In today’s briefing:
- HK Connect SOUTHBOUND Flows (To 13 Dec 2024); Politburo Policy Change Bullish, Markets Wary, Buying
- Alibaba Group Holdings: The Tale Of International E-commerce & Cross-border Growth! – Major Drivers
- A/H Premium Tracker (To 13 Dec 2024): Pairwise Intracorrelation and Vol Way Up, Premia Down
- CPMC (906 HK): Not A Shadow Of Doubt (!) As Pre-Cons Fulfilled
- Quiddity Leaderboard Hang Seng Internet & IT March 25: 4 Changes Likely, Some Names Have High Impact
- China Healthcare Weekly (Dec.15) – 10th VBP Results, WuXi Shares Surge, Newjf Will Be Successful
- Quiddity Leaderboard HSCEI Mar 25: One Change Likely but More Names Lurking Close to the Border
- Weekly Deals Digest (15 Dec) – Fosun Tourism, CPMC, ESR, Fuji Soft, NEC Networks, Topcon, Kioxia
- Sinopharm (1099 HK) – A Compelling Investment Case
- SF Holding Pre-IPO: Head-To-Head Comparison of SF Holding & JD Logistics
HK Connect SOUTHBOUND Flows (To 13 Dec 2024); Politburo Policy Change Bullish, Markets Wary, Buying
- SOUTHBOUND gross trading activity rebounded about 33% this week vs the previous week. Net buying was a little lower but still strong. Market volumes overall in HK rebounded.
- Alibaba Group Holding (9988 HK) was again the top buy and Tencent (700 HK) and Meituan (3690 HK) the top two sells. Tech is having a mixed outing now.
- Gross SOUTHBOUND volumes back up this week to levels seen just off the autumn peak. An interesting week as stocks popped Monday, opened high Tuesday, then fell all week.
Alibaba Group Holdings: The Tale Of International E-commerce & Cross-border Growth! – Major Drivers
- Alibaba Group’s September Quarter 2024 results reveal a balance of positive developments and ongoing challenges.
- The company has shown resilience in its core business segments, leveraging an AI-driven strategy to enhance user engagement and operational efficiency.
- Steady growth has been noted in both domestic and international e-commerce segments, with Alibaba International Digital Commerce recording a substantial 29% revenue growth.
A/H Premium Tracker (To 13 Dec 2024): Pairwise Intracorrelation and Vol Way Up, Premia Down
- Mainland share market volumes continue to be better than HK and SOUTHBOUND volumes, but SB volumes rebounded, tech saw limited net buying, BABA was bought but other major tech sold.
- The first leg of China’s retaliatory acts against US trade measures appeared with export bans on gallium, germanium, antimony, graphite products, etc. These will not be lifted soon.
- China is also retaliating against the Phils, Vietnam, Taiwan and changing tack in Europe. The next couple of years threatens to be “interesting times.
CPMC (906 HK): Not A Shadow Of Doubt (!) As Pre-Cons Fulfilled
- My conversation with the FA earlier this week largely put to rest a number of concerns, specifically on regulatory approvals, surrounding the Offer for CPMC Holdings (906 HK).
- As announced on the 13th December, the last pre-condition, SAFE, has been satisfied. All pre-cons have been fulfilled. The Offer Doc will be dispatched on or before the 20th December
- This could turn unconditional before year-end, depending on whether Zhang Wei promptly tenders. Expect the share price to trade tight (er) to terms Monday morning.
Quiddity Leaderboard Hang Seng Internet & IT March 25: 4 Changes Likely, Some Names Have High Impact
- 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 the rankings of potential ADDs and potential DELs for the March 2025 index rebal event.
- Based on the latest available data, we see four ADDs and four DELs for HSIII in March 2025.
China Healthcare Weekly (Dec.15) – 10th VBP Results, WuXi Shares Surge, Newjf Will Be Successful
- The 10th national VBP released results. The average price reduction was about 70%. CSPC, Kelun, Fosun Pharma, Sino Biopharmaceutical are the “main force” and their performance would be affected.
- WuXi Shares surge due to the absence of BIOSECURE Act from the proposed amendments to US NDAA. However, the rally could be short-term as the Bill may return next year.
- Pre-Conditions of Newjf have been smooth so far. We think investors can directly consider Newjf’s Offer. Based on the current situation, we are optimistic that Newjf will finally be successful.
Quiddity Leaderboard HSCEI Mar 25: One Change Likely but More Names Lurking Close to the Border
- 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 final rankings for the HSCEI potential ADDs and potential DELs for the index rebal event in March 2025.
- At present, we see one change based on the 13th December 2024 data but the rankings can change until 31st December 2024.
Weekly Deals Digest (15 Dec) – Fosun Tourism, CPMC, ESR, Fuji Soft, NEC Networks, Topcon, Kioxia
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments: Kioxia Holdings (285A JP) priced its IPO at JPY1,455, the midpoint of the IPO price range.
- Event-Driven developments: Fosun Tourism (1992 HK), CPMC Holdings (906 HK), Fuji Soft Inc (9749 JP), Nec Networks & System Integr (1973 JP), Topcon Corp (7732 JP), Insignia Financial (IFL AU).
Sinopharm (1099 HK) – A Compelling Investment Case
- Sinopharm will benefit from the strong expected growth in China’s healthcare spend.
- There is scope to increase its distribution which will continue to shield the company from short-term volatility.
- Pricing pressure in drug prices creates opportunity to optimise range and improve profitability.
SF Holding Pre-IPO: Head-To-Head Comparison of SF Holding & JD Logistics
- SF’s revenue base is far larger, and in Q324 SF’s revenue also grew faster than JD Logistics
- SF and JD Log reported similar EBITDA margins in Q324, & both enjoyed Y/Y improvement
- JD Log appears far cheaper on EV/Revenue, perhaps due to its reliance on parent JD.com
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
