Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.</li>
<li>In this insight, we take a look at the flow expectations for the June 2025 index rebal event.</li>
<li>We expect no index changes for June 2025 but we estimate there to be US$1.53bn in one-way flows which translates to a turnover of 7.4%.</li>
</ul>


The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
In this insight, we take a look at the flow expectations for the June 2025 index rebal event.
We expect no index changes for June 2025 but we estimate there to be US$1.53bn in one-way flows which translates to a turnover of 7.4%.


Quiddity Leaderboard HSTECH Jun25: US$1.5bn One-Way; Large Inflow for Net Ease

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>The US's CBP published an updated guidance on 11 Apr to exempt 20 product categories (incl. smartphones, PCs, servers and tablets) from reciprocal tariffs (i.e. 125% China tariff and 10% global tariff).</li><li>However, the US commerce secretary stated on 13 Apr (link) that tariff exemptions for electronic devices were temporary and electronics will come under separate tariffs, along with semiconductors that will be imposed in a month or two.</li><li>Overall, while the upcoming electronics tariff remains an overhang in the near term, we believe 1) the new tariff (vs. 25% for other sectoral tariffs) will be lower than the 125% for China’s previous reciprocal tariff, and 2) recent sector correction has priced in the worst scenario for reciprocal tariffs. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The US's CBP published an updated guidance on 11 Apr to exempt 20 product categories (incl. smartphones, PCs, servers and tablets) from reciprocal tariffs (i.e. 125% China tariff and 10% global tariff).However, the US commerce secretary stated on 13 Apr (link) that tariff exemptions for electronic devices were temporary and electronics will come under separate tariffs, along with semiconductors that will be imposed in a month or two.Overall, while the upcoming electronics tariff remains an overhang in the near term, we believe 1) the new tariff (vs. 25% for other sectoral tariffs) will be lower than the 125% for China’s previous reciprocal tariff, and 2) recent sector correction has priced in the worst scenario for reciprocal tariffs. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Technology - US Tariff Updates: Reciprocal Tariff Exemptions for Smartphone /PC...

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lenovo-group-ltd" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a>, <a href="https://www.smartkarma.com/entities/aac-technologies-holdings-inc" target="_blank" data-smartkarma-citation="entities:6544:1" rel="noopener">AAC Technologies Holdings (2018 HK)</a>, <a href="https://www.smartkarma.com/entities/byd-electronic-international-co-ltd" target="_blank" data-smartkarma-citation="entities:1927:1" rel="noopener">BYD Electronics (285 HK)</a>, and <a href="https://www.smartkarma.com/entities/tcl-multimedia-technology" target="_blank" data-smartkarma-citation="entities:15654:1" rel="noopener">Tcl Multimedia Technology (1070 HK)</a> are the prime beneficiaries of Trump's tariff exemption.</li>
<li>On average, they have 24.5% of revenue from the US market, and their share price has collapsed 19.8% MTD. They are well set to have a decent rebound.</li>
<li>There will be speculations that more exemptions in other sectors will be granted, and the big losers will see a relief rally. </li>
</ul>



Lenovo (992 HK), AAC Technologies Holdings (2018 HK), BYD Electronics (285 HK), and Tcl Multimedia Technology (1070 HK) are the prime beneficiaries of Trump's tariff exemption.
On average, they have 24.5% of revenue from the US market, and their share price has collapsed 19.8% MTD. They are well set to have a decent rebound.
There will be speculations that more exemptions in other sectors will be granted, and the big losers will see a relief rally. 


China & HK Strategy: Tariff Exemption Beneficiaries

Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

<ul>
<li>In today's Morning Views publication we comment on developments of the following high yield issuers: Meituan, China Jinmao, Lenovo, AAC Technologies, China Hongqiao</li>
<li>US President Donald Trump has announced on Truth Social a 90-day pause on reciprocal tariffs for more than 75 countries, with these countries to be charged a “substantially lowered reciprocal tariff” of 10% during this transition.</li>
<li>That said, Mr Trump raised tariffs on China to 125% (from 104%), after China raised its own tariffs on US imports to 84% (from 34%) in a retaliatory move earlier yesterday.</li>
</ul>


In today's Morning Views publication we comment on developments of the following high yield issuers: Meituan, China Jinmao, Lenovo, AAC Technologies, China Hongqiao
US President Donald Trump has announced on Truth Social a 90-day pause on reciprocal tariffs for more than 75 countries, with these countries to be charged a “substantially lowered reciprocal tariff” of 10% during this transition.
That said, Mr Trump raised tariffs on China to 125% (from 104%), after China raised its own tariffs on US imports to 84% (from 34%) in a retaliatory move earlier yesterday.


<ul><li>Following our note last week, we received investor questions focused on 1) “20% US content rule” exemptions, 2) impact of China 34% tariff' on the US, 3) Vietnam proposed 0% tariff, 4) de-minimis rule removal, 5) bottom-fishing opportunities, and 6) company feedback/response on the new tariff. Below we offer perspectives on investor FAQs regarding the implications.</li><li>Despite sector valuation still being 15-20% away from the historical trough now, we would start to look for some quality names to accumulate on further weakness, including Xiaomi, AAC, Sunny Optical, BYDE and Q-tech.</li><li>“20% US content rule” exemptions in “Annex III” sub-document? The US White House published a sub-document, Annex II, for the US Reciprocal Tariffs.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Following our note last week, we received investor questions focused on 1) “20% US content rule” exemptions, 2) impact of China 34% tariff' on the US, 3) Vietnam proposed 0% tariff, 4) de-minimis rule removal, 5) bottom-fishing opportunities, and 6) company feedback/response on the new tariff. Below we offer perspectives on investor FAQs regarding the implications.Despite sector valuation still being 15-20% away from the historical trough now, we would start to look for some quality names to accumulate on further weakness, including Xiaomi, AAC, Sunny Optical, BYDE and Q-tech.“20% US content rule” exemptions in “Annex III” sub-document? The US White House published a sub-document, Annex II, for the US Reciprocal Tariffs.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Technology - US Tariff Updates: Addressing FAQs After a Volatile Day

China

AAC Technologies Holdings Inc designs, develops and manufactures a broad range of miniaturized components that include speakers, receivers and microphones in the acoustic segment and others such as haptics vibrators, RF and antennas, and optical lenses. AAC's products are found in mobile devices such as smartphones, tablets, wearables, ultrabooks, notebooks and electronic book-readers.

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AAC Technologies Holdings (2018 HK)

Quiddity Leaderboard HSTECH Jun25: US$1.5bn One-Way; Large Inflow for Net Ease

Collectively, we expect more than US$1bn index inflows for NetEase (9999 HK), Baidu (9888 HK), Trip.com Group (9961 HK), and NIO (9866 HK) from...

Janaghan Jeyakumar, CFA

Technology - US Tariff Updates: Reciprocal Tariff Exemptions for Smartphone /PC...

The US's CBP published an updated guidance on 11 Apr to exempt 20 product categories (incl. smartphones, PCs, servers and tablets) from reciprocal...

CMB International

China & HK Strategy: Tariff Exemption Beneficiaries

Lenovo, AAC Technologies, BYD Electronics, and Tcl Multimedia are set to benefit from Trump's tariff exemption, with potential for a rebound in...

Osbert Tang, CFA

Lucror Analytics - Morning Views Asia

In today's Morning Views publication we comment on developments of the following high yield issuers: Meituan, China Jinmao, Lenovo, AAC...

Lucror Analytics

Technology - US Tariff Updates: Addressing FAQs After a Volatile Day

Following our note last week, we received investor questions focused on 1) “20% US content rule” exemptions, 2) impact of China 34% tariff' on the...

CMB International

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Quiddity Leaderboard HSTECH Jun25: US$1.5bn One-Way; Large Inflow for Net Ease

Collectively, we expect more than US$1bn index inflows for NetEase (9999 HK), Baidu (9888 HK), Trip.com Group (9961 HK), and NIO (9866 HK) from...

Janaghan Jeyakumar, CFA

Technology - US Tariff Updates: Reciprocal Tariff Exemptions for Smartphone /PC...

The US's CBP published an updated guidance on 11 Apr to exempt 20 product categories (incl. smartphones, PCs, servers and tablets) from reciprocal...

CMB International

China & HK Strategy: Tariff Exemption Beneficiaries

​Lenovo, AAC Technologies, BYD Electronics, and Tcl Multimedia are set to benefit from Trump's tariff exemption, with potential for a rebound in...

Osbert Tang, CFA

Lucror Analytics - Morning Views Asia

In today's Morning Views publication we comment on developments of the following high yield issuers: Meituan, China Jinmao, Lenovo, AAC...

Lucror Analytics

Technology - US Tariff Updates: Addressing FAQs After a Volatile Day

Following our note last week, we received investor questions focused on 1) “20% US content rule” exemptions, 2) impact of China 34% tariff' on the...

CMB International

Lenovo, AAC Technologies, BYD Electronics, and Tcl Multimedia are set to benefit from Trump's tariff exemption, with potential for a rebound in...