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

Index Rebalance

Flowing Cloud Technology / Index Rebalance

<ul>
<li>The review cutoff date for the March rebalance of the HSIII was 29 December. The changes will be announced on 16 February and become effective after the close 1 March.</li>
<li>We see a high probability of <a href="https://www.smartkarma.com/entities/zx-inc" target="_blank" data-smartkarma-citation="entities:36624:1" rel="noopener">Zx Inc</a> replacing <a href="https://www.smartkarma.com/entities/flowing-cloud-technology-ltd" target="_blank" data-smartkarma-citation="entities:36461:1" rel="noopener">Flowing Cloud Technology (6610 HK)</a> in the index. There is a lower probability of <a href="https://www.smartkarma.com/entities/4paradigm" target="_blank" data-smartkarma-citation="entities:34465:1" rel="noopener">4Paradigm (6682 HK)</a> replacing <a href="https://www.smartkarma.com/entities/cmge-technology-group-ltd" target="_blank" data-smartkarma-citation="entities:451:1" rel="noopener"> CMGE Tech (302 HK)</a>. </li>
<li>Capping will result in passives buying <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and selling <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 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> and <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a>. </li>
</ul>


The review cutoff date for the March rebalance of the HSIII was 29 December. The changes will be announced on 16 February and become effective after the close 1 March.
We see a high probability of Zx Inc replacing Flowing Cloud Technology (6610 HK) in the index. There is a lower probability of 4Paradigm (6682 HK) replacing  CMGE Tech (302 HK). 
Capping will result in passives buying Meituan (3690 HK) and selling Tencent (700 HK), Kuaishou Technology (1024 HK), JD.com (9618 HK) and Alibaba Group Holding (9988 HK). 


Hang Seng Internet & IT Index Rebalance Preview: ZX Inc Could Replace Flowing Cloud

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.

Equity Capital Markets

Alibaba Group Holding  / Equity Capital Markets

<ul>
<li>Aequitas Reserach puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.</li>
<li>In the IPO space, <a href="https://www.smartkarma.com/entities/cainiao-smart-logistics-network-ltd" target="_blank" data-smartkarma-citation="entities:36859:1" rel="noopener">Cainiao Smart Logistics</a> finally set the ball rollling for <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba (ADR) (BABA US)</a>'s restrucuting, by filing for an HK listing</li>
<li>In the placement space, <a href="https://www.smartkarma.com/entities/star-entertainment-group-ltd" target="_blank" data-smartkarma-citation="entities:926:1" rel="noopener">Star Entertainment Group (SGR AU)</a> was back in the market again, while <a href="https://www.smartkarma.com/entities/zhejiang-leapmotor-technologie" target="_blank" data-smartkarma-citation="entities:35968:1" rel="noopener">Zhejiang Leapmotor Technologie (9863 HK)</a> and <a href="https://www.smartkarma.com/entities/dpc-dash-ltd" target="_blank" data-smartkarma-citation="entities:36556:1" rel="noopener">DPC Dash (1405 HK)</a> came of lock-ups.</li>
</ul>


Aequitas Reserach puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
In the IPO space, Cainiao Smart Logistics finally set the ball rollling for Alibaba (ADR) (BABA US)'s restrucuting, by filing for an HK listing
In the placement space, Star Entertainment Group (SGR AU) was back in the market again, while Zhejiang Leapmotor Technologie (9863 HK) and DPC Dash (1405 HK) came of lock-ups.


ECM Weekly (1st Oct 2023) - Cainiao, J&T, Kokusai, Seoul Guarantee, Ecopro, Leapmotor, Bajaj Finance

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Bottom-Up

<ul>
<li>4Paradigm, a self-developed AI platform and scenario-specific AI applications provider, has completed an IPO and raised net proceeds of ~HK$836M, excluding the over-allotment option. </li>
<li>Founder-Led AI unicorn priced its IPO at the bottom end of the range at <strong>HK$55.60 </strong><strong>per share</strong>. Cornerstone investors agreed to purchase ~13.6M H shares at the IPO price. </li>
<li>I like the company’s leadership position in China’s fastest-growing decision-making AI market, large TAM for their enterprise-grade generative AI offering SageGPT and top-tier VC investors. </li>
</ul>


4Paradigm, a self-developed AI platform and scenario-specific AI applications provider, has completed an IPO and raised net proceeds of ~HK$836M, excluding the over-allotment option. 
Founder-Led AI unicorn priced its IPO at the bottom end of the range at HK$55.60 per share. Cornerstone investors agreed to purchase ~13.6M H shares at the IPO price. 
I like the company’s leadership position in China’s fastest-growing decision-making AI market, large TAM for their enterprise-grade generative AI offering SageGPT and top-tier VC investors. 


4Paradigm: Fears About The Entity List Are Exaggerated, Bullish On AI and SageGPT, PT: HK$86

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

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.

<ul>
<li>4Paradigm has priced its IPO at HK$55.60 per share, at the bottom end of the indicative IPO price range of HK$55.6-61.16 per share and raised net proceeds of HK$835.5m.</li>
<li>The HK offering and the international offering of the company were oversubscribed by 11.4x and 1.57x respectively implying very moderate demand for the company’s shares.</li>
<li>Though priced at the bottom of the indicative IPO price range, our analysis suggests that 4Paradigm’s IPO is still expensive.</li>
</ul>


4Paradigm has priced its IPO at HK$55.60 per share, at the bottom end of the indicative IPO price range of HK$55.6-61.16 per share and raised net proceeds of HK$835.5m.
The HK offering and the international offering of the company were oversubscribed by 11.4x and 1.57x respectively implying very moderate demand for the company’s shares.
Though priced at the bottom of the indicative IPO price range, our analysis suggests that 4Paradigm’s IPO is still expensive.


4Paradigm IPO: Thoughts on First Day Trading

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

<ul>
<li>
<a href="https://www.smartkarma.com/entities/4paradigm" target="_blank" data-smartkarma-citation="entities:34465:1" rel="noopener">4Paradigm (6682 HK)</a> raised around US$131m in its Hong Kong IPO. </li>
<li>4P is a platform-centric AI enterprise solutions provider. It was the largest player by revenue in the platform-centric decision-making AI market in China in 2022, as per CIC. </li>
<li>We have covered various aspects of the deal in our previous notes. In this note, we will talk about the demand and trading dynamics.</li>
</ul>



4Paradigm (6682 HK) raised around US$131m in its Hong Kong IPO. 
4P is a platform-centric AI enterprise solutions provider. It was the largest player by revenue in the platform-centric decision-making AI market in China in 2022, as per CIC. 
We have covered various aspects of the deal in our previous notes. In this note, we will talk about the demand and trading dynamics.


4Paradigm IPO Trading - Low Insti Subscription and Small Float

China

Beijing 4Paradigm Technology Co. Ltd. operates as an artificial intelligence technology service provider. The Company provides model self-learning, data cleaning free, interpreted complex model, human computer cooperation, and other services. Beijing 4Paradigm Technology applies its technology in financial, government, energy, manufacturing, retail, medical, and other fields.

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4Paradigm (6682 HK)

Hang Seng Internet & IT Index Rebalance Preview: ZX Inc Could Replace Flowing Cloud

ZX Inc could replace Flowing Cloud in the HSIII in March. Fourth Paradigm could just miss out on index inclusion. Estimated one-way turnover is...

Brian Freitas

ECM Weekly (1st Oct 2023) - Cainiao, J&T, Kokusai, Seoul Guarantee, Ecopro, Leapmotor, Bajaj Finance

Aequitas Reserach puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

4Paradigm: Fears About The Entity List Are Exaggerated, Bullish On AI and SageGPT, PT: HK$86

4Paradigm, a Beijing-based enterprise AI software company, has completed its IPO in Hong Kong. I maintain a bullish view of the stock, and my PT of...

Andrei Zakharov

4Paradigm IPO: Thoughts on First Day Trading

4Paradigm has priced its IPO at HK$55.60 per share, at the bottom end of the price range. The company's IPO was moderately oversubscribed but...

Shifara Samsudeen, FCMA, CGMA

4Paradigm IPO Trading - Low Insti Subscription and Small Float

4Paradigm (6682 HK) raised around US$131m in its Hong Kong IPO. We have covered various aspects of the deal in our previous notes. In this note, we...

Ethan Aw

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Hang Seng Internet & IT Index Rebalance Preview: ZX Inc Could Replace Flowing Cloud

ZX Inc could replace Flowing Cloud in the HSIII in March. Fourth Paradigm could just miss out on index inclusion. Estimated one-way turnover is...

Brian Freitas

ECM Weekly (1st Oct 2023) - Cainiao, J&T, Kokusai, Seoul Guarantee, Ecopro, Leapmotor, Bajaj Finance

Aequitas Reserach puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

4Paradigm: Fears About The Entity List Are Exaggerated, Bullish On AI and SageGPT, PT: HK$86

4Paradigm, a Beijing-based enterprise AI software company, has completed its IPO in Hong Kong. I maintain a bullish view of the stock, and my PT of...

Andrei Zakharov

4Paradigm IPO: Thoughts on First Day Trading

​4Paradigm has priced its IPO at HK$55.60 per share, at the bottom end of the price range. The company's IPO was moderately oversubscribed but...

Shifara Samsudeen, FCMA, CGMA

4Paradigm IPO Trading - Low Insti Subscription and Small Float

4Paradigm (6682 HK) raised around US$131m in its Hong Kong IPO. We have covered various aspects of the deal in our previous notes. In this note, we...

Ethan Aw

4Paradigm has priced its IPO at HK$55.60 per share, at the bottom end of the price range. The company's IPO was moderately oversubscribed but...