Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

GOME Retail Holdings / Equity Capital Markets

<ul>
<li>As the mismatch between short-term assets and liabilities expands, GOME is raising HK$776.5m at HK$0.40 per-share, which is a 12.1% discount to the closing price on 27th June 2022.</li>
<li>This is clearly insufficient to pay down <a href="https://www.smartkarma.com/entities/gome-retail-holdings-ltd" target="_blank" data-smartkarma-citation="entities:170:1" rel="noopener">GOME Retail Holdings (493 HK)</a>'s RMB 40.0bn short term debt and accounts payable obligations falling due in the next 12 months.</li>
<li>With the omni-channel transformation taking longer than expected to turn around performance, the company might find it difficult to refinance the debt and maintain the supply chain as usual.</li>
</ul>


As the mismatch between short-term assets and liabilities expands, GOME is raising HK$776.5m at HK$0.40 per-share, which is a 12.1% discount to the closing price on 27th June 2022.
This is clearly insufficient to pay down GOME Retail Holdings (493 HK)'s RMB 40.0bn short term debt and accounts payable obligations falling due in the next 12 months.
With the omni-channel transformation taking longer than expected to turn around performance, the company might find it difficult to refinance the debt and maintain the supply chain as usual.


GOME Retail Placement: The Crisis Persists

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>CSRC and SFC have approved the inclusion of eligible ETFs in Stock Connect and trading of the ETFs under Stock Connect would begin from 4 July.</li>
<li>There are 4 ETFs included in Southbound Stock Connect, while there are 83 ETFs that have been included in Northbound Stock Connect.</li>
<li>Under Stock Connect, only secondary trading is allowed in the ETFs with no creations or redemptions permitted. This will have implications for short-term and long-term repo on the HSI/HSCEI/HSTECH indices.</li>
</ul>


CSRC and SFC have approved the inclusion of eligible ETFs in Stock Connect and trading of the ETFs under Stock Connect would begin from 4 July.
There are 4 ETFs included in Southbound Stock Connect, while there are 83 ETFs that have been included in Northbound Stock Connect.
Under Stock Connect, only secondary trading is allowed in the ETFs with no creations or redemptions permitted. This will have implications for short-term and long-term repo on the HSI/HSCEI/HSTECH indices.


ETFs in Stock Connect: List Announced; Effective 4 July

Index Rebalance

<ul>
<li>We do not expect any inclusions or exclusions for the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a> at the September rebalance.</li>
<li>Float and capping changes will lead to a one-way turnover of 6.5% and that will result in a one-way trade of HK$4,913m.</li>
<li>
<a href="https://www.smartkarma.com/entities/sensetime-group-inc" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime Group (20 HK)</a> will have the largest buying flow due a potential increase in free float. The stock is also a potential inclusion to the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI INDEX</a> in September.</li>
</ul>


We do not expect any inclusions or exclusions for the Hang Seng Tech Index (HSTECH INDEX) at the September rebalance.
Float and capping changes will lead to a one-way turnover of 6.5% and that will result in a one-way trade of HK$4,913m.

SenseTime Group (20 HK) will have the largest buying flow due a potential increase in free float. The stock is also a potential inclusion to the HSCEI INDEX in September.


HSTECH Index Rebalance Preview (Sep): Free Float & Capping Changes To Drive Flows

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>It's been a long-time coming. <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> and parent <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> will gradually sell down their stake in <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> to fund a share purchase program.</li>
<li>Preceding my comments on Prosus and Naspers, are the current setup/unwind tables for Asia-Pacific Holdcos. </li>
<li>These relationships trade with a minimum liquidity of US$1mn, and a % of market capitalisation greater than 20%.</li>
</ul>


It's been a long-time coming. Prosus (PRX NA) and parent Naspers (NPN SJ) will gradually sell down their stake in Tencent (700 HK) to fund a share purchase program.
Preceding my comments on Prosus and Naspers, are the current setup/unwind tables for Asia-Pacific Holdcos. 
These relationships trade with a minimum liquidity of US$1mn, and a % of market capitalisation greater than 20%.


StubWorld: Prosus & Naspers Gain On Buyback Funded By Tencent Share Sale

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

<ul>
<li>Tencent sold US$3bn worth of SEA shares in Jan 22. The rest of its stake was locked up for six months.</li>
<li>The initial stake sale by Tencent didn’t go down too well and the stock is now trading over 63% below the deal price.</li>
<li>In this note, we will talk about the lock-up dynamics and recent updates.</li>
</ul>


Tencent sold US$3bn worth of SEA shares in Jan 22. The rest of its stake was locked up for six months.
The initial stake sale by Tencent didn’t go down too well and the stock is now trading over 63% below the deal price.
In this note, we will talk about the lock-up dynamics and recent updates.


SEA Lock-Up - Tencent Is once Again About to Be Free to Trim Its US$8bn Stake

China

JD.com Inc is an online direct sales company in China.  The Company offers a wide selection of products through its website and mobile applications.  JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

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JD.com (ADR) (JD US)

GOME Retail Placement: The Crisis Persists

With the omni-channel transformation taking longer than expected to turn around performance, GOME Retail might find it difficult to refinance the...

Oshadhi Kumarasiri

ETFs in Stock Connect: List Announced; Effective 4 July

CSRC & SFC have approved the inclusion of eligible ETFs in Stock Connect. Trading of the ETFs under Stock Connect begins from 4 July. There are 83...

Brian Freitas

HSTECH Index Rebalance Preview (Sep): Free Float & Capping Changes To Drive Flows

No adds/deletes likely in September but float and capping changes will lead to a one-way turnover of 6.5% and that will result in a one-way trade...

Brian Freitas

SEA Lock-Up - Tencent Is once Again About to Be Free to Trim Its US$8bn Stake

Tencent sold US$3bn worth of SEA shares in Jan 22. The rest of its stake was locked up for six months, which will soon be over.

Sumeet Singh

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52-week Range

Market Cap (USDm)

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Dividend (Yield)

GOME Retail Placement: The Crisis Persists

With the omni-channel transformation taking longer than expected to turn around performance, GOME Retail might find it difficult to refinance the...

Oshadhi Kumarasiri

ETFs in Stock Connect: List Announced; Effective 4 July

CSRC & SFC have approved the inclusion of eligible ETFs in Stock Connect. Trading of the ETFs under Stock Connect begins from 4 July. There are 83...

Brian Freitas

HSTECH Index Rebalance Preview (Sep): Free Float & Capping Changes To Drive Flows

No adds/deletes likely in September but float and capping changes will lead to a one-way turnover of 6.5% and that will result in a one-way trade...

Brian Freitas

StubWorld: Prosus & Naspers Gain On Buyback Funded By Tencent Share Sale

Buying a material percentage of Prosus' float at 40%+, translates to a significant lift in NAV/share accretion, even if Tencent remains static. Go...

David Blennerhassett

SEA Lock-Up - Tencent Is once Again About to Be Free to Trim Its US$8bn Stake

Tencent sold US$3bn worth of SEA shares in Jan 22. The rest of its stake was locked up for six months, which will soon be over.

Sumeet Singh