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

<ul>
<li>One third of the way through the review period, we forecast 10 changes for the <a href="https://www.smartkarma.com/entities/chinext-index" target="_blank" data-smartkarma-citation="entities:25483:1" rel="noopener">ChiNext Index (SZ399006 INDEX EQUITY)</a> and 5 changes for the ChiNext 50 Index in December.</li>
<li>Passive trackers are estimated to trade around +/-0.5 days ADV on most of the potential adds/deletes, though there are some deletes that will have over 1 day ADV to sell.</li>
<li>The potential inclusion to one or both indices have outperformed the potential deletes by a huge margin in the 5 months. We'd wait for a pullback to re-enter positions.</li>
</ul>


One third of the way through the review period, we forecast 10 changes for the ChiNext Index (SZ399006 INDEX EQUITY) and 5 changes for the ChiNext 50 Index in December.
Passive trackers are estimated to trade around +/-0.5 days ADV on most of the potential adds/deletes, though there are some deletes that will have over 1 day ADV to sell.
The potential inclusion to one or both indices have outperformed the potential deletes by a huge margin in the 5 months. We'd wait for a pullback to re-enter positions.


ChiNext/​​​ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance

Hunan Zhongke Electric Co,Ltd. / Index Rebalance

<ul>
<li>There will be 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</a> and 5 changes for the ChiNext 50 Index. Implementation is at the close on 9 December.</li>
<li>One surprise is the inclusion of <a href="https://www.smartkarma.com/entities/hunan-zhongke-electric-co-ltd" target="_blank" data-smartkarma-citation="entities:13009:1" rel="noopener">Hunan Zhongke Electric Co,Ltd. (300035 CH)</a> in both indices. Four stocks are adds to both indices while two stocks are deletes from both indices.</li>
<li>The adds have outperformed the deletes over the last 8 months but have given up some of the gains over the last month. There is a big sector skew.</li>
</ul>


There will be 10 changes for the Chinext Price Index and 5 changes for the ChiNext 50 Index. Implementation is at the close on 9 December.
One surprise is the inclusion of Hunan Zhongke Electric Co,Ltd. (300035 CH) in both indices. Four stocks are adds to both indices while two stocks are deletes from both indices.
The adds have outperformed the deletes over the last 8 months but have given up some of the gains over the last month. There is a big sector skew.


ChiNext/​ChiNext 50 Index Rebalance: Materials & Industrials Take Spots from IT, Health Care

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

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Upside momentum continues to wane for global equities. Price action this week has indeed confirmed lower highs for now in the MSCI ACWI, ACWI ex-US, EAFE, and EM indexes. These lower highs increase the probability for breakdowns and a deeper pullback, but we do not want to get ahead of ourselves. Until we see breakdowns we still view global equities as being in a period of consolidation. We outline important technical levels across markets and highlight actionable set ups within Technology, Health care and Staples.

Upside momentum continues to wane for global equities. Price action this week has indeed confirmed lower highs for now in the MSCI ACWI, ACWI ex-US, EAFE, and EM indexes. These lower highs increase the probability for breakdowns and a deeper pullback, but we do not want to get ahead of ourselves. Until we see breakdowns we still view global equities as being in a period of consolidation. We outline important technical levels across markets and highlight actionable set ups within Technology, Health care and Staples.

Global Equity Strategy: Stay Defensive With Technology, Health Care, Staples

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.

Bluefocus Communication Group Co, Ltd. (300058 CH)

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Bluefocus Communication Group Co, Ltd. (300058 CH)

ChiNext/ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance

There are many overlapping changes for the Chinext and Chinext50 indices. The potential adds have outperformed the potential deletes and flow could...

Brian Freitas

ChiNext/ChiNext 50 Index Rebalance: Materials & Industrials Take Spots from IT, Health Care

10 changes for Chinext and 5 for Chinext 50. Most changes were expected and there is a big sector skew. One surprise is the inclusion of Hunan...

Brian Freitas

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

Global Equity Strategy: Stay Defensive With Technology, Health Care, Staples

Upside momentum continues to wane for global equities. Price action this week has indeed confirmed lower highs for now in the MSCI ACWI, ACWI...

Vermilion Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

ChiNext/​​​ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance

There are many overlapping changes for the Chinext and Chinext50 indices. The potential adds have outperformed the potential deletes and flow could...

Brian Freitas

ChiNext/​ChiNext 50 Index Rebalance: Materials & Industrials Take Spots from IT, Health Care

10 changes for Chinext and 5 for Chinext 50. Most changes were expected and there is a big sector skew. One surprise is the inclusion of Hunan...

Brian Freitas

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

Global Equity Strategy: Stay Defensive With Technology, Health Care, Staples

Upside momentum continues to wane for global equities. Price action this week has indeed confirmed lower highs for now in the MSCI ACWI, ACWI...

Vermilion Research

ChiNext/ChiNext50 Index Rebalance Preview: Potential Changes & Basket Performance

ChiNext/ChiNext 50 Index Rebalance: Materials & Industrials Take Spots from IT, Health Care