China

In today’s briefing:

Hongkong Land (HKL SP) Recycles Nine Floors Of One Exchange Square
China Mobile (941 HK) Tactical Outlook Following Q1 2025 Results
Deepexi Technology Pre-IPO Tearsheet
Asia Real Estate Tracker (25-Apr-2025): HKEX buys 9 floors at Exchange Square for $810M.

Hongkong Land (HKL SP) Recycles Nine Floors Of One Exchange Square

In a rare move, Jardine Matheson (JM SP)-controlled Hongkong Land (HKL SP) has sold nine floors (147,025 square feet) of One Exchange Square to HKEX (388 HK) for HK$6.3bn (US$810mn).
HKL plans to use the proceeds to provide enhancements to the property sold, the reduction of net debt; and for a share buyback. Shares are up 9% as I type.
HKL is focussed on divesting US$4bn to US$6bn of its balance sheet assets in the next three years. HKL’s CEO Michael Smith: “Recycling capital is our top priority right now“.

China Mobile (941 HK) Tactical Outlook Following Q1 2025 Results

By Nico Rosti

On April 22, 2025, China Mobile (941 HK) reported its Q1 2025 financial results, revenues substantially unchanged, but increase in net income and subscriber growth indicates resilience in its operations.
The initial market reaction suggests mild disappointment, the stock retreated to a low <80 intra-week, then closed the week down at 80.85.
Our price model shows an oversold state, while the time model indicates there is room for another week down, possibly a buy-the-dip opportunity (3 weeks down should be the limit).

Deepexi Technology Pre-IPO Tearsheet

By Akshat Shah

Deepexi Technology (1843779D CH) (DT) is looking to raise atleast US$100m in its upcoming Hong Kong IPO. The deal will be run by CITIC, CMBC, Guotai, Bocom International and SPDB International.
The firm specializes in delivering AI solutions to enterprises to integrate their data, decisions and operations efficiently at scale.
DT ranked first among specialized providers of large model AI application solutions in China’s enterprise large model AI application solution market in terms of revenue in 2024, according to F&S.

Asia Real Estate Tracker (25-Apr-2025): HKEX buys 9 floors at Exchange Square for $810M.

Hong Kong Exchanges and Clearing Limited (HKEX) is purchasing 9 floors at Exchange Square in Hong Kong for $810 million, marking the top deal of the year.
The California Public Employees’ Retirement System (CalPERS) fund has acquired an office tower near Shanghai Xintiandi for $316 million.
Mitsubishi Estate has started construction on a $1.7 billion office project in London, further solidifying its presence in the city’s real estate market.

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Apr 25

Daily Brief China: Dickson Concepts Intl, Pop Mart International Group L, Wanda Hotel Development, CiDi Inc, China Hongqiao, Blackrock Inc and more

In today’s briefing:

Poon Moves On Dickson Concepts (113 HK)’s Cash Hoard?
Pop Mart (9992 HK): Eye-Popping Growth. Is It the Next Pokémon for Kidults?
Dickson Concepts (113 HK): Controlling Shareholder to Privatise a Negative EV Play?
Wanda Hotel (169 HK) To Offload Hotel Management Arm
CiDi Pre-IPO – Promising Company Amid Strong Industry Tailwinds & Narrowing Losses
Lucror Analytics – Morning Views Asia
Asia Real Estate Tracker (24-Apr-2025): Lone Star buys Yokohama block for hotel project.

Poon Moves On Dickson Concepts (113 HK)’s Cash Hoard?

Dickson Concepts Intl (113 HK) (DC), which is principally engaged in the sale of luxury goods business, is suspended pursuant to the Takeovers Code.
DC’s Chairman, Dickson Poon (& spouse), hold 60.5%. Super-net-cash rich DC is trading in sync with historical metrics. 1H25 (Mar Y/E) net profit dropped 40.1%. Shares are roughly flat yoy.
Given DC’s cash hoard, taking the company private makes sense. I doubt Poon is seeking to exit his stake.

Pop Mart (9992 HK): Eye-Popping Growth. Is It the Next Pokémon for Kidults?

By Devi Subhakesan

Pop Mart International Group L (9992 HK) ’s stock has nearly doubled in three months, fueled by surging revenue and the breakout popularity of its Labubu dolls.
Driven by strong international expansion and solid omni-channel demand in its home market, Pop Mart reported over 165% revenue growth in 1Q2025 compared to the same period last year.
Investors remain split on whether Pop Mart’s unconventional products and marketing are driven by lasting fandom or just a passing trend.

Dickson Concepts (113 HK): Controlling Shareholder to Privatise a Negative EV Play?

Dickson Concepts Intl (113 HK) has entered a trading halt “pending the release of an announcement pursuant to The Code on Takeovers and Mergers, which constitutes inside information of the Company.”
The controlling shareholder (Sir Poon) is likely seeking to launch a privatisation through a Bermuda scheme, particularly as the shares trade below net cash.
While no disinterested shareholder holds a blocking stake, the headcount test and a decent AGM participation rate necessitate an attractive offer. The potential offer price range is HK$5.60-9.24.

Wanda Hotel (169 HK) To Offload Hotel Management Arm

Wanda Hotel Development (169 HK), 65.05% held by Wang Jianlin, is selling its hotel property arm to Tencent (700 HK) and Trip.com (9961 HK)-backed Tongcheng Travel Holdings (780 HK).
Wang Jianlin’s cash-strapped Dalian Wanda Group has been offloading assets such as the $8.3bn sale of its mall management business to a PAG-led consortium in March last year.
Wanda Hotel proposes distributing all or part of the proceeds from the sale. Given Wang’s controlling shareholding, I’d tilt towards the former.

CiDi Pre-IPO – Promising Company Amid Strong Industry Tailwinds & Narrowing Losses

By Troy Wong

CiDi Inc. 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.
The company stands to benefit from sustained industry tailwinds. While still in its early stages, CiDi has made progress in narrowing its losses.

Lucror Analytics – Morning Views Asia

By Trung Nguyen

In today’s Morning Views publication we comment on developments of the following high yield issuers: China Hongqiao, Softbank Group, Vedanta Resources, China Oil & Gas, Biocon Biologics
In the US, new home sales jumped 7.4% m-o-m (1.3% e / 3.1% revised p) to an annualised 724 k units in March, driven by a surge in home sales in the South. The March (final) building permits rose 0.5% to an annualised 1.47 mn units.
Separately, the S&P manufacturing PMI edged up to 50.7 (49.0 e / 50.2 p), while the services PMI fell to 51.4 (52.6 e / 54.4 p). The composite PMI declined to 51.2 (52.0 e / 53.5 p).

Asia Real Estate Tracker (24-Apr-2025): Lone Star buys Yokohama block for hotel project.

Lone Star acquires Yokohama apartment block from Mapletree for hotel project, expanding their investment portfolio in the real estate sector.
Former executives from BlackRock and CapitaLand, including Simon Treacy, are taking on leadership roles in the energy startup PolarBlue.
It is important to stay positive and keep moving forward in the face of challenges, as success is attainable with perseverance and determination.

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Apr 24

Daily Brief China: Bright Smart Securities And, BYD, Xiaomi Corp, Bama Tea, China Petroleum & Chemical, ICBC (H), Liuliu Orchard Group, Perfect Medical Health and more

In today’s briefing:

Bright Smart Securities (1428 HK): A Takeunder MGO?
BYD (1211 HK) Positioning Ahead of Q1 2025 Results
Xiaomi Corp (1810 HK): Top Trades and Strategic Insights from HKEX Options Trading
Xiaomi Corp (1810 HK): Volatility Insights and Analysis Identify Spread Opportunities
Pre-IPO Bama Tea – The Business Model, the Challenges and the Outlook
Sinopec (386) Earnings: Volatility Setup and Post-Release Price Behavior
Bright Smart (1428 HK): Chairman’s Scheme, Or Cashing Out?
ICBC (1398.HK) Earnings: Volatility Pricing, Post-Release Trade Setup & Tactical Hedge
Liuliu Orchard Group Co Ltd Pre-IPO Tearsheet
Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – April 2025

Bright Smart Securities (1428 HK): A Takeunder MGO?

Bright Smart Securities And (1428 HK) is in a trading halt “pursuant to the Hong Kong Code on Takeovers and Mergers, which constitutes inside information of the Company.”
It is likely that Mr Lum, the founder and chairman, has entered a sale and purchase agreement to sell his controlling stake, which would trigger a mandatory general offer (MGO).
The shares are at an all-time high and have a P/B multiple that is a material premium to peers. The MGO price is likely to be lower than last close.

BYD (1211 HK) Positioning Ahead of Q1 2025 Results

By Nico Rosti

BYD (1211 HK) will release its Q1 2025 results on April 25. The company has issued a positive profit alert, projecting net income around RMB 8.5 – 10 billion.
Expected earnings per share ranging from RMB 2.91 to RMB 3.42, up from RMB 1.57 in the same period last year.
Our model currently does not indicate the stock is overbought, but a surprise pullback is always possible around earnings releases, so we will discuss also support/buy zones.

Xiaomi Corp (1810 HK): Top Trades and Strategic Insights from HKEX Options Trading

By Gaudenz Schneider

Over the past five trading days, Xiaomi Corp (1810 HK) multi-leg option strategies showcased a variety of approaches. Strategy highlights are provided.
Bearish and Bullish strategies balance each other, with only 12% of trades expressing a neutral view, such as Iron Condors. Some strategies were traded in unusually large size.
Diagonal Spreads account for over 25% of all strategies and can make for near self-financing strategies. An inverted volatility term structure, aka backwardation, supports calendar and diagonal spreads.

Xiaomi Corp (1810 HK): Volatility Insights and Analysis Identify Spread Opportunities

By Gaudenz Schneider

Xiaomi’s (1810 HK) one-month implied volatility has decreased from recent peaks but remains above the 90th percentile, while realized volatility is exceptionally high, exceeding 100% (100th percentile).
The options market exhibits an inverted term structure (backwardation) favoring calendar or diagonal spreads, with a slightly negatively sloped skew supporting put and call spreads.
Open interest extends to March 2026, with balanced call and put interest across most expiries, except for March 2026, which is heavily call-dominated.

Pre-IPO Bama Tea – The Business Model, the Challenges and the Outlook

The most significant issue in the domestic tea industry is product standardization. This makes it difficult for tea companies to expand their market share and achieve economies of scale.
Bama’s revenue growth showed an upward trend, but the growth rate is declining. There’re already signs of growth stagnation. High selling and marketing expenses will put pressure on profit margin.
Lancang and Tenfu Caymans (6868 HK) are comparable peers. Due to larger market share/revenue scale and higher profit margin in 24Q1-Q3, we think Bama’s valuation should be higher than peers.

Sinopec (386) Earnings: Volatility Setup and Post-Release Price Behavior

With Sinopec down 8.47% since the last quarter, we take an in-depth look at price patterns, implied vol, and the earnings implied jump compared to historical outcomes.
Implied vols stand out across a variety of metrics including relative valuation.
Examining average absolute price moves across quarters, Q1 tends to have the second-largest average absolute move.

Bright Smart (1428 HK): Chairman’s Scheme, Or Cashing Out?

Mid-Trading yesterday, broker Bright Smart Securities And (1428 HK) was suspended pursuant to the Takeovers Code. Shares closed up 9.3% before suspension.
Bright Smart’s ops are tonking along nicely. It recently announced a (preliminary) 10% increase in FY25 profit (Mar Y/E). The share price is up 97% yoy.
Bright Smart’s Chairman, Yip Peter Mow Lun, holds 50.54%. Unusual timing to take the company private. Alternatively Yip, at 73-years of age, may be cashing in his chips.

ICBC (1398.HK) Earnings: Volatility Pricing, Post-Release Trade Setup & Tactical Hedge

An in-depth look at price patterns, implied vol, and the earnings implied jump compared to historical outcomes.
Based on ICBC’s historical post-earnings behavior and current implied vol levels, we recommend a hedge into the event.
We explore post-earnings moves that show a potentially exploitable pattern.

Liuliu Orchard Group Co Ltd Pre-IPO Tearsheet

By Rosita Fernandes

Liuliu Orchard Group (LLO HK) (LOGCL) is planning to raise about US$100m in its upcoming Hong Kong IPO. The lead bookrunners for the deal are Citic and Guoyuan.
The company was established in 1999. It is one of the leading producers of plum-based products in China’s fruit snacks category.
As per F&S Report, LOGCL ranked first in China’s fruit snacks industry by retail sales value, with a market share of 4.9% in 2024.

Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety – April 2025

By Sameer Taneja

We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety.
Our top picks are Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), Taste Gourmet (8371 HK), Philippine Stock Exchange (PSE PM), and Ginebra San Miguel (GSMI PM)
We provide updates on Ginebra San Miguel (GSMI PM), The Keepers Holdings (KEEPR PM), Philippine Stock Exchange (PSE PM), Shakey’s Pizza (PIZZA PM), and Uchi Technologies (UCHI MK).

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Apr 23

Daily Brief China: Jilin Jiutai Rural Comm Bank, Vcanbio Cell & Gene Engineering, Sichuan Baicha Baidao Industrial, Hang Seng Index, NetEase , LXJ International Holdings, Keppel Corp, Sunac China Holdings, Hi-Think Technology International Ltd and more

In today’s briefing:

Jilin Jiutai Bank (6122 HK): Now Is The Time To Be Delisted
CSI Medical Service Index Rebalance Preview: Five Potential Changes in June
Sichuan Baicha Baidao Industrial IPO Lockup – Steep Losses for Pre-IPO Investors
HSI Tactical Outlook: Fading Momentum Signals Pullback Risk
Tencent/Netease: One Game for Netease in April
Pre-IPO LXJ International Holdings – The Pain Points and the Outlook
Asia Real Estate Tracker (22-Apr-2025): Wanda sells hotel business for $347M.
Lucror Analytics – Morning Views Asia
Hi-Think Technology Pre-IPO – Steady Outlook Amid FX Pressures

Jilin Jiutai Bank (6122 HK): Now Is The Time To Be Delisted

Jilin Jiutai Rural Comm Bank (6122 HK), a small bank focusing on rural and small business lending, is suspended pursuant to the Takeovers Code.
Jilin Jiutai was initially suspended on the 12th March. Then on the 31st March, it indefinitely postponed its FY24 results. The share price is down 61% in the past year.
My guess is that Jilin Province Trust will put Jilin Jiutai out its misery via an Offer by way of a Merger by Absorption. Pricing? Perhaps HK$0.80/share.

CSI Medical Service Index Rebalance Preview: Five Potential Changes in June

By Brian Freitas

The review period ends on 30 April, the changes should be announced on 30 May and will be effective after the close of trading on 13 June.
We forecast 5 potential changes for the index in June where there could be buying of 0.5-2x ADV in the adds and selling of between 0.7-3.8x ADV in the deletes.
The forecast adds and deletes have performed in line over the last few months and there could be outperformance as we near the end of the review period and announcement.

Sichuan Baicha Baidao Industrial IPO Lockup – Steep Losses for Pre-IPO Investors

By Sumeet Singh

Sichuan Baicha Baidao Industrial (2555 HK) raised around US$330m in its Hong Kong IPO, in April 2024. The lockup on its pre-IPO investors is set to expire soon
SBBI sells new-style tea drinks through its ChaPanda stores. According to F&S, SBBI ranked third in China’s new-style tea shop market in 2023, with a market share of 6.8%
In this note, we will talk about the lockup dynamics and possible placement.

HSI Tactical Outlook: Fading Momentum Signals Pullback Risk

By Nico Rosti

In our previous insight we highlighted a buy-the-dip opportunity in the HSI INDEX in the HSI Index during the late-March pullback. However, Trump’s tariff announcement dramatically shifted the outlook.
Following a sharp drop to 19260, the Hang Seng Index staged a fierce rally to 21000—but momentum has since stalled.
The index has rallied for three straight weeks (including this one), but remains below key resistance levels. Our model signals weakness, and a likely pullback ahead.

Tencent/Netease: One Game for Netease in April

By Ke Yan, CFA, FRM

China announced game approval for the April batch. The number of games approved remained at a higher level than 2023.
The pace of China game approval appears to have accelerated to the same level as pre-tightening.
While Netease received one game approval for its domestic game, Tencent received an approval for an imported game.

Pre-IPO LXJ International Holdings – The Pain Points and the Outlook

LXJ’s revenue/net profit showed an upward trend from 2022 to 24Q1-Q3, but growth momentum was decreasing. The same store sales growth dropped significantly. Profit margin is also lower than peers.
There’re significant differences in dietary habits and tastes across China, making it difficult for LXJ to expand nationwide. So, the future growth potential may not be as good as expected.
In December 2021, valuation of LXJ had reached RMB18 billion. Since LXJ’s revenue growth/profit margin are inferior to Xiaocaiyuan, we think the valuation of LXJ should be lower than Xiaocaiyuan.

Asia Real Estate Tracker (22-Apr-2025): Wanda sells hotel business for $347M.

Wanda sells hotel business to Tencent-backed firm for $347M, indicating a strategic shift in their business operations.
Keppel raises $1.5B for data centre, education funds, and urban renewal, showing a focus on diverse investments.
Cushman & Wakefield appoints Matthew Bouw as APAC CEO for EMEA, highlighting leadership changes in the real estate industry.

Lucror Analytics – Morning Views Asia

In today’s Morning Views publication we comment on developments of the following high yield issuers: Sunac China
US President Donald Trump has ramped up pressure on Fed Chairman Jerome Powell. In a Truth Social post yesterday, Mr Trump called for “pre-emptive cuts” in interest rates, stating that “there can almost be no inflation, but there can be a slowing of the economy unless Mr Too Late, a major loser, lowers interest rates now”.
The latest salvo came after White House economic advisor Kevin Hassett said on Friday that the Trump administration was studying whether it could fire Mr Powell. Mr Trump also told reporters on Friday that Mr Powell would resign if the President asked him to.

Hi-Think Technology Pre-IPO – Steady Outlook Amid FX Pressures

By Troy Wong

Hi-Think Technology International (HT) is looking to raise at least US$150m in its upcoming Hong Kong IPO.
HT is a leading Chinese provider of digital intelligence software technology services and solutions, focusing on serving integration customers in Japan, particularly customers in the civil and financial sectors.
Due to significant depreciation of the JPY against the RMB, HT’s 9M24 sales growth and margins were negatively impacted.

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Apr 22

Daily Brief China: BYD, NetEase , Dada Nexus , Baidu , ENN Energy, MGM China Holdings, Shandong Fengxiang, Hang Seng Index, Chiyoda Corp and more

In today’s briefing:

BYD (1211 HK): Some Threats Before 1Q25 Result
Quiddity Leaderboard HSTECH Jun25: US$1.5bn One-Way; Large Inflow for Net Ease
Quiddity Leaderboard HSCEI Jun25: US$470mn One-Way Flows Expected
Dada Nexus (DADA US): Takeaways from the 13E-3 Filing
Quiddity Leaderboard HSIII Jun25: US$317mn One-Way in June; Three Changes Likely in September
ENN Energy (2688 HK): Privatisation Progressing Well Ahead
Lucror Analytics – Morning Views Asia
Shandong Fengxiang (9977.HK) Privatization – Long-Term Investors May Be Unhappy with the Offer Price
Hong Kong Single Stock Options Weekly (April 14 – 17): Broader Participation, Softer Vols
Asia Real Estate Tracker (21-Apr-2025): Mapletree sells Scotland student housing.

BYD (1211 HK): Some Threats Before 1Q25 Result

By Ming Lu

The growth rate of sales volume slowed down in March 2025.
Geely’s sales volume reached 46% of BYD’s in 1Q25, compared to 23% in 2024.
We set a downside of 18% and a price target of HK$300 for the next twelve months.

Quiddity Leaderboard HSTECH Jun25: US$1.5bn One-Way; Large Inflow for Net Ease

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 flow expectations for the June 2025 index rebal event.
We expect no index changes for June 2025 but we estimate there to be US$1.53bn in one-way flows which translates to a turnover of 7.4%.

Quiddity Leaderboard HSCEI Jun25: US$470mn One-Way Flows Expected

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 flow expectations for the June 2025 index rebal event.
We expect no index changes for June 2025 but we estimate there to be US$470mn in one-way flows which translates to a turnover of 4.3%.

Dada Nexus (DADA US): Takeaways from the 13E-3 Filing

Dada Nexus (DADA US) has filed the 13E-3 relating to the binding proposal from JD.com Inc (ADR) (JD US) at US$2.00 per ADS, a 41.8% premium to the undisturbed price.
The 13E-3 filing provides more details on the price negotiations, required regulatory approvals and IFA valuation. Crucially, no Chinese regulatory approvals are required.
The completion conditions are low-risk. At last close and for an end-September payment, the gross/annualised spread is 5.4%/12.1% (including the US$0.05 ADS cancellation fee).

Quiddity Leaderboard HSIII Jun25: US$317mn One-Way in June; Three Changes Likely in September

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

ENN Energy (2688 HK): Privatisation Progressing Well Ahead

By Osbert Tang, CFA

ENN Energy (2688 HK) is not required to submit a merger control filing to the SAMR, suggesting it is making a step ahead in meeting the pre-conditions.
The use of onshore bank loans and cash balance as a refinancing source and consideration payment will lower financing costs, boosting the value of ENN Natural Gas H-share.
The current share price is 9.3 and 17.7% below the low-bound and high-bound of our estimated value range. It is also less vulnerable to the current tariff war.

Lucror Analytics – Morning Views Asia

In today’s Morning Views publication we comment on developments of the following high yield issuers: MGM China, Adani Ports
In the US last Thursday, March housing starts came in below estimates at negative 11.4% m-o-m (-5.4% e / 9.8% revised p) to an annualised 1.32 mn units (1.42 mn e / 1.49 mn revised p), amid high inventory levels and uncertainty over building-material costs.
That said, building permits rose 1.6% m-o-m (-0.6% e / -1.0% p) to an annualised 1.48 mn units (1.45 mn e / 1.46 mn p).

Shandong Fengxiang (9977.HK) Privatization – Long-Term Investors May Be Unhappy with the Offer Price

Based on our forecast, growth may be under pressure in 2025, but would recover in 2026/2027.The Cancellation Price is attractive for investors who want to cash out in short term.
Some long-term investors may hope to see an improvement in Fengxiang’s fundementals and long-term performance after PAG/Abu Dhabi Investment step in. Their attitude may bring uncertainties to the privatization.
The business logic of PAG is not a simple financial investment, but a higher pursuit. Fengxiang is a high-quality asset for PAG.Share Alternative Offer could help increase the success rate

Hong Kong Single Stock Options Weekly (April 14 – 17): Broader Participation, Softer Vols

A noticeable shift in tone this week, with participation broadening and price action turning constructive.
Implied vols declined across most names, unwinding last week’s spike but still sitting above historical medians.
Call activity bounced back, and the Put/Call ratio suggestive of less defensiveactivity.

Asia Real Estate Tracker (21-Apr-2025): Mapletree sells Scotland student housing.

Mapletree, a real estate firm, has sold Scottish student housing to a Dutch fund manager, expanding its international portfolio.
Shanghai office rents have decreased for the 12th consecutive quarter, reflecting a downward trend in the local real estate market.
Central Tokyo office rents have increased due to rising construction costs, impacting rates for new supply and attracting investor interest.

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Apr 21

Daily Brief China: Suzhou Kematek, ENN Energy, Guolian Securities Co Ltd H, Alibaba Group Holding , Hang Seng Index, Iron Ore, Lalatech Holdings Co Ltd, Hang Seng China Enterprises Index and more

In today’s briefing:

CSI All Share Semiconductor Index Rebalance Preview: Multiple Index Flows for Some Stocks
Merger Arb Mondays (21 Apr) – ENN Energy, Canvest, OneConnect, Makino, Shibaura, Welcia, Topcon
A/H Premium Tracker (To 18 Apr 2025): AH Premia Fall in Low Volume
HK Connect SOUTHBOUND Flows (To 18 Apr 2025); Buying of Internet, SOEs, and ETFs Previously Sold
HSI Index Options Weekly (Apr 14-17): Volatility Cools, But the Floor May Hold
[IO Technicals Weekly 2025/14]: Price Bearishness to Persist
Lalatech IPO | Review of FY24 Financials & OpStats | Mostly Solid Numbers | Plus a Few Questions
HSCEI Index Options Weekly (Apr 14-17): Key Strike Rejected, Volatility Recalibrates

CSI All Share Semiconductor Index Rebalance Preview: Multiple Index Flows for Some Stocks

By Brian Freitas

The review period for the June rebalance of the CSI All Share Semiconductor Index ends 30 April. The changes should be announced on 30 May and implemented on 13 June.
We forecast 4/5 adds and 8 deletes for the index with a one-way turnover of 2.4% and a round-trip trade of CNY 990m (US$136m).
There are many forecast adds and deletes that will have same side flows from trackers of the CES China Semiconductor Chips Index and the CNI Semiconductor Chips Index.

Merger Arb Mondays (21 Apr) – ENN Energy, Canvest, OneConnect, Makino, Shibaura, Welcia, Topcon

We 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: Insignia Financial (IFL AU), Oneconnect Financial Technology (6638 HK), ENN Energy (2688 HK), Seven & I Holdings (3382 JP), Smart Share Global (EM US), Domain Holdings.
Lowest spreads: Makino Milling Machine Co (6135 JP), Sinarmas Land (SML SP), Shibaura Electronics (6957 JP), Tenma Corp (7958 JP), Aeon Delight (9787 JP), Naigai Trans Line (9384 JP).

A/H Premium Tracker (To 18 Apr 2025): AH Premia Fall in Low Volume

By Travis Lundy

AH Premia fall small. Spread curve torsion is mild but present, with narrow AH Premia widening, and wide premia narrowing.
For a month I thought warning signs were flashing and spreads could widen. I think the trend is still to widening but torsion.
The Quiddity Portfolio is pretty hunkered down and nearly flat H/A risk. But benefits from wider spreads coming in, narrow spreads widening, and liquidity dropping.

HK Connect SOUTHBOUND Flows (To 18 Apr 2025); Buying of Internet, SOEs, and ETFs Previously Sold

By Travis Lundy

Q1 saw record quarterly inflows by SOUTHBOUND investors at HK$435bn, beating the previous record of Q1 2021 by more than HK$100bn. The first three weeks in April were HK$168bn.
Gross and net flows this week subsided quite substantially compared to previous weeks.
We are in a post-tariff breather as the US says the ball is in China’s court and China looks like it will wait things out. Port volumes are telling.

HSI Index Options Weekly (Apr 14-17): Volatility Cools, But the Floor May Hold

A weekly recap of volatility and price metrics, including option volumes, volatility trends, the spot/implied relationship, and open interest statistics.
The recent cooling in volatility may be more of a pause than a reversal—we explore why that might be.
Trading activity continued to fade as the market works through the volatility of recent weeks.

[IO Technicals Weekly 2025/14]: Price Bearishness to Persist

By Srinidhi Raghavendra

Managed Money switched to net short, Physicals switched to net long while FIs increased net long positions last week.
Prices touched a high of $99.25/ton on 17/Apr and a low of $96.55/ton on 14/Apr. It traded in a range of $2.70/ton during the week.
Based on seasonality, SGX IO Futures May contract trades 23.8% below its last 5-year average ($128.37/ton).

Lalatech IPO | Review of FY24 Financials & OpStats | Mostly Solid Numbers | Plus a Few Questions

By Daniel Hellberg

FY24 revenue growth of 19% solid, but mostly driven by one operating segment
Gross margin in FY24 fell on mix, but platform monetization down, too
Sharp growth in FY24 working capital requires investors’ close attention

HSCEI Index Options Weekly (Apr 14-17): Key Strike Rejected, Volatility Recalibrates

A weekly recap of volatility and price metrics, including option volumes, volatility trends, the spot/implied relationship, and open interest statistics.
Volatility pulled back but may have simply entered a holding pattern—parallels to stimulus induced rise and fall are explored.
Volumes dropped sharply from last week’s Call induced surge, as the market approached—but failed to clear—a key strike.

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Apr 20

Daily Brief China: Giant Biogene, Shanghai Haohai Biological Tec and more

In today’s briefing:

China Healthcare Weekly (Apr.20)- Giant Biogene Announced a HK$2.3bn Placement, China’s VBP Outlook
Quiddity Leaderboard CSI Medical Jun25: Three ADDs/DELs Likely; US$146mn One-Way; 1x-5x ADV

China Healthcare Weekly (Apr.20)- Giant Biogene Announced a HK$2.3bn Placement, China’s VBP Outlook

With policy optimization and market adjustment, the VBP will pay more attention to the balance between quality, supply, and price. So, we think malignant price competition would be avoided.
By 2025, the VBP of biosimilar drugs will gradually cover the major categories such as monoclonal antibody, growth hormone and blood products, with an average price reduction of 30%-50%
Giant Biogene announced a HK$2.294 billion placement with Placing Price of HK$66.65/Share. Investment logic/fundamentals will change after Class III medical device is approved.Based on 2025-2027 forecast, growth will remain strong.

Quiddity Leaderboard CSI Medical Jun25: Three ADDs/DELs Likely; US$146mn One-Way; 1x-5x ADV

The CSI Medical Index represents the top 50 largest and most-liquid stocks involved in medical devices, medical care, medical informatization, and other medical themes in China.
In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
We expect up to three ADDs and three DELs in June 2025 based on the latest available data.

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Apr 19

Daily Brief China: Frasers Group and more

In today’s briefing:

Asia Real Estate Tracker (18-Apr-2025): Morgan Stanley buys 50% of Frasers Aussie Shed Portfolio.

Asia Real Estate Tracker (18-Apr-2025): Morgan Stanley buys 50% of Frasers Aussie Shed Portfolio.

Morgan Stanley purchases 50% stake in $380M Frasers Australian warehouse portfolio, expanding its real estate holdings.
CapitaLand seeks $380M China Mall REIT listing in Shanghai, showing confidence in China’s retail market.
China experiences moderate home price growth in March, with some cities showing signs of recovery after recent slowdowns.

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Apr 18

Daily Brief China: Bestechnic Shanghai , Sonoscape Medical Corp, Canvest Environmental Protection Group, IFBH, SHEIN, JD.com Inc (ADR), West China Cement and more

In today’s briefing:

Quiddity Leaderboard STAR 50/100 Jun25: Rare Sector-Neutral ADDs Vs DELs Trade with Positive Momentum
Quiddity Leaderboard ChiNext & ChiNext 50 Jun25: Some New Expectations; Try Sector-Neutral Pairs
Canvest (1381 HK): Scheme Vote on 12 May
IFBH Pte. Ltd Pre-IPO Tearsheet
Shein: London Approves IPO but Tariffs and End Of “De Minimis” Exemption to Lower Valuation
[JD.com, Inc (JD US, BUY, TP US$60) TP Change]: C1Q25 Preview: An Anchor of Stability Within Turmoil
Lucror Analytics – Morning Views Asia

Quiddity Leaderboard STAR 50/100 Jun25: Rare Sector-Neutral ADDs Vs DELs Trade with Positive Momentum

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

Quiddity Leaderboard ChiNext & ChiNext 50 Jun25: Some New Expectations; Try Sector-Neutral Pairs

The ChiNext index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
We see 10 changes for the ChiNext index and 5 changes for the ChiNext 50 index in the next index rebal event.

Canvest (1381 HK): Scheme Vote on 12 May

Canvest Environmental Protection Group (1381 HK)’s IFA opines that Grandblue Environment Co A (600323 CH)’s HK$4.90 offer is fair and reasonable. The vote is on 12 May.
Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders’ rejection). Shareholders with blocking stakes will be supportive.
This is a done deal. At the last close and for a 10 June payment, the gross/annualised spread is 2.3%/18.3%.

IFBH Pte. Ltd Pre-IPO Tearsheet

By Rosita Fernandes

IFBH (IFBH HK) is planning to raise about US$100m through its upcoming Hong Kong IPO. The lead bookrunner for the deal is Citic.
IFBH specializes in ready-to-consume beverages and food, focusing on coconut water and plant-based products. Its flagship brand, if, introduced natural coconut water to mainland China, becoming the largest market.
As per CIC, IFBH has led mainland China’s coconut water market for five years, holding a 34% share in 2024, while dominating Hong Kong with a 60% share since 2016.

Shein: London Approves IPO but Tariffs and End Of “De Minimis” Exemption to Lower Valuation

By Douglas Kim

In the past week, Reuters reported that Shein has received approval from the UK’s Financial Conduct Authority (FCA) for its IPO in London.
In February 2025, Reuters reported Shein could cut its valuation in a potential listing to around $50 billion, which would be 24% lower than the previous private market funding round.
Tariff war and ending de minimis for shipments from China to US are likely to result in further reduction in the valuation of Shein, much lower than $50 billion.

[JD.com, Inc (JD US, BUY, TP US$60) TP Change]: C1Q25 Preview: An Anchor of Stability Within Turmoil

By Ying Pan

We expect JD to report C1Q25 revenue/adjusted net income growth of 13%/21% YoY, both in-line with consensus, boosted by gov’t subsidies.
We see further catalysts from C2Q25 onward, driven by absorption of export-turned orders, helped by additional policy stimulus, which we believe will mainly augment on margins.
We keep JD as the TOP BUY and raise TP from US$52to US$ 60.

Lucror Analytics – Morning Views Asia

In today’s Morning Views publication we comment on developments of the following high yield issuers: West China Cement, China Hongqiao, Indika Energy
In the US, advance retail sales rose 1.4% m-o-m (1.4% e / 0.2% p) in March, the highest increase in over two years, driven by consumer front-loading of car purchases and electronics ahead of tariff implementation.
Retail sales excluding autos edged down to 0.5% (0.4% e / 0.7% revised p), while the retail sales control group (excluding autos, gas, food services and building materials) slowed to 0.4% (0.6% e / 1.3% revised p). Separately, industrial production slid 0.3% (-0.2% e / 0.8% revised p) in March, with capacity utilisation falling to 77.8% (77.9% e / 78.2% p)

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Apr 17

Daily Brief China: Air China Ltd (A), Giant Biogene, Swire Pacific (A), Anta Sports Products, Goodman Group, China Resources Beverage, Canvest Environmental Protection Group, China East Education , Seazen Holdings , Manycore Tech and more

In today’s briefing:

Quiddity Leaderboard CSI 300/500 Jun25: End of Reference Period Soon; ~US$6bn Total One-Way
Giant Biogene Placement – Great Track Record but Previous Deal Didn’t Do Well
StubWorld: Swire Is “Rich” To Cathay; And Cathay “Cheap” To Air China
Anta (2020 HK): Acquired Jack Wolfskin, Still Financial Momentum, Upgrade to Buy
Asia Real Estate Tracker (16-Apr-2025): Singapore’s LHN Group wants SGX listing for Coliwoo Co-Living.
CR Beverage (2460 HK): Keep Calm Heading into the Lock-Up Expiry
Canvest (1381 HK): 12th May Vote On Grandblue’s Offer
China East Education (667 HK): In an Excellent Position
Lucror Analytics – Morning Views Asia
Manycore Pre-IPO: Losses Narrowed but Future Growth May Be Lower

Quiddity Leaderboard CSI 300/500 Jun25: End of Reference Period Soon; ~US$6bn Total One-Way

CSI 300 represents the 300 largest stocks by market cap and liquidity from the Shanghai and Shenzhen Exchanges. CSI 500 is the next 500 names.
In this insight, we take a look at the potential ADDs and DELs leading the race for the semiannual index rebal event in June 2025.
Currently, we see 6 ADDs/DELs for the CSI 300 index and 50 ADDs/DELs for the CSI 500 index.

Giant Biogene Placement – Great Track Record but Previous Deal Didn’t Do Well

By Sumeet Singh

Giant Biogene (2367 HK) aims to raise up to US$250m via a top-up placement.
We have followed the company since listing and its recent performance has been great. Although it doesn’t seem to need the cash and the previous deal didn’t go well.
In this note, we will run the deal through our ECM framework and talk about the recent updates.

StubWorld: Swire Is “Rich” To Cathay; And Cathay “Cheap” To Air China

Swire Pacific (A) (19 HK) is coming up “rich” on my monitor vs. Cathay Pacific Airways (293 HK); and Cathay “cheap” to Air China Ltd (H) (753 HK).
Preceding my comments on Swire and Cathay are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

Anta (2020 HK): Acquired Jack Wolfskin, Still Financial Momentum, Upgrade to Buy

By Ming Lu

The acquisition of Jack Wolfskin means the brand portfolio strategy still works.
The financial potential is NOT as weak as the 2024 result looks.
We conclude an upside of 40% and a price target of HK$122 for the next twelve months.

Asia Real Estate Tracker (16-Apr-2025): Singapore’s LHN Group wants SGX listing for Coliwoo Co-Living.

LHN Group intends to list Coliwoo Co-Living on SGX, expanding their presence in the real estate market.
C&W reports a significant 42% drop in office rents in Hong Kong, reflecting the changing landscape post-Q1 2019.
PGIM Real Estate promotes David Fassbender to Deputy Head of APAC, indicating a shift in leadership within the company.

CR Beverage (2460 HK): Keep Calm Heading into the Lock-Up Expiry

China Resources Beverage (2460 HK) trades 4.0% below its IPO of HK$14.50 per share. The first six-month lock-up period expires on 22 April.
At the end of the first lock-up expiry, shares representing 727.1m (30.32% of outstanding) will be eligible for sale. However, there is a low risk of substantial sales.
The fundamentals remain good, with margin improvement, beverage’s fast-paced growth, narrowing of the margin gap with Nongfu and undemanding valuation.

Canvest (1381 HK): 12th May Vote On Grandblue’s Offer

On the 22 July 2024, waste-to-energy play Canvest Environmental (1381 HK)announced a pre-conditional Offer from Grandblue Environment (600323 CH) at $4.90/share (best & final), by way of a Scheme.
On the 17th March 2025, all pre-conditions were (finally) satisfied.
The Scheme Doc is now out, with a Court Meeting on the 12th May, with payment on or before the 10th June. The IFA (Somerley) says “fair & reasonable“.

China East Education (667 HK): In an Excellent Position

By Osbert Tang, CFA

China East Education (667 HK) remains well-positioned in the government’s support of vocational education, despite its YTD outperformance.
Higher average tuition per student, better cost control, accelerating growth in the “Fashion and Beauty” segment, and new course introduction are the main profit drivers.
Net cash equals 17.2% of the share price, while other peers are struggling with debt repayment. Coupled with stronger earnings CAGR, its premium PERs are justified.

Lucror Analytics – Morning Views Asia