In today’s briefing:
- Quiddity Leaderboard ChiNext & ChiNext 50 Jun25: US$1.4bn Total One-Way Flows; Basket Trade Idea
- Quiddity Leaderboard STAR 50/100 Jun25: ~US$1bn+ One-Way; Multiple Changes and Conviction Levels
- ENN Energy (2688 HK): Third Party Offer?
- Link REIT (823 HK)
- Pinduoduo (PDD): 4Q24, Not Slowdown, Still Advantage in Low Price Market, 70% Upside
- Geely Auto (175 HK): 2024 Result Accelerating, 50% Upside
- Asia Real Estate Tracker (20-Mar-2025): Digital Realty enters Indonesia market with Bersama.
- Q424 ZTO Express Results & FY25 Guidance: Revenue Growth & Margin Better, But OpCF Shrinking; AVOID
- Kuaishou Earnings: Options Market Expectations and Post-Earnings Trends
Quiddity Leaderboard ChiNext & ChiNext 50 Jun25: US$1.4bn Total One-Way Flows; Basket Trade Idea
- 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 9 changes for the ChiNext index and 5 changes for the ChiNext 50 index in the next index rebal event in June 2025.
Quiddity Leaderboard STAR 50/100 Jun25: ~US$1bn+ One-Way; Multiple Changes and Conviction Levels
- 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.
ENN Energy (2688 HK): Third Party Offer?
- ENN Energy (2688 HK), a major clean energy distributor based in China, is currently suspended pursuant to the Takeovers Code
- The largest shareholder is ENN Group (34.28% of shares out), an entity controlled by founder Wang Yusuo and his wife, Zhao Baoju.
- ENN Energy is a US$8.5bn market cap company. It’s possible ENN Group make an Offer. But more likely, I’d expect an Offer from a (larger) third party.
Link REIT (823 HK)
- The largest REIT in Asia, with enough liquidity for most funds. Has a great set of neighborhood malls across Hong Kong enjoying recurring income from food & beverage, restaurants, etc
- Suffered during the COVID-19 pandemic but DPU has started growing again. Rights issue a misstep but the leverage is now acceptable. New Blackrock CIO bodes well for M&A.
- REIT trades at 7% yield vs 4% historically. Essentially an interest rate bet. Will probably be included in the Stock Connect program soon, expect an announcement on 19 April.
Pinduoduo (PDD): 4Q24, Not Slowdown, Still Advantage in Low Price Market, 70% Upside
- PDD’s total revenue grew by 24% YoY in 4Q24, with advertising up by 17% YoY and commission up by 33% YoY.
- The gross margin declined YoY, but we still believe PDD has advantage in the low price market.
- We conclude an upside of 71% and a price target of US$215 for the next twelve months.
Geely Auto (175 HK): 2024 Result Accelerating, 50% Upside
- Total revenue increased by 34% and total sales volume increased by 32%.
- The operating margin improved to 4% in 2024, compared to 2% in 2023.
- We conclude an upside of 51% and a price target of HK$28.00. Buy.
Asia Real Estate Tracker (20-Mar-2025): Digital Realty enters Indonesia market with Bersama.
- Digital Realty partners with Bersama to enter Indonesia’s data center market, expanding their global presence in the industry.
- Leading firms KKR, Gaw, and Alyssa highlight favorable macroeconomic factors driving growth in Japan’s multi-family sector on MTD TV.
- Singapore’s largest REIT, CapitaLand, undergoes a leadership reshuffle with the appointment of a new CEO to drive strategic initiatives.
Q424 ZTO Express Results & FY25 Guidance: Revenue Growth & Margin Better, But OpCF Shrinking; AVOID
- Q424 revenue growth & EBITDA margin both improved noticeably vs Q324
- Additionally, ZTO gave FY25 parcel volume guidance that implies an acceleration of growth
- But “key” change in revenue mix is crushing cash returns (Q424 OpCF down -28% Y/Y)
Kuaishou Earnings: Options Market Expectations and Post-Earnings Trends
- A detailed analysis of the earnings implied jump in Kuaishou options compared to historical outcomes.
- Pre- and post-earnings price movements are examined to assess directional tendencies and magnitude.
- We find that returns heading into and after earnings have shown a strong bias.
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