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

Hubei Feilihua Quartz Glass  / Index Rebalance

<ul>
<li>At the end of the review period, we forecast 10 changes for the <a href="https://www.smartkarma.com/entities/chinext-price-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">Chinext Price Index (SZ399006 INDEX)</a> and 5 changes for the ChiNext 50 Index in December.</li>
<li>Passive trackers will need to buy +/-0.5 days of ADV for most inclusions and exclusions from the indices. The impact on the potential deletions is higher on average.</li>
<li>The potential adds have outperformed the potential deletes over the last six months, though there has been a sharp narrowing of the gap over the last few weeks.</li>
</ul>


At the end of the review period, we forecast 10 changes for the Chinext Price Index (SZ399006 INDEX) and 5 changes for the ChiNext 50 Index in December.
Passive trackers will need to buy +/-0.5 days of ADV for most inclusions and exclusions from the indices. The impact on the potential deletions is higher on average.
The potential adds have outperformed the potential deletes over the last six months, though there has been a sharp narrowing of the gap over the last few weeks.


ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion

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.

Equity Capital Markets

Medlive Technology / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/medlive-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:32985:1" rel="noopener">Medlive Technology (2192 HK)</a>  has announced the terms for its Hong Kong IPO where it plans to issue 155.1m shares at an indicative price range of HK$24.1-27.2 per share. At the midpoint of the IPO price range of HK$25.65 per share, Medlive will raise net proceeds of HK$3.8bn (US$485.3m) at a market capitalisation of HK$17.7bn and a post-money enterprise value of HK$13.8bn.<table class="table table-striped"><tbody>
<tr><td colspan="2" style="width: 308.0pt;">Medlive Technology IPO Details</td></tr>
<tr>
<td style="width: 241.0pt;">No. of Shares Issued</td>
<td style="width: 67.0pt;">     155,096,000</td>
</tr>
<tr>
<td style="width: 241.0pt;">Price per Share (HK$)</td>
<td style="width: 67.0pt;">24.1-27.2</td>
</tr>
<tr>
<td style="width: 241.0pt;">Offer as a % of Outstanding Shares</td>
<td style="width: 67.0pt;">22.47%</td>
</tr>
<tr>
<td style="width: 241.0pt;">Total Shares Outstanding (m)</td>
<td style="width: 67.0pt;">690.2</td>
</tr>
<tr>
<td style="width: 241.0pt;">Net Proceeds (HK$m)</td>
<td style="width: 67.0pt;">3770.8</td>
</tr>
<tr>
<td style="width: 241.0pt;">Market Capitalisation (HK$m)</td>
<td style="width: 67.0pt;">            17,703.0</td>
</tr>
<tr>
<td style="width: 241.0pt;">Enterprise Value (HK$m)</td>
<td style="width: 67.0pt;">          13,755.41</td>
</tr>
</tbody></table><div style="text-align: left;" class="content-caption">Source: Company disclosures, LSR (net proceeds, market cap and EV are at the midpoint of the IPO price range)</div>Medlive has entered into cornerstone investment agreements with several investors for an aggregate of HK$1.7bn (US$220m) which will account for approx. 43% of the offer shares at the midpoint of the IPO pricing. These cornerstone investors include Fidelity Management &amp; Research (FMR/US$40m), Fidelity Investments (FIL/US$40m), Tencent Mobility (US$40m), GIC (US$40m), Matthew Funds (US$20m), Springhill (US$20m) and OrbiMed Funds (US$20m).Medlive plans to use approx. 40% of the net IPO proceeds on business expansion and user growth, approx. 30% of the proceeds on enhancing technological and R&amp;D capabilities and another 20% of the net proceeds on pursuing selected strategic investments or acquisition opportunities.

Medlive Technology (2192 HK)  has announced the terms for its Hong Kong IPO where it plans to issue 155.1m shares at an indicative price range of HK$24.1-27.2 per share. At the midpoint of the IPO price range of HK$25.65 per share, Medlive will raise net proceeds of HK$3.8bn (US$485.3m) at a market capitalisation of HK$17.7bn and a post-money enterprise value of HK$13.8bn.
Medlive Technology IPO Details

No. of Shares Issued
     155,096,000


Price per Share (HK$)
24.1-27.2


Offer as a % of Outstanding Shares
22.47%


Total Shares Outstanding (m)
690.2


Net Proceeds (HK$m)
3770.8


Market Capitalisation (HK$m)
            17,703.0


Enterprise Value (HK$m)
          13,755.41

Source: Company disclosures, LSR (net proceeds, market cap and EV are at the midpoint of the IPO price range)Medlive has entered into cornerstone investment agreements with several investors for an aggregate of HK$1.7bn (US$220m) which will account for approx. 43% of the offer shares at the midpoint of the IPO pricing. These cornerstone investors include Fidelity Management &amp; Research (FMR/US$40m), Fidelity Investments (FIL/US$40m), Tencent Mobility (US$40m), GIC (US$40m), Matthew Funds (US$20m), Springhill (US$20m) and OrbiMed Funds (US$20m).Medlive plans to use approx. 40% of the net IPO proceeds on business expansion and user growth, approx. 30% of the proceeds on enhancing technological and R&amp;D capabilities and another 20% of the net proceeds on pursuing selected strategic investments or acquisition opportunities.

Medlive Technology IPO: Forecasts and Valuation

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

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.

Debt Capital Markets

Bluefocus Communication Group Co, Ltd. / Debt Capital Markets

Bluefocus Communication Group Co, Ltd. (300058 CH)

BlueFocus is conducting roadshows for a Reg S-only USD bond issuance. The company stated during the investor call that it aims to raise USD 300 mn. The proceeds will be used in this manner: (1) USD 100 mn to fund the Cogint acquisition; (2) USD 150 mn to refinance existing debt; and (3) USD 50 mn for general corporate purposes. The tenor is to be announced. BlueFocus is a leading marketing agency in China, providing public relations, marketing and advertising services. The company was among the Top 10 public relations firms worldwide in terms of revenue in 2016. We view BlueFocus as “High Risk” on the LARA scale. This reflects its: (1) leading market position in a fast-growing digital advertising industry; and (2) established client relationships, which allow the company to increase wallet share of their marketing budgets. These are balanced against BlueFocus': (1) declining profitability, as it shifts from traditional public relations services to the lower-margin digital segment; (2) modest financial metrics with high leverage; and (3) event risks from acquisitions and investments.  Assuming 5NC3 for pricing, we see fair value in the 7-7.5% range.

BlueFocus is conducting roadshows for a Reg S-only USD bond issuance. The company stated during the investor call that it aims to raise USD 300 mn. The proceeds will be used in this manner: (1) USD 100 mn to fund the Cogint acquisition; (2) USD 150 mn to refinance existing debt; and (3) USD 50 mn for general corporate purposes. The tenor is to be announced.  BlueFocus is a leading marketing agency in China, providing public relations, marketing and advertising services. The company was among the Top 10 public relations firms worldwide in terms of revenue in 2016.  We view BlueFocus as “High Risk” on the LARA scale. This reflects its: (1) leading market position in a fast-growing digital advertising industry; and (2) established client relationships, which allow the company to increase wallet share of their marketing budgets. These are balanced against BlueFocus': (1) declining profitability, as it shifts from traditional public relations services to the lower-margin digital segment; (2) modest financial metrics with high leverage; and (3) event risks from acquisitions and investments.   Assuming 5NC3 for pricing, we see fair value in the 7-7.5% range. 

Bluefocus Communication - New Issue Assessment - Lucror Analytics

China

BlueFocus Communication Group Co., Ltd. provides public relation services and brand management services for corporations.  The Company's services include brand promotion, product promotion, hazard management, function management, digital media sales, and social responsibilities services.

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Bluefocus Communication Group Co, Ltd. (300058 CH)

ChiNext/ChiNext50 Index Rebalance Preview: Overlapping Stocks & Mean Reversion

We forecast 10 changes to the ChiNext & 5 changes to the ChiNext50 in Dec. There are a few overlapping stocks and the potential adds have...

Brian Freitas

Medlive Technology IPO: Forecasts and Valuation

Based on our forecasts, Medlive’s indicative IPO pricing is still attractive even if we assume a discount rate of 12.0% and a 0% terminal growth...

Shifara Samsudeen, FCMA, CGMA

Bluefocus Communication - New Issue Assessment - Lucror Analytics

BlueFocus is conducting roadshows for a Reg S-only USD bond issuance. The company stated during the investor call that it aims to raise USD 300 mn....

Lucror Analytics

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