Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

Shenton Research

Shenton Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 196 stocks over the last week. The average A-H premium was 82.7% as of Aug 14th.</li>
<li>The average A-H premium changed by 1.0ppt week-on-week, led by consumer staples, health care, materials and offset by information technology, energy, real estate.</li>
<li>We highlight weekly changes in A-H premium for Muyuan Foods Group Co Ltd-H, Innocare Pharma Ltd-H, Luxshare Ict, China Telecom.</li>
</ul>


We analyse the changes of A-H premium on 196 stocks over the last week. The average A-H premium was 82.7% as of Aug 14th.
The average A-H premium changed by 1.0ppt week-on-week, led by consumer staples, health care, materials and offset by information technology, energy, real estate.
We highlight weekly changes in A-H premium for Muyuan Foods Group Co Ltd-H, Innocare Pharma Ltd-H, Luxshare Ict, China Telecom.


A-H Premium Weekly (Aug 14th): Muyuan Foods Group Co Ltd-H, Innocare Pharma Ltd-H, Luxshare Ict

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Aug 7th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period.</li>
<li>We highlight short changes in Wuxi Apptec, Zijin Gold Intl, Kingboard Laminates, Minimax, CCB, ICBC, Petrochina.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Aug 7th.
Top short increases and decreases were tabulated for one week and four week period.
We highlight short changes in Wuxi Apptec, Zijin Gold Intl, Kingboard Laminates, Minimax, CCB, ICBC, Petrochina.


HK Short Interest Weekly: Wuxi Apptec, Zijin Gold Intl, Kingboard Laminates, Minimax, CCB, ICBC

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Thematic (Sector/Industry)

<ul>
<li>Investors appear to have lost faith in China healthcare following a plunge in CXO shares.But seeing the decline in CXO orders as indicator of industry's prosperity is a lagging view.</li>
<li>The logic of CXO is tied to biotech on the one hand and to overseas relationships on the other. But Biotech remains the cornerstone of the overall logical chain. </li>
<li>According to the primary market situation, we’re not optimistic about CXO's domestic business to achieve a significant recovery next year, but the overseas recovery/financing situation may improve a bit faster.</li>
</ul>


Investors appear to have lost faith in China healthcare following a plunge in CXO shares.But seeing the decline in CXO orders as indicator of industry's prosperity is a lagging view.
The logic of CXO is tied to biotech on the one hand and to overseas relationships on the other. But Biotech remains the cornerstone of the overall logical chain. 
According to the primary market situation, we’re not optimistic about CXO's domestic business to achieve a significant recovery next year, but the overseas recovery/financing situation may improve a bit faster.


China CXO Has Reached a Crossroads - Time to Reconsider

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Equity Bottom-Up

<ul>
<li>Since the last reshuffle (July 9), our Model Portfolio has appreciated 1.46%. MSCI Asia ex Japan index (MXASJ) has dropped 1.77%. AI infrastructure stocks primarily contributed to the portfolio drawdown.</li>
<li>Focus on AI "picks and shovels" providers, industrials, defense, industrial metals and banks remain. We also like Indian automobiles. We replace Hyundai Engineering and Construction with HD Hyundai Heavy Industries.</li>
<li>We are overweight on HK/China, Korea and India. We are underweight Taiwan but overweight Taiwan technology. We are Neutral ASEAN.</li>
</ul>


Since the last reshuffle (July 9), our Model Portfolio has appreciated 1.46%. MSCI Asia ex Japan index (MXASJ) has dropped 1.77%. AI infrastructure stocks primarily contributed to the portfolio drawdown.
Focus on AI "picks and shovels" providers, industrials, defense, industrial metals and banks remain. We also like Indian automobiles. We replace Hyundai Engineering and Construction with HD Hyundai Heavy Industries.
We are overweight on HK/China, Korea and India. We are underweight Taiwan but overweight Taiwan technology. We are Neutral ASEAN.


Asian Equities: Model Portfolio Outperformed; Minor Changes to the Industrials Sleeve

<ul>
<li>National centralized procurement on ophthalmology and orthopedics would be carried out soon, including ICL and sports medicine. Products in neuro-intervention/neurosurgery/peripheral intervention/IVD reagents would be included in 2023 VBP as well.</li>
<li>After NRDL negotiation/VBP/DRGs policies are fully mature, it is expected to see the emergence of some high-price-oriented payment system for innovative products. Only then will the industry beta really emerge.</li>
<li>If long-term money doesn't have enough understanding of the trend of long-term interest rates, the expected return and valuation model of healthcare companies can't be adjusted in time (e.g. CXO).</li>
</ul>


National centralized procurement on ophthalmology and orthopedics would be carried out soon, including ICL and sports medicine. Products in neuro-intervention/neurosurgery/peripheral intervention/IVD reagents would be included in 2023 VBP as well.
After NRDL negotiation/VBP/DRGs policies are fully mature, it is expected to see the emergence of some high-price-oriented payment system for innovative products. Only then will the industry beta really emerge.
If long-term money doesn't have enough understanding of the trend of long-term interest rates, the expected return and valuation model of healthcare companies can't be adjusted in time (e.g. CXO).


China Healthcare Weekly (Mar.17) - VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?

China

WuXi AppTec is a global contract research, development, and manufacturing organization (CRDMO) for the pharmaceutical and life sciences industries. It provides integrated, end-to-end services including chemistry drug CRDMO, biology discovery, preclinical testing, and clinical research services for various therapeutic modalities. The company was founded in 2000 and is headquartered in Shanghai, China.

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WuXi AppTec (2359 HK)

A-H Premium Weekly (Aug 14th): Muyuan Foods Group Co Ltd-H, Innocare Pharma Ltd-H, Luxshare Ict

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Muyuan Foods Group Co Ltd-H, Innocare Pharma Ltd-H, Luxshare...

Ke Yan, CFA, FRM

HK Short Interest Weekly: Wuxi Apptec, Zijin Gold Intl, Kingboard Laminates, Minimax, CCB, ICBC

We analyzed the latest HK SFC report for aggregate short position as of Aug 7th and highlight short interest changes in Wuxi Apptec, Zijin Gold...

Ke Yan, CFA, FRM

China CXO Has Reached a Crossroads - Time to Reconsider

Investors seem to have lost faith in China healthcare due to a plunge in CXO shares. This view is biased. It's time to clarify key logical points...

Xinyao (Criss) Wang

Asian Equities: Model Portfolio Outperformed; Minor Changes to the Industrials Sleeve

Model Portfolio outperformed MXASJ. Drivers: base metals, industrials, select consumers. Focus stays on AI "picks & shovels", industrial, defense,...

Manishi Raychaudhuri

China Healthcare Weekly (Mar.17) - VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?

National VBP on ICL/sports medicine and other fields is coming.It's expected to see the emergence of high-price-oriented payment system for...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

A-H Premium Weekly (Aug 14th): Muyuan Foods Group Co Ltd-H, Innocare Pharma Ltd-H, Luxshare Ict

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Muyuan Foods Group Co Ltd-H, Innocare Pharma Ltd-H, Luxshare...

Ke Yan, CFA, FRM

HK Short Interest Weekly: Wuxi Apptec, Zijin Gold Intl, Kingboard Laminates, Minimax, CCB, ICBC

We analyzed the latest HK SFC report for aggregate short position as of Aug 7th and highlight short interest changes in Wuxi Apptec, Zijin Gold...

Ke Yan, CFA, FRM

China CXO Has Reached a Crossroads - Time to Reconsider

Investors seem to have lost faith in China healthcare due to a plunge in CXO shares. This view is biased. It's time to clarify key logical points...

Xinyao (Criss) Wang

Asian Equities: Model Portfolio Outperformed; Minor Changes to the Industrials Sleeve

​Model Portfolio outperformed MXASJ. Drivers: base metals, industrials, select consumers. Focus stays on AI "picks & shovels", industrial, defense,...

Manishi Raychaudhuri

China Healthcare Weekly (Mar.17) - VBP on ICL/Sports Medicine, New Payment System, Time to Long CXO?

National VBP on ICL/sports medicine and other fields is coming.It's expected to see the emergence of high-price-oriented payment system for...

Xinyao (Criss) Wang

Model Portfolio outperformed MXASJ. Drivers: base metals, industrials, select consumers. Focus stays on AI "picks & shovels", industrial, defense,...