China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>1810.HK: India Enforcement Directorate issues Xiaomi show cause notice (-)</li>
<li>700HK: Tencent launched "White Night Aurora" on June 13th (+)</li>
<li>LI: Li Auto 's weekly delivery reaches 8.4k units (+)</li>
</ul>


1810.HK: India Enforcement Directorate issues Xiaomi show cause notice (-)
700HK: Tencent launched "White Night Aurora" on June 13th (+)
LI: Li Auto 's weekly delivery reaches 8.4k units (+)


China TMT Update June 15 - 1810.HK/700HK/LI: India Issues Xiaomi Show Cause Notice

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Jun 2nd.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Baba, Byd Company, Jd, Kuaishou, Jd Logistics, Ccb, Ntes.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Jun 2nd.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Baba, Byd Company, Jd, Kuaishou, Jd Logistics, Ccb, Ntes.


HK Short Interest Weekly: Baba, BYD, Jd, Kuaishou, Jd Logistics, CCB, Ntes

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of May 25th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We estimate the total short interest to decrease by 4.2% WoW and highlight short changes in CK Asset, Alibaba.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of May 25th.
Top short increases and decreases were tabulated for one week and four week period. 
We estimate the total short interest to decrease by 4.2% WoW and highlight short changes in CK Asset, Alibaba.


Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>The June rebalance of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a> and <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> indices will use today's closing prices to cap the index constituent weights at 8%. This will lead to large flows.</li>
<li>The largest inflows will be on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/zijin-mining-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:6358:1" rel="noopener">Zijin Mining (2899 HK)</a>, <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a>, <a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com (9961 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a>. </li>
<li>The largest outflows will be on <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings (5 HK)</a>, <a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/china-construction-bank-h" target="_blank" data-smartkarma-citation="entities:45:1" rel="noopener">China Construction Bank H (939 HK)</a> and <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>. </li>
</ul>


The June rebalance of the HSI, HSCEI and HSTECH indices will use today's closing prices to cap the index constituent weights at 8%. This will lead to large flows.
The largest inflows will be on Meituan (3690 HK), JD.com (9618 HK), Zijin Mining (2899 HK), Baidu (9888 HK), Trip.com (9961 HK) and JD Logistics (2618 HK). 
The largest outflows will be on HSBC Holdings (5 HK), Li Auto (2015 HK), Kuaishou Technology (1024 HK), China Construction Bank H (939 HK) and NetEase (9999 HK). 


HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (June 2023)

Equity Bottom-Up

<ul>
<li>Xiaomi reported C1Q23 top-line and non-IFRS net income (6.9%) and 20.7% vs. our est., and in-line and 39.9% vs. consensus; </li>
<li>We suggest that higher margins are transitory, as (1) key IC component prices may have bottomed, (2) EV spend is likely to ramp up further. </li>
<li>We maintain SELL and HK$ 8.2 TP, implying 26x FY23 PE.</li>
</ul>


Xiaomi reported C1Q23 top-line and non-IFRS net income (6.9%) and 20.7% vs. our est., and in-line and 39.9% vs. consensus; 
We suggest that higher margins are transitory, as (1) key IC component prices may have bottomed, (2) EV spend is likely to ramp up further. 
We maintain SELL and HK$ 8.2 TP, implying 26x FY23 PE.


[Xiaomi (1810 HK, SELL, TP HK$8.2) Earnings Review]: Good Cost Control Could Be Transitory

China

Xiaomi Corporation manufactures communication equipment and parts. The Company produces and sells mobile phones, smart phone software,  set-top boxes, and related accessories. Xiaomi markets its products worldwide.

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Xiaomi (1810 HK)

China TMT Update June 15 - 1810.HK/700HK/LI: India Issues Xiaomi Show Cause Notice

1810.HK: India Enforcement Directorate issues Xiaomi show cause notice (-)；700HK: Tencent launched "White Night Aurora" on June 13th (+)LI: Li Auto...

Blue Lotus Research Institute

HK Short Interest Weekly: Baba, BYD, Jd, Kuaishou, Jd Logistics, CCB, Ntes

We analyzed the latest HK SFC report for aggregate short position as of Jun 2nd and highlight short interest changes in Baba, Byd Company, Jd,...

Ke Yan, CFA, FRM

HK Short Interest Weekly: CK Asset, Baba

We analyzed the latest HK SFC report for aggregate short position as of May 25th and highlight short interest changes in Ck Asset, Baba.

Ke Yan, CFA, FRM

HSI, HSCEI, HSTECH: Rebalance Flows Post Capping (June 2023)

The June rebalance of the Hang Seng family of indices will use todays closing prices for capping. The one-way trade across all stocks across the...

Brian Freitas

[Xiaomi (1810 HK, SELL, TP HK$8.2) Earnings Review]: Good Cost Control Could Be Transitory

We suggest that higher margins are transitory, as (1) key IC component prices may have bottomed,and (2) EV spend is likely to ramp up further, as...

Blue Lotus Research Institute

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