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

DZT Research

DZT 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 analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of September 9th.</li>
<li>We estimate the weekly outflows to be US$32.0 million, led by consumer staples, information technology, and offset by materials, health care, financials.</li>
<li>We highlight inflows into Longi Green, Zijin, Aier Eye, and outflows from Moutai, CMB, Tongwei, Luxshare. </li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of September 9th.
We estimate the weekly outflows to be US$32.0 million, led by consumer staples, information technology, and offset by materials, health care, financials.
We highlight inflows into Longi Green, Zijin, Aier Eye, and outflows from Moutai, CMB, Tongwei, Luxshare. 


Northbound Flows (Sep 9th): Longi Green, Zijin, Aier Eye, Moutai, CMB, Tongwei, Luxshare

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.</li>
<li>Overall, net outflow over the past week was ~US$1.28bn, split between Shanghai (-US$0.85bn) and Shenzhen (-US$0.43bn)</li>
<li>The largest inflows were into <a href="https://www.smartkarma.com/entities/aier-eye-hospital-group-co-ltd" target="_blank" data-smartkarma-citation="entities:1103:1" rel="noopener">Aier Eye Hospital (300015 CH)</a> and <a href="https://www.smartkarma.com/entities/shenzhen-mindray-bio-medic-a" target="_blank" data-smartkarma-citation="entities:28017:1" rel="noopener">Shenzhen Mindray  (300760 CH)</a>. The largest outflows were in <a href="https://www.smartkarma.com/entities/china-merchants-bank-co-ltd" target="_blank" data-smartkarma-citation="entities:714:1" rel="noopener">China Merchants Bank (600036 CH)</a> and <a href="https://www.smartkarma.com/entities/sungrow-power-supply-co-ltd" target="_blank" data-smartkarma-citation="entities:4255:1" rel="noopener">Sungrow Power (300274 CH)</a>.</li>
</ul>


Inside is a recap of movements in the last week relating to the Hong Kong Stock Exchange -Shanghai and Shenzhen Northbound Connect facilities, broken down by company and industry.
Overall, net outflow over the past week was ~US$1.28bn, split between Shanghai (-US$0.85bn) and Shenzhen (-US$0.43bn)
The largest inflows were into Aier Eye Hospital (300015 CH) and Shenzhen Mindray  (300760 CH). The largest outflows were in China Merchants Bank (600036 CH) and Sungrow Power (300274 CH).


Shanghai/​​​​​​​​Shenzhen Northbound Connect: Weekly Moves (15 July 2022)

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gaush-meditech-ltd" target="_blank" data-smartkarma-citation="entities:35250:1" rel="noopener">Gaush Meditech (GMT HK)</a> is a leading total solution provider of ophthalmic medical devices industry.</li>
<li>The irreplaceability of Gaush in the whole industrial chain is actually not high based on its current business model.The proprietary product business may also need to face different policy risks.</li>
<li>Together with other uncertainties such as increasing market competition and medical reform policy in China, we are conservative about Gaush’s outlook at the current stage.  </li>
</ul>



Gaush Meditech (GMT HK) is a leading total solution provider of ophthalmic medical devices industry.
The irreplaceability of Gaush in the whole industrial chain is actually not high based on its current business model.The proprietary product business may also need to face different policy risks.
Together with other uncertainties such as increasing market competition and medical reform policy in China, we are conservative about Gaush’s outlook at the current stage.  


Pre-IPO Gaush Meditech - The "Middlemen" Have Many Challenges

Equity Bottom-Up

Aier Eye Hospital Group / Equity Bottom-Up

<ul>
<li>Aier's private placement was approved by the Shenzhen Stock Exchange, but we don’t think it signals a complete policy shift that private medical institutions are welcomed by capital markets.</li>
<li>The high goodwill impairment risk and medical disputes are great concerns. However, if Aier changes its development mode, its performance growth would probably slow down or becomes uncertain.</li>
<li>Aier’s Q2 performance could be affected by pandemic/lockdown. Even after continuous corrections, Aier is still overvalued based on current valuation, which has not priced in all the concerns and risks.</li>
</ul>


Aier's private placement was approved by the Shenzhen Stock Exchange, but we don’t think it signals a complete policy shift that private medical institutions are welcomed by capital markets.
The high goodwill impairment risk and medical disputes are great concerns. However, if Aier changes its development mode, its performance growth would probably slow down or becomes uncertain.
Aier’s Q2 performance could be affected by pandemic/lockdown. Even after continuous corrections, Aier is still overvalued based on current valuation, which has not priced in all the concerns and risks.


Aier Eye Hospital Group (300015.CH) 2021/2022Q1 Results - Overvaluation and a Risky Outlook

<ul>
<li>Driven by the development mode of "organic growth + strategic acquisitions + cooperation with hospital partners", <a href="https://www.smartkarma.com/entities/hygeia-healthcare-group" target="_blank" data-smartkarma-citation="entities:28875:1" rel="noopener">Hygeia Healthcare Group (6078 HK)</a> could rapidly expand nationwide, with solid business logic. </li>
<li>Hygeia's delicacy management and the strength in operation help the Company to break the limits of the expansion of private hospitals, helping shorten the time it takes to break even.</li>
<li>However, the high uncertainties on policy and State’s attitude towards private hospitals cast shadow on Hygeia's long-term prospects, but investors could still trade this stock in short term.</li>
</ul>


Driven by the development mode of "organic growth + strategic acquisitions + cooperation with hospital partners", Hygeia Healthcare Group (6078 HK) could rapidly expand nationwide, with solid business logic. 
Hygeia's delicacy management and the strength in operation help the Company to break the limits of the expansion of private hospitals, helping shorten the time it takes to break even.
However, the high uncertainties on policy and State’s attitude towards private hospitals cast shadow on Hygeia's long-term prospects, but investors could still trade this stock in short term.


Hygeia Healthcare Group (6078.HK) 2021 Results - Solid Business Logic Comes with Policy Risk

China

Aier Eye Hospital Group Co., Ltd provides ophthalmological services.  The Company's services include ophthalmological diagnosis and treatments.

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Aier Eye Hospital Group (300015 CH)

Northbound Flows (Sep 9th): Longi Green, Zijin, Aier Eye, Moutai, CMB, Tongwei, Luxshare

We analyzed Northbound Shanghai/Shenzhen flows last week and highlight inflows into Longi Green, Zijin, Aier Eye, and outflows from Moutai, CMB,...

Ke Yan, CFA, FRM

Shanghai/Shenzhen Northbound Connect: Weekly Moves (15 July 2022)

Overall, net outflow over the past week in the HK -Shanghai-Shenzhen Northbound Connect facilities was ~US$1.28bn, split between Shanghai (...

David Blennerhassett

Pre-IPO Gaush Meditech - The "Middlemen" Have Many Challenges

The irreplaceability of Gaush in the whole industrial chain is not high based on its business model. Gaush's business has to face various policy...

Xinyao (Criss) Wang