In today’s briefing:
- Bright Smart Securities (1428 HK): Ant’s Possible Unconditional MGO at HK$3.28
- HK Connect SOUTHBOUND Flows (To 25 Apr 2025); First Net Sell in Ages, Led by Heavy SOE Selling
- Monthly Chinese Tourism Tracker | March and Q125 Demand Growth Weak Vs Trend (April 2025)
- A/H Premium Tracker (To 25 Apr 2025): AH Premia Fall Sharply; “Feels” Risk-On But Noisy Spreads
- BYD (1211 HK): Rev up by 36% in 1Q25, Scale to Bring 60% Upside
- China Healthcare Weekly (Apr.27)- Flaws Behind BeiGene’s Breakeven, Fosun Increased Stake in Henlius
Bright Smart Securities (1428 HK): Ant’s Possible Unconditional MGO at HK$3.28
- Bright Smart Securities And (1428 HK)‘s Chairman entered a SPA with Ant Holdco to sell his 50.55% stake at HK$3.28, a 7.5% premium to the last close.
- The SPA completion requires approval from both the NDRC and SFC. Unusually, Ant has the option of extending the long-stop date, reflecting a possibility of extra scrutiny by the regulators.
- Under Rule 26.1 of the Code, upon completion, Ant will be required to make an unconditional mandatory cash offer at HK$3.28. The MGO price is final and a knockout offer.
HK Connect SOUTHBOUND Flows (To 25 Apr 2025); First Net Sell in Ages, Led by Heavy SOE Selling
- 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.
- The fourth week (this past week) saw net outflows on low volume as SOUTHBOUND investors sold SOEs quite heavily.
- 9 of the top 10 Net Sells as % of Volume this past week had China, Beijing, or Shanghai as the first word in their name.
Monthly Chinese Tourism Tracker | March and Q125 Demand Growth Weak Vs Trend (April 2025)
- March demand growth improved vs weak February, but Q125 showed clear slowdown vs trend
- Relatively strong demand growth for outbound travel is no longer lifting airline load factors
- Near-Term, we no longer view Chinese travel as attractive, as stocks appear to lack catalysts
A/H Premium Tracker (To 25 Apr 2025): AH Premia Fall Sharply; “Feels” Risk-On But Noisy Spreads
- AH Premia fall sharply. 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. That has taken a pause. I am not comfortable it will remain paused or Hs will outperform.
- 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. Alpha good again this week.
BYD (1211 HK): Rev up by 36% in 1Q25, Scale to Bring 60% Upside
- In 1Q25, BYD’s revenue increased by 36% YoY and sales volume increased by 60% YoY.
- We believe BYD’s scale advantage will help cashflow and the competition in the coming market concentration.
- The P/E band suggests an upside of 59% for the end of 2025.
China Healthcare Weekly (Apr.27)- Flaws Behind BeiGene’s Breakeven, Fosun Increased Stake in Henlius
- The rise of innovative drugs in China is actually in line with the interests of large pharmaceutical companies and MNCs. The only ones get “hurt” are small overseas startups/small biotech.
- BeiGene’s turnaround from losses to profits has entered the countdown.However, investors may not be happy with the net profit margin brought by single revenue driver Brukinsa based on our calculation.
- Fosun has increased its stake in Henlius by acquiring additional shares at HK$24.6/share, bringing its total ownership to 63.43%.This sends positive signals. A falling stock price is a buying opportunity.
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