China Archives | Page 21 of 199 | Smartkarma

In today’s briefing:

Pinduoduo (PDD): Plunged After Weak Results, But Overly Impacted
FS.COM Limited Pre-IPO Tearsheet
Hong Kong Single Stock Options Weekly (June 02 – 06): Broad Gains as Option Activity Fades

Pinduoduo (PDD): Plunged After Weak Results, But Overly Impacted

By Ming Lu

The stock price plunged by 16% after the 1Q25 results.
The two major competitors benefited from the state subsidies, but PDD did not.
However, PDD balances well between revenue growth and operating cash flow.

FS.COM Limited Pre-IPO Tearsheet

FS.COM Limited (FS) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by CICC, China Sec, and CMS.
FS is the world’s second largest online DTC networking solution provider in terms of revenue in 2024, as per Frost & Sullivan (F&S).
It focuses on providing general networking solutions and high-performance networking solutions mainly to the US and Europe, serving more than 450,000 customers and covering approx. 60% of Fortune 500 companies.

Hong Kong Single Stock Options Weekly (June 02 – 06): Broad Gains as Option Activity Fades

By John Ley

A weekly roundup of key option and price metrics for Hong Kong single stocks.
Option volumes on par with the lowest levels seen over the past 6 months.
Implied volatility appears to have broadly settled around current levels.

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Jun 06

Daily Brief China: Tam Jai International, Tencent and more

In today’s briefing:

Tam Jai (2217 HK): Anxiety Creeps in Ahead of the Scheme Document
Tam Jai (2217 HK): Toridoll (3397 JP)’s Excellent Offer. Still.
Asian Equity: Performance of Our Quant Baskets: Indian MidCaps, Asian Dividend Yields Rule the Roost

Tam Jai (2217 HK): Anxiety Creeps in Ahead of the Scheme Document

By Arun George

The spread to TORIDOLL Holdings Corporation (3397 JP)’s HK$1.58 offer for Tam Jai International (2217 HK) has risen to 9.7% ahead of the scheme document’s release.
Several readers have asked whether the Tam Jai offer will mirror the Goldlion and Soundwill deal break. The schemes share similarities but are also different in several ways.
The scheme’s vote risk has undoubtedly increased partly due to the recent 2025 results and deal breaks. This situation warrants a safety-first approach.

Tam Jai (2217 HK): Toridoll (3397 JP)’s Excellent Offer. Still.

By David Blennerhassett

On the 17th Feb, a specialty restaurant-operator Tam Jai (2217 HK) announced an Offer, by way of a Scheme, from TORIDOLL (3397 JP) at HK$1.58/share, a 75.56% premium to undisturbed.
This should get up; but really, given the recent Soundwill Holdings (878 HK) and Goldlion Holdings (533 HK) failures, small, illiquid arbs are not the preferred haven for arb investors.
The Scheme Doc is now out, with a Court Meeting on the 30th June, and payment on or before the 26 August. The IFA (Lego Corporate) says “fair & reasonable“.

Asian Equity: Performance of Our Quant Baskets: Indian MidCaps, Asian Dividend Yields Rule the Roost

By Manishi Raychaudhuri

Of our seven quantitative stock baskets, four have operated for more than three months. We measure the performances of these four – Consistent Compounders, SMID Compounders, Dividend Yielders, Indian Mid-Caps.
Consistent Compounders, though up since inception, has underperformed MXASJ mildly. SMID Compounders has underperformed sharply. Asian Dividend Yielders has outperformed handsomely and Indian Mid-Caps, by a stupendous margin.
We think the Indian mid-cap basket could take a short-term breather. The Dividend Yield basket could outperform, as investors’ preference for yields in uncertain times could continue for now.

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Jun 05

Daily Brief China: Pop Mart International Group L, Henderson Land Development, Sichuan Kelun-Biotech Biopharm, Bank of Jiangsu , Guangzhou Xiao Noodles Catering Management, CMOC Group , Jiangsu Hengrui Medicine, Mao Geping Cosmetics, Chow Tai Fook Jewellery, Shanghai Forest Cabin Biological-Tech and more

In today’s briefing:

FXI Rebalance: Pop Mart, SF Holding In; China Merchant Sec, China Railway Out
Henderson Land (12 HK): Large Passive Flow Coming Up as Shorts Cover
Kelun-Biotech Placement – Recent Run-Up Makes Its Tricky
China A50 ETF Rebalance: One Set of Changes
Guangzhou Xiao Noodles Catering Management Pre-IPO – Fast-Growing Noodle Chain Navigates Competition
CMOC Group Limited (HKEX: 3993) – High-Growth, Low-Cost Producer Positioned for Re-Rating
Jiangsu Hengrui Medicine (600276 CH): ADC Drug Approval Presents Long-Term Opportunity
Mao Geping IPO Lockup – Stock Is up 4x, US$400m Cornerstone Lockup Release
Chow Tai Fook (1929 HK) – H2FY25 Outlook, Cost Management & Pricing Optimization to Drive Growth.
Shanghai Forest Cabin Biological-Tech Pre-IPO Tearsheet

FXI Rebalance: Pop Mart, SF Holding In; China Merchant Sec, China Railway Out

Pop Mart (9992 HK) and S.F. Holding (6936 HK) will replace China Railway Group (390 HK) and China Merchants Securities (6099 HK) in the iShares China Large-Cap (FXI) (FXI US).
Passive trackers will need to buy between 0.4-0.6x ADV in the adds and sell between 0.5-1.3x ADV in the deletes. There are some small capping flows too.
There are a lot of shorts in Pop Mart (9992 HK), China Railway Group Ltd H (390 HK) and China China Merchants Securities Co Ltd (H) (6099 HK).

Henderson Land (12 HK): Large Passive Flow Coming Up as Shorts Cover

Henderson Land Development (12 HK) will be added to a global sector index at the close on 20 June.
Estimated passive buying in Henderson Land Development (12 HK) is 42m shares (US$131.5m; 7.5x ADV).
The stock is up over the last 2 months as shorts have covered. Performance is in line with peers and positioning does not appear to be excessive.

Kelun-Biotech Placement – Recent Run-Up Makes Its Tricky

By Akshat Shah

Sichuan Kelun-Biotech Biopharm (6990 HK) is looking to raise up to US$200m from a primary placement. The offering is priced at HK$ 330.2-341, a 5-8% discount to last close.
The company plans to use the proceeds for research and development, clinical trials of its core products and as working capital.
In this note, we will talk about the placement and run the deal through our ECM framework.

China A50 ETF Rebalance: One Set of Changes

The iShares A50 China (2823 HK) and CSOP China A50 (HKD) (2822 HK) ETFs will rebalance their holdings at the close on 20 June.
Bank of Jiangsu (600919 CH) will replace Great Wall Motor (601633 CH) in the ETFs and passives will need to trade between 0.4-0.6x ADV in the stocks.
This change is a surprise to us and there could be a short-term move in the stocks.

Guangzhou Xiao Noodles Catering Management Pre-IPO – Fast-Growing Noodle Chain Navigates Competition

Guangzhou Xiao Noodles Catering Management (GXNCM) is looking to raise about US$200m in its upcoming Hong Kong IPO.
GXNCM has shown strong growth momentum by expanding its network of corporate-owned restaurants and improving overall profitability, benefiting from post-COVID recovery and economies of scale, with operational performance turning positive.
However, its reliance on price cuts to stay competitive, coupled with weakening same-store sales and a highly fragmented market, raises concerns about long-term sustainability.

CMOC Group Limited (HKEX: 3993) – High-Growth, Low-Cost Producer Positioned for Re-Rating

By Rahul Jain

EBITDA more than doubled (25% CAGR) over 3 years, with copper and cobalt output up ~3.5x and ~5.7x on ramp-up of TFM and KFM.
$4.3 bn invested in DRC; low-cost leaching drives margins; gold entry via Cangrejos adds diversification and long-term optionality.
Strong cash flows, growth pipeline, and ~4x EV/EBITDA valuation position CMOC for sustained upside amid rising energy transition metal demand.

Jiangsu Hengrui Medicine (600276 CH): ADC Drug Approval Presents Long-Term Opportunity

By Tina Banerjee

Jiangsu Hengrui Medicine (600276 CH) received conditional marketing approval for its self-developed Class 1 innovative drug, Trastuzumab Rezetecan for Injection (SHR-A1811).
In 1Q25, Jiangsu Hengrui reported revenue growth of 20% YoY to RMB 7.2B. Innovative drugs and Licensing should help keep this momentum in near future.
The near-term trigger for the stock would be a further marketing approval from the US FDA.

Mao Geping IPO Lockup – Stock Is up 4x, US$400m Cornerstone Lockup Release

Mao Geping Cosmetics raised around US$345m in its Hong Kong IPO. The lockup on its cornerstone investors is set to expire soon.
Mao Geping Cosmetics (MGC) operates in the premium beauty segment. Operating via its two brands, MAOGEPING and Love Keeps, MGC offers a wide range of color cosmetics and skincare products.
In this note, we will talk about the lockup dynamics and possible placement.

Chow Tai Fook (1929 HK) – H2FY25 Outlook, Cost Management & Pricing Optimization to Drive Growth.

By Sreemant Dudhoria

Despite short-term demand headwinds, Chow Tai Fook Jewellery (1929 HK) remains well-positioned for structural growth via product premiumization(e.g.,CTF Rouge,Palace Museum), omni-channel scaling, and selective global expansion in culturally aligned markets.
Company continues to defend margins through product mix optimization (fixed-price gold up to 25.6% of gold RSV),disciplined SG&A control, and aggressive retail network rationalization.
Trading at ~26xx TTM P/E, it commands premium to peers, backed by industry-leading ROE (~25%),brand strength,and high dividend payout (~79%), though clear earnings rebound remains key to justify the multiple.

Shanghai Forest Cabin Biological-Tech Pre-IPO Tearsheet

Shanghai Forest Cabin Biological-Tech Co., Ltd. (SFC) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The deal will be run by Citic, and Huatai.
SFC is the leader among China’s premium domestic skincare brands with a focus on anti-wrinkle and firming skincare market In 2024, its flagship brand, Forest Cabin.
As of FY24, Forest Cabin had 188 SKUs with its core products at a recommended retail price range of RMB 200-800, targeting primarily consumers aged 25-40.

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Jun 04

Daily Brief China: BYD, Nexchip Semiconductor , New World Development, Bluefocus Communication Group Co, Ltd., Xiaomi Corp, Lepu Medical Technology A, Lens Technology , Plover Bay Technologies, Wuxi Lead Intelligent Equipmen and more

In today’s briefing:

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)
CNI Semiconductor Chips Index Rebalance: One Change with Big Impact
NWD (17 HK): Markets Pricing In A Bust
ChiNext/ChiNext 50 Index Rebalance: US$1.3bn Round-Trip Trade
Xiaomi (1810 HK): 1Q25, Home Appliance Up by 59% and Capacities Under Construction
Quiddity ChiNext/ChiNext 50 Jun25 Results: 23/26 Changes Correct Despite Methodology Change
[Xiaomi Inc. (1810 HK, BUY, TP HK$55) TP Change]: Trade-In Subsidy Is Still the Main Driver
Lens Technology H-Share Listing: First Look
Plover Bay (1523 HK): Preview On Earnings For H1 2025
Wuxi Lead Intelligent Equipment A/H Listing – Market Leader but Has Been Facing Industry Headwinds

HSI, HSCEI, HSTECH, HSIII Index Rebalance: US$8.1bn of Flows Post Capping (June 2025)

The June rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today’s closing prices to cap the index constituent weights at 8%/12%. This leads to large flows.
The net round-trip trade across all stocks across the four indices is estimated at HK$63.55bn (US$8.1bn). There are 12 stocks with over 2x ADV to trade from passive trackers.
The trade size is much bigger than usual due to the inclusion of BYD in the HSTECH Index and due to a change in the FAF methodology for Secondary Listings.

CNI Semiconductor Chips Index Rebalance: One Change with Big Impact

There is 1 change for the CNI Semiconductor Chips Index that will be implemented at the close on 13 June.
Passive trackers are estimated to buy 2.7x ADV in Nexchip Semiconductor (688249 CH) and sell 1.5x ADV in Amlogic Shanghai (688099 CH).
The delete has outperformed the inclusion this year. With 8 days left to implementation of the changes and decent impact, there could be a short-term reversal.

NWD (17 HK): Markets Pricing In A Bust

By David Blennerhassett

0.052x P/B! That’s New World Development (17 HK)‘s current trailing P/B ratio; roughly a quarter of the next comparable real estate peer.
What’s new? The latest decline followed an announcement on the 30th May that it would defer payments on its perpetual bonds.
NWD’s 6.15% and 4.8% perpetuals fell to 23 cents and 15.5 cents on the dollar on 2nd June, suggesting the market is pricing in the possibility of a bust.

ChiNext/ChiNext 50 Index Rebalance: US$1.3bn Round-Trip Trade

There are 8 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index at the June rebalance.
We correctly forecast 7/8 and 8/8 for the Chinext Index adds/deletes and were 4/5 and 5/5 for the Chinext50 Index adds/deletes.
Based on the estimated passive tracking AUM, the round-trip trade across both indices is estimated to be CNY 9.55bn (US$1.33bn).

Xiaomi (1810 HK): 1Q25, Home Appliance Up by 59% and Capacities Under Construction

By Ming Lu

In 1Q25, total revenue grew by 47% YoY with home appliance up by 59% YoY.
Both home appliance and electric vehicle will expand their capacities.
The stock has an upside of 29% and a price target of HK$66 for the next twelve months.

Quiddity ChiNext/ChiNext 50 Jun25 Results: 23/26 Changes Correct Despite Methodology Change

By Shifara Samsudeen, FCMA, CGMA

The June 2025 index review results for the ChiNext and ChiNext 50 indices were announced yesterday.
There will be eight changes for the ChiNext index and five changes for the ChiNext 50 index.
In this insight, we take a look at our final flow expectations for the the ChiNext and ChiNext 50 index rebal events.

[Xiaomi Inc. (1810 HK, BUY, TP HK$55) TP Change]: Trade-In Subsidy Is Still the Main Driver

By Eric Wen

Xiaomi reported C1Q25 top line, non-IFRS operating income and IFRS net profit 2.0%, 41% and 57% vs. our estimate.
While there are a few product positives supporting outperformance, the main driver is still trade-in subsidy (TIS), which will start to end in C3Q25;
We continue to view Xiaomi as having an enviable market position as a “Huawei without the sanctions”, its valuation has also become very rich.

Lens Technology H-Share Listing: First Look

Shenzhen-Listed iPhone glass supplier Lens Technology (300433 CH) has filed for a listing on HKEx and plans to raise proceeds of around US$1-1.5bn.
The company is heavily reliant on smartphones (mainly iPhones) however has diversified into other verticals. While this has helped grow revenues, margins have continued to decline.
Though some exemptions have been given, the potential for further US reciprocal tariffs could increase costs and disrupt supply chains impacting Lens.

Plover Bay (1523 HK): Preview On Earnings For H1 2025

By Sameer Taneja

We expect the Trump tariffs announced on Taiwan (base for suppliers/production of Plover Bay) to slightly affect growth rates for H1 FY25 and estimate a 15%/13% YoY revenue/profit growth number.
A 32% tariff was imposed on Taiwan suppliers; however, electronic items, including routers, were subsequently excluded. Nonetheless, overall business sentiment had already been negatively impacted before these adjustments.
Trading at 19.4x FY25e earnings (assuming a reversion to 15% growth), the stock is somewhat fairly valued, although we love this name’s execution and long-term track record.

Wuxi Lead Intelligent Equipment A/H Listing – Market Leader but Has Been Facing Industry Headwinds

Wuxi Lead Intelligent Equipmen (300450 CH) aims to raise around US$400m in its H-share listing.
WLIE is a global platform-based intelligent equipment enterprise, offering intelligent equipment and solutions to a wide range of emerging and high-end manufacturing industries.
In this note, we look at its past performance and other deal dynamics that might impact the listing.

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Jun 03

Daily Brief China: ESR Group , Gansu Huangtai Wine Mktg Ind Co.,, Hang Seng Index, Eastroc Beverage Group, China Northern Rare Earth Group High-Tech, SunCar Technology Group and more

In today’s briefing:

ESR (1821 HK): A Shareholder Register Look-Through
CSI Liquor/ Alcoholic Drink Index Rebalance: Adds, Deletes & Capping Changes
HSI Tactical Outlook: Buy This Dip
Pre IPO Eastroc Beverage Group (H Share) – The Strength, the Concerns and the Outlook
China Northern Rare Earth (Ticker: 600111.SH): Dominant Force Riding REE Upswing
SDA: SunCar reports 1st quarter 2025 financial and operating results which showed strong revenue growth. The company continues to secure multiple partnerships and business agreements.

ESR (1821 HK): A Shareholder Register Look-Through

By David Blennerhassett

Today, I was the first analyst to gain access to ESR (1821 HK)‘s lesser-known shareholder register, a byproduct of investigative disclosure reports under s329 of the Securities and Futures Ordinance.
This is the same register discussed in Giordano (709 HK): A Closer Look At The Shareholder Register Ahead Of The SGM and L’Occitane (973 HK): Who Owns What, And When
It is also used by proxy solicitors. My takeaway, still, is that this Offer is a done deal. But yes; there are a few shareholder activists lurking in the register.

CSI Liquor/ Alcoholic Drink Index Rebalance: Adds, Deletes & Capping Changes

There is 1 add for the CSI Liquor Index and 1 add/ 2 deletes for the CSI Alcoholic Drink Index in June.
Gansu Huangtai Wine Mktg Ind Co., (000995 CH) will be added to the CSI Liquor Index and the CSI Alcoholic Drink Index.
There will be big selling in Kweichow Moutai (600519 CH) due to the stock being capped in both indices. Smaller capping flows in the other stocks.

HSI Tactical Outlook: Buy This Dip

By Nico Rosti

After a 7-week rally the Hang Seng Index (HSI INDEX) last week gave up and close the week down (CC=-1 on our WEEKLY LONG model).
The pullback continued on Monday, reaching 22668 and in our WEEKLY LONG model this price support zone is oversold.
The pullback may continue, so in this insight we are going to offer some perspective on possible support zones where to buy. We think this setback is a buy opportunity.

Pre IPO Eastroc Beverage Group (H Share) – The Strength, the Concerns and the Outlook

2024 is a milestone year. The weighted average ROE set a new high. Due to cost dilution brought by economies of scale, net profit growth was higher than revenue growth.
The risk of relying on a single category hasn’t been eliminated. Traditional advantages of offline channels are becoming saturated. There is a gap between channel structure and new consumer forces
Eastroc’s valuation is expected to be higher than the industry average and peers due to its higher growth rate, but investors needs to consider the H/A premium

China Northern Rare Earth (Ticker: 600111.SH): Dominant Force Riding REE Upswing

By Rahul Jain

CNRE posted a 727% YoY net profit surge in Q1 2025, driven by rising PrNd prices and strong volume growth, earnings momentum could continue amid recovering demand and operational leverage.
With exclusive access to the Bayan Obo mine—holding the world’s largest REE reserves—CNRE commands a near-monopoly in China’s rare earth supply chain.
Its dominant 70% share of national separation quotas ensures structural pricing power and long-term resource security.

SDA: SunCar reports 1st quarter 2025 financial and operating results which showed strong revenue growth. The company continues to secure multiple partnerships and business agreements.

By Zacks Small Cap Research

SunCar Technology Group ((NASDAQ: SDA) is a leading Chinese cloud-based provider of digital enterprise auto services and auto eInsurance services in China.
The company offers one-stop, fully digital, on-demand automotive service systems to help enterprise clients build up their customer base and serve their end customers (auto owners).
The company has grown revenues rapidly in recent years, which we expect to continue in the near-to-midterm.

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Jun 02

Daily Brief China: Montage Technology , HealthyWay, Shanghai Rural Commercial Bank, Bestechnic Shanghai , Zhongyuan Environment A, Contemporary Amperex Technology (CATL), Zijin Mining Group , Sichuan Biokin Pharmaceutical, Water Oasis, Softcare and more

In today’s briefing:

SSE50/SSE180 Index Rebalance: Some Surprises Among the Adds; Deletes as Expected
KWEB Index Rebalance: HealthyWay In; East Buy Out
CSI300/CSI500/CSI1000 Index Rebalance: Changes Lead to US$12bn Trade
STAR50/STAR100 Index Rebalance: 10 Changes and US$1.4bn Trade
Quiddity CSI 1000 Jun25 Results: 200 Changes; US$2Bn+ One-Way
ECM Weekly (2 June 2025) -Indigo, ITC, EBOS, Isuzu, Foshan Haitian, Lens Tech, Seres, Schloss, Aegis
Zijin Mining (601899 CH / 2899 HK): Evaluating the Impact of Kakula Suspension
China Healthcare Weekly (Jun.1)-Akeso/Summit’s Disappointing Ph3 Readout,Valuation Outlook of Biokin
Water Oasis H1 FY25 Results: An Improvement In Profitability And Cash 90% of Market Capitalization
Pre-IPO Softcare – Strong Performance Growth Momentum Would Continue

SSE50/SSE180 Index Rebalance: Some Surprises Among the Adds; Deletes as Expected

There are 4 changes for the SSE50 Index (SSE50 INDEX) and 18 changes for the SSE180 Index that will be implemented at the close on 13 June.
The SSE50 Index (SSE50 INDEX) deletes were in line with forecasts, and the index committee has used some discretion while picking the index inclusions.
The SSE50 Index adds have outperformed the deletes over the last few months and there could be a further move higher in the ‘surprise’ adds to the index.

KWEB Index Rebalance: HealthyWay In; East Buy Out

The June rebalance of the KraneShares CSI China Internet ETF (KWEB US) will take place at the close of trading on 13 June.
HealthyWay (2587 HK) will be added to the ETF while East Buy Holding (1797 HK) will be deleted. The passive trading will offer an opportunity to exit positions.
There is a huge lock-up expiry in HealthyWay (2587 HK) on 30 June and the stock could drop ahead of that. Then it could drop some more after lock-up expiry.

CSI300/CSI500/CSI1000 Index Rebalance: Changes Lead to US$12bn Trade

There are 7 changes for the CSI 300 Index, 50 changes for the CSI 500 Index and 100 changes for the CSI1000 Index that will be implemented on 13 June.
There are 240 unique names that are adds or deletes and the round-trip trade across all 3 indices is close to US$12bn.
The adds have outperformed the deletes for the CSI 300 Index and the CSI 1000 Index but underperformed for the CSI 500 Index.

STAR50/STAR100 Index Rebalance: 10 Changes and US$1.4bn Trade

There is 1 constituent change for the STAR50 INDEX and 4 changes for the STAR100 Index at the next rebalance that will be implemented at the close on 13 June.
We estimate turnover of 2.35% for the SSE STAR50 (STAR50 INDEX) and 4.9% for the STAR100 Index. The estimated round-trip trade is CNY 9.8bn (US$1.35bn).
There are multiple stocks that are adds or deletes for other indices and the passive flows will be a lot larger than just for the STAR50/STAR100 indices.

Quiddity CSI 1000 Jun25 Results: 200 Changes; US$2Bn+ One-Way

The June 2025 index review results for China’s CSI 1000 index were announced after market close on Friday 30th May 2025.
There will be 100 ADDs/DELs for CSI 1000 in the June 2025 rebalance.
The CSI 1000 index rebal event could trigger US$2.2bn in one-way flow.

ECM Weekly (2 June 2025) -Indigo, ITC, EBOS, Isuzu, Foshan Haitian, Lens Tech, Seres, Schloss, Aegis

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, Foshan Haitian Flavouring & Food (603288 CH) might launch its A/H listing this week.
On the placements front, there were a number of large deals across the region, with notable ones in ITC Ltd (ITC IN) and InterGlobe Aviation Ltd (INDIGO IN).

Zijin Mining (601899 CH / 2899 HK): Evaluating the Impact of Kakula Suspension

By Rahul Jain

A 4–6 month Kakula disruption could reduce Zijin’s 2025 copper output by 4–8%, cutting EBITDA by ~7–11%.
Ramp-Ups at Julong and Čukaru Peki can offset ~60–70% of the lost volume and partially protect margins.
Lithium is expected to grow from 8% to 20% of EBITDA by 2028, driven by 300kt LCE capacity from low-cost brine assets.

China Healthcare Weekly (Jun.1)-Akeso/Summit’s Disappointing Ph3 Readout,Valuation Outlook of Biokin

CR Sanjiu plans to transfer 49.8967% equity of Sanjiu (Anguo) and pay more attention to the quality of external M&As. China Resources+Tasly+KPC will be the core drivers of future performance.
Akeso’s first global phase 3 readout for ivonescimab was disappointing, which cast shadow on the final FDA approval. We shared our views on the outlook and valuation ahead.
The failure of HER3-DXd cast shadow over the outlook of HER3. We think Biokin is overvalued. Its valuation should be lower than Akeso and Kelun Bio.

Water Oasis H1 FY25 Results: An Improvement In Profitability And Cash 90% of Market Capitalization

By Sameer Taneja

Water Oasis (1161 HK) H1 FY25 results were encouraging and a step in the positive direction as revenue/PAT improved by -2.5%/116% YoY
The company declared a semi-annual dividend of 3.5 cents (6.7% annualized yield) for a 43% payout ratio. Net cash of 633 million HKD represents 90% of the market capitalization.
Trading at 6.0x FY25 PE with earnings stabilization, this is a great name to explore, although we would like to see an improvement in capital allocation.

Pre-IPO Softcare – Strong Performance Growth Momentum Would Continue

Softcare has established its core competitiveness of “low price + localization”, and has achieved success in Africa. Softcare hopes to replicate its business model in Africa to other markets.
Emerging Markets have seen sustained growth in market penetration of baby/feminine hygiene products. We’re optimistic about Softcare’s future performance growth due to “demographic dividend + consumption upgrade” in Emerging Markets.
Softcare has strong fundamentals and promising outlook. We think valuation of Softcare should be higher than Hengan International Group (1044 HK) due to higher profit margin and future growth potential.

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Jun 01

Daily Brief China: Suzhou Maxwell Technologies , Winner Medical, Avic Shenyang Aircraft, China Mobile, Flat Glass, Bestechnic Shanghai , Shanghai Rural Commercial Bank, Northeast Securities, Shenzhen Overseas Chinese (A), Suzhou Kematek and more

In today’s briefing:

STAR&CHINEXT 50 Index Rebalance: One Change in June Adds to Other (Larger) Index Flows
CSI Medical Service Index Rebalance: Six Changes with Decent Impact
Quiddity SSE 50/180 Jun25 Results: 44 Changes; US$1.5bn Collective One-Way Flows
China Mobile (941 HK) Poised for Pullback: A Tactical Low-Cost Options Play With High Upside
A/H Premium Tracker (To 30 May 2025): Narrow Premia Hs Worst Performers, BYD Relents
STAR Chip/ CES Chips/ All Share Semi Index Rebalance: Multiple Index Flows for Some Stocks
Quiddity CSI 300/500 Jun25 Results: 114 Changes; 88% Hit Rate; ~US$5bn One-Way
CSI All Share IB & Brokerage Index Rebalance: Northeast Replaces Harbin Hatou
CSI All Share Real Estate Sector Index Rebalance: Sector Reclassification Drives Changes
Quiddity CSI All Share Semiconductors Jun25 Results: 11 ADDs/DELs; Couple of Surprises

STAR&CHINEXT 50 Index Rebalance: One Change in June Adds to Other (Larger) Index Flows

There is one constituent change for the STAR&CHINEXT 50 Index in June with AVIC Chengdu Aircraft Co (302132 CH) replacing Suzhou Maxwell Technologies (300751 CH).
Passive trackers will need to buy 0.15x ADV in AVIC Chengdu Aircraft Co (302132 CH) and sell 0.4x ADV in Suzhou Maxwell Technologies (300751 CH).
AVIC Chengdu Aircraft Co (302132 CH) is a CSI 500 Index to CSI 300 Index migration in June, so there will be more buying in the stock.

CSI Medical Service Index Rebalance: Six Changes with Decent Impact

CSI announced the changes for the June rebalance after market close on 30 May and the changes will be effective after the close of trading on 13 June.
There are 6 changes for the index and we estimate passive buying of 0.7-2.4x ADV in the adds and passive selling of between 1-4.7x ADV in the deletes.
There will be capping inflows for Shenzhen Mindray Bio-Medical Electronics (300760 CH) and capping outflows for WuXi AppTec (603259 CH).

Quiddity SSE 50/180 Jun25 Results: 44 Changes; US$1.5bn Collective One-Way Flows

The June 2025 index review results for China’s SSE 50 and SSE 180 indices were announced after market close on Friday 30th May 2025.
There will be 4 ADDs/DELs for SSE 50 and 18 ADDs/DELs for SSE 180.
The SSE 50 and SSE 180 index rebal events could trigger US$1.3bn and US$210mn in one-way flows, respectively.

China Mobile (941 HK) Poised for Pullback: A Tactical Low-Cost Options Play With High Upside

By Gaudenz Schneider

With a 5-week rally China Mobile (941 HK) is in overbought territory and quantitative models flag potential for a pullback.
Options may be underpricing the downside risk, creating an attractive opportunity to buy cheap options with high payoff potential.
This Insight outlines an option strategy combining quantitative signals with volatility analysis.

A/H Premium Tracker (To 30 May 2025): Narrow Premia Hs Worst Performers, BYD Relents

By Travis Lundy

AH spreads are slightly narrower, but performance is concentrated in fewer names and broad spread volatility is up. BYD (1211 HK) back down nearly 3%. CATL 10% through still.
Sharp skew on H-vs-A performance this week. Those trading AH Premium <20% saw H underperform sharply. Those in the 40-100% AH Premium range saw H outperform. Quiddity Portfolio alpha strong.
The data tables below update on a daily basis in the Tools section of Smartkarma. The SOUTHBOUND Flow Monitor and AH Monitor are both there free for SK readers.

STAR Chip/ CES Chips/ All Share Semi Index Rebalance: Multiple Index Flows for Some Stocks

There are 4 changes for the STAR Chip Index, 8 changes for the CES China Semiconductor Chips Index and 11 changes for the CSI All-Share Semiconductors & Semiconductor Equipment Index.
There are multiple stocks that will have flows from passive trackers across the three indices. Multiple stocks will have passive flows from other index trackers across the China universe.
Bestechnic Shanghai (688608 CH) will have passive inflows from STAR50 INDEX, CSI 500 Index and CSI A500 Index trackers and outflows from the STAR100 Index and CSI1000 Index trackers.

Quiddity CSI 300/500 Jun25 Results: 114 Changes; 88% Hit Rate; ~US$5bn One-Way

The June 2025 index review results for China’s CSI 300 and CSI 500 indices were announced after market close on Friday 30th May 2025.
There will be 7 ADDs/DELs for CSI 300 and 50 ADDs/DELs for CSI 500.
The CSI 300 and CSI 500 index rebal events could trigger US$1.7bn and US$3.2bn in one-way flows, respectively.

CSI All Share IB & Brokerage Index Rebalance: Northeast Replaces Harbin Hatou

The changes to the CSI All Share Investment Banking & Brokerage Index were announced after market close on 30 May and will be implemented at the close on 13 June.
Northeast Securities (000686 CH) will be added to the index while Harbin Hatou Investment Co, Ltd. (600864 CH) will be deleted.
There is over 2.5x ADV to trade in both stocks and much smaller impact of funding/capping flows on the other index constituents.

CSI All Share Real Estate Sector Index Rebalance: Sector Reclassification Drives Changes

There are 3 adds and 4 deletes for the CSI All Share Real Estate Sector Index in June. There are changes driven by changes to the sector classification for stocks.
Passive trackers will need to buy between 0.2-0.65x ADV in the adds and sell between 0.15-1.75x ADV in the deletes.
The deletes have outperformed the adds over the last few months and some of that could dissipate over the next couple of weeks.

Quiddity CSI All Share Semiconductors Jun25 Results: 11 ADDs/DELs; Couple of Surprises

The June 2025 index review results for the CSI All Share Semiconductors Index were announced after market close on Friday 30th May 2025.
There will be 4 ADDs and 7 DELs for the CSI All Share Semiconductors Index.
We estimate one-way flows of approximately US$84mn in the June 2025 index rebal event.

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May 31

Daily Brief China: Hang Seng Index, Shanghai Zhida Technology Development Co Ltd, Contemporary Amperex Technology (CATL), CSPC Pharmaceutical Group and more

In today’s briefing:

HSI Index Options Weekly (May 26-30): Choppy Tape, One Strike Rules Them All
Shanghai Zhida Technology Development Pre-IPO – Market Leader Faces Pricing Pressures
CATL (3750.HK): Rich Vols, Strong Start, and a Tactical Hedge
CSPC Pharmaceutical (1093 HK): Finished Drugs Drag 1Q25; Out Licensing And New Launches To Be Key

HSI Index Options Weekly (May 26-30): Choppy Tape, One Strike Rules Them All

By John Ley

HSI traded sideways for a third straight week as macro headlines swirled and tariffs turned internally litigious.
Volatility drifted lower, with 1M implied vol dropping below its 1-year median for the first time in months.
Call volumes were significantly higher led by one strike in particular.

Shanghai Zhida Technology Development Pre-IPO – Market Leader Faces Pricing Pressures

Shanghai Zhida Technology Development (SZTD) is looking to raise about US$128m in its upcoming Hong Kong IPO.
SZTD presents a compelling leadership position in the EV home charging market, both in China and globally, underpinned by strong industry tailwinds and a diversified product-service offering.
However, recent declines in revenue and margins driven by pricing pressures and high customer concentration raise concerns about the sustainability of its growth and profitability.

CATL (3750.HK): Rich Vols, Strong Start, and a Tactical Hedge

By John Ley

CATL’s options debut in Hong Kong has been active, with strong Call interest and rising open interest suggesting early investor enthusiasm.
Implied vols are holding firm post-listing and appear rich —potentially justifiable given the trading dynamics and catalysts.
We recommend a tactical hedge structure that skews return favourably, targeting recent highs and protecting against downside drift.

CSPC Pharmaceutical (1093 HK): Finished Drugs Drag 1Q25; Out Licensing And New Launches To Be Key

By Tina Banerjee

CSPC Pharmaceutical Group (1093 HK) 1Q25 revenue dropped 22% YoY as finished drugs witnessed decrease on VBP and NRDL inclusion. Bulk products and license fees compensated to an extent.
Operating margin (23.7%) remained stable despite 11% higher R&D expenses at RMB 1.3B.
License and collaboration in relation to the development, manufacturing, and commercialization of certain products of the company augur well in terms of future revenue visibility.

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May 30

Daily Brief China: SHEIN, Miniso, Xuanzhu Biopharmaceutical and more

In today’s briefing:

Shein IPO: Hong Kong Yes, London No
[Miniso(MNSO US, SELL, TP US$13.5) TP Change]: C1Q25 Review: Low Quality Expansion Bore Bitter Fruit
Xuanzhu Biopharm (轩竹生物科技) Pre-IPO: Reality Checks Against Claims

Shein IPO: Hong Kong Yes, London No

By Douglas Kim

Shein announced it is planning for an IPO in Hong Kong in 2025. Shein tried to go public in London, but its attempt has essentially failed.
Due to tariff war and ending de minimis for shipments from China and Hong Kong by the U.S. government, the valuation of Shein could decline to less than $50 billion.
Now, as long as the valuation is not excessive but reasonable, there could be a decent demand for this IPO of Shein in Hong Kong.

[Miniso(MNSO US, SELL, TP US$13.5) TP Change]: C1Q25 Review: Low Quality Expansion Bore Bitter Fruit

By Eric Wen

MNSO reported 1Q25 rev. in line with cons. but non-GAAP op. profit 17% below and GAAP net income 33% below cons,
We view MNSO’s store expansion as being below its bar of quality. Downside risks were not fully priced in. Our 2025 revenue/net profit forecasts are 7.0%/8.2% below consensus;
We cut the TP from US$16 to US$13.5/ADS and keep the SELL rating.

Xuanzhu Biopharm (轩竹生物科技) Pre-IPO: Reality Checks Against Claims

By Ke Yan, CFA, FRM

Xuanzhu Biopharm, the biotech arm of HK-listed Sihuan Pharma, is seeking to raise at least USD 100m via a Hong Kong listing. The sole sponsor is CICC.
In this insight, we look at the company’s core products and key products, including XBP-3571, XZP-3287 and XZP-3621.
While there are some interesting reads from its clinical data, we are of the view that its near-commercial products are still lacking the differentiating factors in respective competitive therapeutic areas.

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May 29

Daily Brief China: 52TOYS Development, Anker Innovations Technology, Lens Technology , Vigonvita Life Sciences, Xiaomi Corp and more

In today’s briefing:

52 Toys Development Co. Ltd Pre-IPO Tearsheet
STAR&CHINEXT 50 Index Rebalance Preview: One Set of Change; Maybe Two
Lens Technology A/H Listing – Diversifying but Is Tarrified for Now
Pre-IPO Vigonvita Life Sciences – The Challenges Behind the Pipeline and the Outlook
Lucror Analytics – Morning Views Asia

52 Toys Development Co. Ltd Pre-IPO Tearsheet

By Rosita Fernandes

52TOYS Development (TOY HK) is planning to raise about US$200m through its upcoming Hong Kong IPO. The lead bookrunners for the deal are Citi, Huatai International.
52Toys was established in 2015. The firm is one of the leading IP toy company in China.
According to CIC, the company was the second-largest multi-genre Chinese IP toy company in terms of China GMV in 2024.

STAR&CHINEXT 50 Index Rebalance Preview: One Set of Change; Maybe Two

There could be 1 constituent change (maybe 2) for the STAR&CHINEXT 50 Index in June. The announcement of the potential change will be made after market close on Friday.
Anker Innovations Technology could replace Suzhou Maxwell Technologies in the index. If AVIC Chengdu Aircraft is added to the index, Wuxi Lead Intelligent Equipment could be deleted.
Anker Innovations Technology could have opposite flow and Suzhou Maxwell Technologies could have same way flow from passive trackers of other indices on the same day.

Lens Technology A/H Listing – Diversifying but Is Tarrified for Now

Lens Technology (300433 CH), a precision manufacturing solution provider, aims to raise around US$1.5bn in its H-share listing.
Lens Technology (LT) is one of the leading players in precision structural parts and modules integrated solutions for both consumer electronics and smart vehicles interaction systems.
In this note, we look at its past performance and other deal dynamics that might impact the listing.

Pre-IPO Vigonvita Life Sciences – The Challenges Behind the Pipeline and the Outlook