This Week in Asia #40

Alibaba just announced that it will raise US$10 billion, despite having bought back shares for years. Substack author Tailwind Holdings wrote a fascinating post on Hong Kong contractor Baguio Green Group. And I published a deep-dive on Chinese online travel agent Trip.com, whose stock has declined due to an early 2026 antitrust investigation.

Watchlist update

• After an epic slump in Xiaomi's share price, it's now become one of the top recent performers in Asia. Its revenue dropped -6% year-on-year in the last quarter, but management said that memory-price inflation in the second half of 2026 will be slower. Meanwhile, Xiaomi's EV revenue grew +16% year-on-year.
• Alibaba will raise US$10 billion to fund AI infrastructure and development. It had already burned through half of its three-year capex plan, so it needs more capital. This will be the largest primary follow-on offering by a Hong Kong-listed company ever.
• SK Hynix announced a KRW 40 trillion share repurchase program, and committed to returning more than 50% of cumulative free cash flow between 2025 and 2027 to shareholders. However, SK Hynix has already committed to investing KRW 54 trillion in new fabs, so let's see how much remains after its capex.
• Pop Mart released a first-half report that was sequentially negative. Headline revenue rose +24% year-on-year, but an implied -27% quarter-on-quarter, suggesting weakness in demand for its toys. Founder Wang Ning said that Pop Mart is highly likely to fall short of its 20% full-year growth target. A CNY 2-5 billion buyback was also announced. (Full disclosure: I am short Pop Mart.)
• Smart Insider data highlighted an insider buy at Thailand's largest refiner and fuel retailer Bangchak, with CEO Chaiwat Kovavisarach buying an additional US$145,000 worth of shares. Alexander Eliasson has argued that Bangchak is benefiting from the recent rise in global oil prices. According to TIKR, the stock trades at 3.3x P/E with a 7.5% yield. However, the refining industry is cyclical and oil prices could easily come down. In addition, some investors are voicing concerns about the new 17% shareholder Alpha Chartered Energy.

Worth your time

• Vincent Deluard went on The Market Huddle where he discussed the Japanese yen. He thinks the narrative about the Japanese debt crisis is overblown, and that the depreciation of the Japanese yen since 2011 is near exhaustion. 30-year JGBs are getting close to 4%, so the yield differential at the long end has narrowed.
• I loved Bloomberg's Big Take Asia episode on North Korea's economy. It argued that the North Korean economy is booming. The likely explanation is that North Korean troops are sent to help Russia in its war in Ukraine, earning North Korea scarce foreign currency. Pyongyang is becoming increasingly electrified, as can be observed from recent satellite photos.
• Ryan Albert at Terton Capital sent a new letter to the board of directors of Golfzon Holdings, criticizing the lack of timely disclosures. He's now encouraging the board to give supporting evidence for the KRW 6,700 valuation that it previously deemed "fair", as well as disclose the status of the Golfzon County sale process. The second tender offer runs to 2 September 2026. Ryan is a shareholder so he has a financial interest in the outcome.
• Demystified Value wrote up Cuckoo Holdings, a South Korean producer of rice cookers. It's the holding company in the group, with its two operating companies being Cuckoo Electronics and separately listed appliance rental business Cuckoo Homesys. He estimates the stock trading at 6x P/E with a 6% dividend yield. However, it has been criticized for its corporate governance in the past.
• Tailwind Holdings wrote up Hong Kong cleaning, waste management & pest control company Baguio Green Group. It employs 11,000 people, keeping local hospitals, universities, airports and streets clean. On Tailwind's numbers, the stock trades at 4x P/E with net cash 50% of the market cap. That said, it's a competitive business highly reliant on the Hong Kong government.

Trip.com

Yesterday, I published a deep-dive on Chinese online travel agent Trip.com.

The company dominates the online travel agent industry within China, and also has a Singapore-based international arm that's growing quickly. The stock has declined significantly this year due to an antitrust case that led to a CNY 5.2 billion penalty and fears that it will get disrupted by generative AI.

Read the full deep-dive here:

Deep-dive: Trip.com (TCOM US)

China’s largest online travel agent, now expanding internationally

Asian Century StocksMichael Fritzell

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