that might impact the listing.

• Tuhu sets up operations in Malaysia, its first overseas expansion outside of Greater China.
• We think Tuhu can dominate the market within 3-4 years, as there are no local establishments that can match its infrastructure, know-how, and capital base. 
• Fair value of HKD23 implies 22x FY26 PE – average for US peers. A bargain with 3-year CAGR of 30%, net cash, and churns high free cash flow.

• FUTU’s risk-reward is asymmetric:  Structurally low valuation, active consensus upgrades and a near-term catalyst (HK crypto VATP license), which can boost further upgrades (2026e) sets up a compelling long entry.
• HK-VATP enables FUTU to expand its crypto related revenues, product offerings and margins, and remove third-party dependency. With crypto <2% assets, this new earnings leg is entirely absent from consensus.
• FUTU’s pullback to ~15.6x FY2 P/E puts it at the bottom of a ~15x-25x – reasonable valuation band. With upgrades and catalysts ahead, it stands as a strong rerating candidate.

• Guangdong Tianyu Semiconductor (2223725D CH) raised around US$224m in its HK IPO.
• It was founded in 2009, and is the largest domestic PRC SiC epitaxal wafer manufacturer both in terms of revenue and sales volume, as of 2024.
• We have covered various aspects of the deal in our previous note. In this note, we will talk about the demand and trading dynamics.

• As forecast, there will be 3 constituent changes for the iShares China Large-Cap (FXI US) at the close of trading on 19 December.
• Two of the inclusions will also have inflows from the FGlobal Index at the same time, while the third is an HSCEI INDEX add at the close tomorrow.
• The HA premiums for CATL (3750 HK) and Jiangsu Hengrui Pharmaceuticals (1276 HK) dropped prior to lock-up expiry and there could be a short-term premium expansion closer to index/ETF inclusion.

• JD Industrials (7618 HK) is now looking to raise up to US$421m, in its Hong Kong IPO.
• JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
• We looked at the company’s past performance in our earlier notes. In this note, we talk about valuations.

• CMOC (603993 CH) and Sungrow Power Supply (300274 CH) will replace S.F. Holding (002352 CH) and Bank of Jiangsu (600919 CH) in the ETFs at the close on 19 December.
• Passive trackers will need to trade between 0.1-0.5 days of ADV in the constituent changes.
• The adds have outperformed the deletes by a big margin over the last 6 months. After a period of underperformance in November, the adds have started moving higher again.

• JD Industrials (7618 HK) is a leading industrial supply chain technology and service provider in China. It has launched an HKEx IPO to raise up to US$420 million.
• I previously discussed the IPO in Jingdong Industrials (JDI) IPO: The Investment Case. 
• In this note, I present my forecasts and valuation. My analysis suggests that the IPO price range is attractive.

• Unisound AI Technology, a Beijing-based AI solution provider focusing on the sales of conversational AI products and solutions, completed an initial public offering at HK$205/share in June.
• The company raised HK$251M in its Hong Kong IPO, including additional net proceeds from the over-allotment shares issued upon the full exercise of the over-allotment option.
• The stock peaked at HK$879.00 in September and fell ~41% over the next two months. The company’s early IPO lockup will expire on December 29, 2025.

• Mandi (MANDI HK) is looking to raise up to US$200m in its upcoming Hong Kong IPO. The deal will be run by Huatai.
• Mandi is a leading specialized consumer pharmaceuticals company in China, primarily focused on skin health (including hair health) and weight management.
• The company was spun off from 3SBio (1530.HK) to operate as a distinct entity. 

• Although JD Industrials (7618 HK) is China’s largest MRO player, its maximum IPO price of HK$15.5 implies a rich FY26 PER of 28.2x.
• The stock’s highest justified valuation is a 20% premium to the sector average FY26F PER, implying only 8% upside from the IPO price, providing a limited safety margin.
• We think it will only be attractive to price below the mid-point of the IPO range, that is, HK$14.10.

• JD Industrial launched its Hongkong IPO aiming to raise up to HK$3.3B. The company plans to sell 211.2M shares at a price band of HK$ 12.7-HK$ 15.5 per share.
• Proceeds to be used to enhance industrial supply chain capabilities, for business expansion across geographies, for potential strategic investments or acquisitions and for general corporate purposes and working capital needs.
• Topline growth momentum expected to remain strong in the near term alongside strengthening margins. We feel JD Industrial issue is fairly priced and investors can surely subscribe to the offer.

• Mandi’s valuation logic is drifting away from the main line of 3SBio.Mandi is “good asset but not core asset” within 3SBio system, so it’s difficult to drive up overall valuation. 
• Innovative drug R&D will be the main driver for future valuation growth in “post-Mandi era”. The Placing can be regarded as the continuous development of 3SBio after Mandi spin-off .
• 3SBio is undervalued. Valuation would be higher than Sino Biopharm and may also surpass Akeso, Hengrui in the future if its SSGJ-707 can deliver good clinical data in future trials.

• We expected growth to improve, however, on the contrary growth has slowed, and there seem to be limited short to medium term positive catalysts.
• Pricing pressure is still a problem, and competition is intense especially in the fragmented medical device market.
• Given the relatively low growth outlook, and the fact that Sinopharm is largely a distribution model, we see limited opportunity for the company to re-rate from the current level.