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 analyse the changes of A-H premium on 184 stocks over the last week. The average A-H premium was 76.8% as of May 29th.</li>
<li>The average A-H premium changed by 4.3ppt week-on-week, led by real estate, utilities, consumer staples.</li>
<li>We highlight weekly changes in A-H premium for Zhuzhou Crrc Times Electric, ZTE, China Minsheng Banking, Datang Power, Haier Smart Home, Huaneng Power Intl.</li>
</ul>


We analyse the changes of A-H premium on 184 stocks over the last week. The average A-H premium was 76.8% as of May 29th.
The average A-H premium changed by 4.3ppt week-on-week, led by real estate, utilities, consumer staples.
We highlight weekly changes in A-H premium for Zhuzhou Crrc Times Electric, ZTE, China Minsheng Banking, Datang Power, Haier Smart Home, Huaneng Power Intl.


A-H Premium Weekly (May 29th): Zhuzhou Crrc Times Electric, ZTE, China Minsheng Banking

Index Rebalance

<ul>
<li>We screen the HSCEI eligible universe for the upcoming May 2026 review.</li>
<li>Two exclusions and two inclusions, all rule-driven under the rank &gt; 60 / rank &lt;= 40 boundaries.</li>
<li>WuXi Bio is a mandatory top-40 add; Hansoh Pharma is the contingent buffer-zone fill.</li>
</ul>


We screen the HSCEI eligible universe for the upcoming May 2026 review.
Two exclusions and two inclusions, all rule-driven under the rank &gt; 60 / rank &lt;= 40 boundaries.
WuXi Bio is a mandatory top-40 add; Hansoh Pharma is the contingent buffer-zone fill.


Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

Thematic (Sector/Industry)

For the most part, China bank’s 1H18 profit growth YoY (and 2Q18 YoY) is from realized and unrealized trading gains, investment gains and fair value gains. The largest four banks are the only major exceptions due to significant low-cost deposits and expansive sticky customer base. From the commentary that we have heard on China banks’ 1H18 earnings, we do not believe the focus is on the underlying reality.  There are negative implications where earnings quality is worsening considerably, while at the same time, it is likely that 2H18 is fundamentally worse, thereby making putting further pressure on core income and profit growth.

For the most part, China bank’s 1H18 profit growth YoY (and 2Q18 YoY) is from realized and unrealized trading gains, investment gains and fair value gains. The largest four banks are the only major exceptions due to significant low-cost deposits and expansive sticky customer base. From the commentary that we have heard on China banks’ 1H18 earnings, we do not believe the focus is on the underlying reality.  There are negative implications where earnings quality is worsening considerably, while at the same time, it is likely that 2H18 is fundamentally worse, thereby making putting further pressure on core income and profit growth.

China Banks – Profit Growth Is Only From Securities Gains

Few of China’s banks have yet released full quarterly results, but two are <a href="https://www.smartkarma.com/entities/659" target="_blank" data-smartkarma-citation="entities:659:1">Bank Of Communications Co H (3328 HK;</a> BoCom) and <a href="https://www.smartkarma.com/entities/21033" target="_blank" data-smartkarma-citation="entities:21033:1">Bank Of Zhengzhou (6196 HK;</a> BOZ). A commonality in the numbers is severe weakness in core income, namely net interest income and net fee and commission income. Where we sometimes focus nearly exclusively on credit costs and credit risk, we should also remember that the ability to pay for these is critical.  Additionally, granular data on consumer credit costs at BoCom are of real concern, suggesting a gruesome weakening in the period.

Few of China’s banks have yet released full quarterly results, but two are Bank Of Communications Co H (3328 HK; BoCom) and Bank Of Zhengzhou (6196 HK; BOZ). A commonality in the numbers is severe weakness in core income, namely net interest income and net fee and commission income. Where we sometimes focus nearly exclusively on credit costs and credit risk, we should also remember that the ability to pay for these is critical.  Additionally, granular data on consumer credit costs at BoCom are of real concern, suggesting a gruesome weakening in the period.

China Banks – Core Income Frailty, Dramatic Consumer Segment Weakness In 2Q18

In December 2017, the International Monetary Fund (IMF) issued a 270-page report assessing China’s financial sector and specifically how the China Banking Regulatory Commission (CBRC) has fared in its observance of Basel core principles. It may not be coincidental that the China regulator(s) have become stricter during 2018. Two key shortcomings highlighted in the report are worth exploring further: special mention loans and interbank lending.  Many of China’s banks will see a surge in bad loans…

In December 2017, the International Monetary Fund (IMF) issued a 270-page report assessing China’s financial sector and specifically how the China Banking Regulatory Commission (CBRC) has fared in its observance of Basel core principles. It may not be coincidental that the China regulator(s) have become stricter during 2018. Two key shortcomings highlighted in the report are worth exploring further: special mention loans and interbank lending.  Many of China’s banks will see a surge in bad loans…

China Banks – Special Mention Loans and Bank Lending Under Fire from IMF

China

Bank of Communications is a Chinese multinational banking and financial services corporation. It offers a comprehensive range of services including corporate and personal banking, wealth management, investment banking, and international settlements. The bank was originally established in 1908 and is headquartered in Shanghai, China.

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Bank of Communications (3328 HK)

A-H Premium Weekly (May 29th): Zhuzhou Crrc Times Electric, ZTE, China Minsheng Banking

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Zhuzhou Crrc Times Electric, ZTE, China Minsheng Banking,...

Ke Yan, CFA, FRM

HSCEI May 2026 Index Review Forecast

HSCEI May 2026 rebalance announcement due after market close today: a good time to revisit our review forecast as the decision approaches.

Ke Yan, CFA, FRM

China Banks – Profit Growth Is Only From Securities Gains

For the most part, China bank’s 1H18 profit growth YoY (and 2Q18 YoY) is from realized and unrealized trading gains, investment gains and fair...

Daniel Tabbush

China Banks – Core Income Frailty, Dramatic Consumer Segment Weakness In 2Q18

Few of China’s banks have yet released full quarterly results, but two are Bank Of Communications Co H (3328 HK; BoCom) and Bank Of Zhengzhou (6196...

Daniel Tabbush

China Banks – Special Mention Loans and Bank Lending Under Fire from IMF

In December 2017, the International Monetary Fund (IMF) issued a 270-page report assessing China’s financial sector and specifically how the China...

Daniel Tabbush

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