Core Viewpoint - The report from Credit Lyonnais indicates that Samsonite's sales in the second quarter are expected to decline by 6% year-on-year at constant exchange rates, which is a further deterioration from the 5% decline in the first quarter, primarily due to weakened travel demand [1] Group 1: Sales and Profit Forecasts - The company anticipates that gross margin and adjusted EBITDA margin will remain stable at 59% and 16.6% respectively, showing no significant change quarter-on-quarter [1] - Full-year sales forecast for Samsonite has been revised down to a 6% year-on-year decline, while adjusted net profit forecast has been lowered by 25% year-on-year to reflect the short-term weakness in travel [1] Group 2: Target Price and Market Outlook - The target price for Samsonite has been reduced from HKD 30 to HKD 22, considering the low valuation and the potential for future improvement in outlook [1] - Despite the current challenges, the company maintains a "highly confident outperform" rating, citing the potential for a revaluation opportunity with the upcoming dual listing [1]

Core Viewpoint - The Hong Kong IPO market is experiencing a significant recovery in the first half of 2025, driven by strong market performance, relaxed listing rules, and regulatory support for dual listings [1][2]. Group 1: Factors Driving IPO Activity - The recovery in the Hong Kong IPO market is attributed to multiple factors, including a rebound in the market that has sparked corporate financing interest, with the Hang Seng Index showing its best performance in a decade [2]. - The Hong Kong Stock Exchange has optimized its rules to enhance attractiveness for high-quality companies, facilitating market activity [2]. - Specific rule optimizations include shortening application timelines and introducing a technology company channel to support confidential filings and non-equity voting structures [2][3]. Group 2: Dual Listings and Regulatory Support - Regulatory bodies are actively promoting dual listings, with measures announced to support leading domestic companies in listing in Hong Kong [3]. - A-share companies are seeking internationalization through Hong Kong listings to establish offshore financing channels and attract overseas investment [3]. - ADR companies are pursuing dual listings to mitigate delisting risks, with approximately 80% of ADR institutional investors already involved in the Hong Kong market [3]. Group 3: Market Sentiment and Liquidity - Active IPOs enhance market sentiment, correlating positively with index trends and trading speed, as companies tend to raise funds during high valuation periods [4]. - The low interest rate environment supports participation in IPOs, with significant liquidity available following interventions by the Hong Kong Monetary Authority [4]. - Historical data indicates that large IPOs have a short-term positive impact on the market, with strong inflows from southbound and active funds reflecting improved risk appetite [4]. Group 4: Investor Participation - The Hong Kong IPO market attracts a diverse range of investors, including hedge funds, mutual funds, pension funds, sovereign wealth funds, and retail investors [5]. - Cornerstone investors accounted for 42% of total fundraising this year, with two-thirds coming from foreign investors, indicating increased participation from global long-term investors [5]. - Retail investor interest has reached a multi-year high, with a demand-supply ratio averaging 9%, lower than the past five-year average of 25%, reflecting improved public risk appetite [5]. Group 5: Future Performance Factors - The average first-day return for Hong Kong IPOs is projected at 10% for 2024-2025, with first-month returns at 17% and three-month returns at 41%, significantly exceeding the previous five-year averages [6]. - The proportion of cornerstone investors is a key determinant of post-IPO performance, with companies having 30%-50% cornerstone holdings historically performing best [6]. Group 6: Spillover Effects on A-shares and Industry Peers - Active IPOs in Hong Kong positively influence the A-share market, with historical data showing that strong IPO activity correlates with good performance in A-shares [7]. - Industries with newly listed companies in Hong Kong typically outperform the market in the following week, although this effect tends to diminish over the subsequent month [7]. Group 7: Index Inclusion and Southbound Fund Impact - Approximately $134 billion in passive funds track indices that include Chinese stocks, with significant funds following the Hang Seng Index and Hang Seng Tech Index [8]. - New listings meeting certain market capitalization and liquidity requirements can be quickly included in indices after 10 trading days, facilitating access to southbound funds [8]. - Historical evidence shows that southbound buying can persist for several months after a company is included in southbound trading, with notable increases in southbound holdings for dual-listed companies [8]. Group 8: Investment Implications - The market recovery is favorable for the Hong Kong Stock Exchange and Chinese offshore brokers, with new stocks in popular sectors like consumer, healthcare, and technology showing higher demand [9]. - Dual-listed stocks are expected to perform strongly, with corresponding A-shares and ADRs also showing positive returns [9]. - A selection of 20 high-quality A-shares with announced plans to list in Hong Kong has been identified, characterized by strong earnings growth and reasonable valuations [9].

Core Viewpoint - New Third Board companies can directly list on NASDAQ without needing to delist first, following the revised Securities Law Implementation Regulations in 2024, which recognizes the New Third Board as a national securities trading venue [1][6]. Group 1: Policy Environment - The 2024 revision of the Securities Law Implementation Regulations clarifies the New Third Board's status, allowing companies to retain their domestic listing while pursuing overseas financing [6]. - The China Securities Regulatory Commission (CSRC) has simplified the overseas listing filing process, with over 96 companies approved in 2024, including 51 for U.S. listings [3][6]. Group 2: Operational Pathways - New Third Board companies must complete the CSRC's overseas listing filing and meet NASDAQ's financial standards, such as a net profit of $750,000 or a valuation of $50 million [3]. - Companies can choose a traditional IPO route if they meet NASDAQ Global Market standards, as demonstrated by Dongyuan Logistics raising $8 million [7]. - The SPAC merger route has gained traction, allowing companies to go public quickly, with valuations typically increasing by 300%-500% [8]. Group 3: Market Effects - Dual-listed companies can create a beneficial cycle of "New Third Board financing + NASDAQ pricing," with a reported 62% year-on-year increase in R&D investment for companies listed on both markets [9]. - The differences in information disclosure between the two markets may lead to increased compliance costs [9].

Core Viewpoint - The Chinese government has introduced policies to facilitate the listing of Hong Kong-listed companies from the Guangdong-Hong Kong-Macao Greater Bay Area on the Shenzhen Stock Exchange, aiming to enhance the competitiveness of the Shenzhen market and attract international capital [1][2]. Group 1: Policy Overview - The State Council's recent opinion allows eligible Hong Kong-listed companies to issue depositary receipts on the Shenzhen Stock Exchange [1]. - The policy aims to strengthen the core position of the Shenzhen Stock Exchange in the capital market and promote cross-border financial flows [1][2]. Group 2: Potential Companies for "Return to A-Shares" - Approximately 200 companies from Guangdong are currently listed in Hong Kong but not in A-shares, with many using the red-chip model [2]. - Notable companies that could consider returning to A-shares include Tencent Holdings, Tencent Music, and Xiaopeng Motors, among others [2][3]. - Companies like Sunshine Insurance and Yubis have registered in mainland China and are also potential candidates for A-share listings [3][4]. Group 3: Types of Companies Likely to "Return to A-Shares" - High-tech companies with undervalued stock in Hong Kong may seek to return to A-shares for better valuations and funding opportunities [4][5]. - Mature tech platform companies that are still in a "burning cash" phase may also consider returning to A-shares for additional financial support [5]. - Core technology companies in policy-sensitive industries may benefit from the dual support of national policies and market funding by returning to A-shares [5]. Group 4: Challenges in Policy Implementation - The transition from Hong Kong to A-shares may face challenges due to differences in listing rules, financial auditing standards, and information disclosure requirements [7][8]. - Companies using red-chip or VIE structures may encounter high costs and lengthy processes to adjust their structures for A-share listings [7][8]. - The need for high-quality Chinese information disclosure and technical verification may pose additional hurdles for tech companies [8]. Group 5: Recommendations for the ChiNext Board - Suggestions include simplifying the review process for returning companies and establishing a green channel for eligible firms to expedite the listing process [9][10]. - The introduction of a dedicated channel for tech companies on the ChiNext Board could focus on core technology and business models rather than short-term profitability [10]. - Encouraging the use of depositary receipts for tech companies could lower the costs associated with structural adjustments [10].

Core Viewpoint - The recent issuance of the "Opinions" by the Central Committee and the State Council aims to deepen reform and innovation in Shenzhen, particularly focusing on financial integration with technology industries and allowing dual listings for companies in the Guangdong-Hong Kong-Macao Greater Bay Area [1][2]. Financial Integration Initiatives - The "Opinions" support the establishment of a special pilot for financial integration with technology industries in Shenzhen, which is expected to enhance financial support for technological innovation and industrial development [1][4]. - The policy allows companies listed on the Hong Kong Stock Exchange to also list on the Shenzhen Stock Exchange, facilitating a "dual listing" mechanism that promotes cross-border capital flow and enhances the capital market's core position in the Greater Bay Area [2][3]. Challenges and Opportunities - Current challenges for companies listed in Hong Kong seeking to list in Shenzhen include compliance cost differences due to varying accounting standards and governance requirements, as well as restrictions on cross-border capital flows [3][6]. - The "Opinions" aim to address these challenges by creating a more integrated financial ecosystem that supports the high-quality development of the real economy and enhances Shenzhen's global competitiveness as a preferred listing location for technology companies [2][5]. Characteristics of Financial Measures - The financial measures outlined in the "Opinions" emphasize a comprehensive collaboration between technology and finance, moving from traditional credit support to a more integrated approach involving equity and debt linkage, as well as intellectual property securitization [6][7]. - The initiatives also highlight the unique cross-border financial integration between Shenzhen and Hong Kong, aiming to establish a dual-core financial center model that leverages both regions' strengths [6][7]. Strategic Importance - The financial initiatives are driven by national strategic goals, addressing key issues such as technological bottlenecks and the need for financial openness, while also leveraging Shenzhen's existing advantages in technology and finance [7][8]. - The urgency of these measures is underscored by the need to innovate funding channels and meet diverse funding demands during the industrial upgrade window [8].

Core Viewpoint - Longqi Technology (603341) is facing a decline in stock price following the announcement of its plan to list H-shares in Hong Kong, raising concerns about potential share dilution while some investors remain optimistic about the company's global strategy [1][2]. Group 1: Stock Performance and Trading Activity - On May 23, 2025, Longqi Technology's stock closed at 38.02 yuan, down 3.65% from the previous day, hitting a new low for the year [1]. - A block trade occurred where an institutional seller sold 200,000 shares at a price of 37.64 yuan, representing a 1% discount to the closing price, accounting for 4.48% of the day's trading volume [1][2]. Group 2: Financial Performance and Future Outlook - Longqi Technology reported a 70.62% year-on-year increase in revenue for 2024, reaching 46.382 billion yuan, but the net profit attributable to shareholders decreased by 17.21% to 501 million yuan [1]. - In Q1 2025, the company's net profit rebounded by 20.3% to 154 million yuan [1]. - The company, which went public on the A-share market in March 2024, has a current market capitalization of 17.683 billion yuan and a dynamic P/E ratio of 28.68 [1]. Group 3: Business Operations and Clientele - Longqi Technology operates in the ODM sector for smart products, with a diverse portfolio including smartphones, AIPC, and automotive electronics, serving major clients such as Xiaomi, Samsung, and Honor [1]. - The company has established production bases in Vietnam and India, which are expected to handle orders for AR glasses and smartphones, with significant growth anticipated in AIPC and automotive electronics by 2027 [1].

Core Insights - The phenomenon of price discrepancies between the same company's stock traded in different markets creates unique arbitrage opportunities, particularly for Chinese concept stocks dual-listed in the US and Hong Kong [1][3] - The divergence in pricing is primarily due to different risk perceptions among global investors, with US investors focusing on global competition and Hong Kong investors emphasizing local policies and funding preferences [1][3] - The efficiency of information transmission between markets is crucial for identifying arbitrage opportunities, as discrepancies often arise during significant policy announcements or earnings releases [3][5] Market Dynamics - Price differences between markets can reach 3%-8%, with instances where discrepancies persist above 5% for extended periods, attracting institutional investors to engage in arbitrage [1][3] - The impact of external factors such as currency fluctuations and short-selling costs can significantly affect theoretical returns, with a reported 40% increase in arbitrage hedging costs during the 2023 Federal Reserve interest rate hike cycle [3][5] - Regulatory differences between the US and Hong Kong, particularly in information disclosure, can lead to valuation misalignments, as seen with a specific electric vehicle company facing discrepancies in carbon emission data reporting [3][5] Investment Strategies - To effectively capture arbitrage opportunities, investors need to utilize tools that provide insights into market dynamics, including real-time monitoring of cross-market capital flows and analysis of institutional trading data [3][5] - Advanced analytical platforms are being developed to identify historical price convergence patterns and construct warning models based on volatility indices and short-selling ratios in Hong Kong [3][5] - Establishing a multi-dimensional monitoring framework is essential for understanding pricing anchors in different markets and mitigating losses from institutional frictions [5]