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

Jiangsu Hengrui Pharmaceuticals / Index Rebalance

Jiangsu Hengrui Pharmaceuticals (1276 HK)

<ul>
<li>We see 21 potential and close adds and 34 potential and close deletes for the Hang Seng Composite Index in September. Some of the stocks are close on market cap/liquidity.</li>
<li>There have been some big listings in the last couple of months and those stocks should be added to the index in September. That increases the number of potential deletions.</li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


We see 21 potential and close adds and 34 potential and close deletes for the Hang Seng Composite Index in September. Some of the stocks are close on market cap/liquidity.
There have been some big listings in the last couple of months and those stocks should be added to the index in September. That increases the number of potential deletions.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September 2025

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.

Equity Bottom-Up

<ul><li>We hosted an investor call with BOEVx regarding the recent US reciprocal tariffs.</li><li>Overall, mgmt. believes there is limited impact on their financials given low US sales exposure.</li><li>Regionally, BOEVx is positive on Vietnam’s capacity ramp-up in 2025 and already received orders from the US and South Korean customers. </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.

We hosted an investor call with BOEVx regarding the recent US reciprocal tariffs.Overall, mgmt. believes there is limited impact on their financials given low US sales exposure.Regionally, BOEVx is positive on Vietnam’s capacity ramp-up in 2025 and already received orders from the US and South Korean customers. 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.

BOE Varitronix (710 HK) - Limited Impact from Tariff Given Low US Exposure

<ul><li>BOEVx posted strong FY24 sales growth of 25% YoY driven by automotive display (LTPS/Oxide/OLED), auto display system (intelligent/cockpit) and overseas market orders (US/Japan/Korea +47%/50%/24% YoY), but net profit missed mainly due to product mix shift, pricing pressure, higher inventory costs and less government grants.</li><li>Looking into 2025/26, as a global No.1 auto display supplier, BOEVx will focus on multiple growth drivers: 1) system product expansion (smart cockpit/AI); 2) high-end auto display ramp (LTPS/Oxide/OLED) backed by Chengdu capacity; 3) overseas order wins (esp. Europe, Japan, Korea), and 4) R&amp;D investment in AI/auto display technologies.</li><li>We trim FY25-26E EPS estimates by 8%/1% to reflect FY24 results and slower margin recovery. We believe BOEVx will continue to benefit from strong product pipeline and overseas expansion. Maintain BUY with new TP of HK$9.63.</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.

BOEVx posted strong FY24 sales growth of 25% YoY driven by automotive display (LTPS/Oxide/OLED), auto display system (intelligent/cockpit) and overseas market orders (US/Japan/Korea +47%/50%/24% YoY), but net profit missed mainly due to product mix shift, pricing pressure, higher inventory costs and less government grants.Looking into 2025/26, as a global No.1 auto display supplier, BOEVx will focus on multiple growth drivers: 1) system product expansion (smart cockpit/AI); 2) high-end auto display ramp (LTPS/Oxide/OLED) backed by Chengdu capacity; 3) overseas order wins (esp. Europe, Japan, Korea), and 4) R&amp;D investment in AI/auto display technologies.We trim FY25-26E EPS estimates by 8%/1% to reflect FY24 results and slower margin recovery. We believe BOEVx will continue to benefit from strong product pipeline and overseas expansion. Maintain BUY with new TP of HK$9.63.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.

BOE Varitronix (710 HK) - FY24 Strong Sales Dragged by Weaker Margin

<ul>
<li>We see 38 potential and close adds and 51 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.</li>
<li>There have been many new listings in the last weeks of December. Some of them are fairly large and will be added and that increases the number of potential deletions.</li>
<li>There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.</li>
</ul>


We see 38 potential and close adds and 51 potential and close deletes for the Hang Seng Composite Index in March. Some of the stocks are close on market cap/liquidity.
There have been many new listings in the last weeks of December. Some of them are fairly large and will be added and that increases the number of potential deletions.
There are stocks that have a very high percentage of holdings via Stock Connect and there could be some unwinding prior to the stocks becoming Sell-only.


HSCI Index Rebalance Preview and Stock Connect: Updated Potential Changes in March 2025

<ul><li>We hosted BOEVx at 4Q outlook investor call this week. Mgmt. is positive on demand recovery in both domestic and overseas markets as well as rapid growth in system business in 2H24E.</li><li>As for Chengdu plant, mgmt. guided UTR to improve to 70-80% in the near term (vs. 60-70% now) given larger orders and better sales in 2H24E.</li><li>As for overseas markets, mgmt. stated Japan/Korea/ Europe project wins are on track in FY25-26E and reiterated 50% overseas sales mix guidance in FY27E.</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.

We hosted BOEVx at 4Q outlook investor call this week. Mgmt. is positive on demand recovery in both domestic and overseas markets as well as rapid growth in system business in 2H24E.As for Chengdu plant, mgmt. guided UTR to improve to 70-80% in the near term (vs. 60-70% now) given larger orders and better sales in 2H24E.As for overseas markets, mgmt. stated Japan/Korea/ Europe project wins are on track in FY25-26E and reiterated 50% overseas sales mix guidance in FY27E.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.

BOE Varitronix (710 HK) - Chengdu Plant, System Biz and Overseas Market to Drive Growth

Hong Kong

BOE Varitronix is an investment holding company that designs, manufactures, and sells liquid crystal displays and related products. Its core business focuses on automotive display modules and industrial displays, including TFT products, touch panel display modules, and monochrome displays for applications such as automotive digital instrument clusters, white goods, and medical devices. The company was founded in 1978 and is headquartered in Kwun Tong, Hong Kong.

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BOE Varitronix (710 HK)

HSCI Index Rebalance Preview and Stock Connect: Potential Changes in September 2025

There could be 55 changes for the HSCI in September. That could result in 46 changes to the Southbound Stock Connect list and also have...

Brian Freitas