Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

China Resources Pharmaceutical / Index Rebalance

<ul>
<li>In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes for the Hang Seng Index in September 2024.</li>
<li>The index changes for the September 2024 index rebal will be announced on 16th August 2024.</li>
<li>The HSI selection process is highly subjective and does not follow clear-cut rules. This insight is simply an attempt to provide readers with an overall understanding of the possible scenarios.</li>
</ul>


In this insight, we take a look at a group of names with reasonably high likelihood of being involved in index changes for the Hang Seng Index in September 2024.
The index changes for the September 2024 index rebal will be announced on 16th August 2024.
The HSI selection process is highly subjective and does not follow clear-cut rules. This insight is simply an attempt to provide readers with an overall understanding of the possible scenarios.


Quiddity Leaderboard for Hang Seng Index Sep 24: New Economy? Clean Energy? or Shipping?

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.

Thematic (Sector/Industry)

<ul><li>Apple reported 3QFY24 (2QCY24) revenue of US$85.78bn (+5% YoY) and EPS of US$1.40 (+11% YoY), which are 2% and 3% above Bloomberg consensus, thanks to strong iPad sales (+24%), record services revenue (+14%), and record sales in Americas, Europe, and the rest of APAC offsetting China weakness.</li><li>For 4QFY24E, mgmt. expected revenue to grow at a similar pace (+5% YoY) as fiscal 3Q, and service revenue to grow double digits at a similar rate (+10-14%) as the previous three quarters.</li><li>With the upcoming launch of Apple Intelligence/iOS18 in fall, we expect AI features and product upgrades to boost replacement cycle of iPhone 16 in 2H24E. </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.

Apple reported 3QFY24 (2QCY24) revenue of US$85.78bn (+5% YoY) and EPS of US$1.40 (+11% YoY), which are 2% and 3% above Bloomberg consensus, thanks to strong iPad sales (+24%), record services revenue (+14%), and record sales in Americas, Europe, and the rest of APAC offsetting China weakness.For 4QFY24E, mgmt. expected revenue to grow at a similar pace (+5% YoY) as fiscal 3Q, and service revenue to grow double digits at a similar rate (+10-14%) as the previous three quarters.With the upcoming launch of Apple Intelligence/iOS18 in fall, we expect AI features and product upgrades to boost replacement cycle of iPhone 16 in 2H24E. 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.

Technology - Apple 3QFY24 Beat on Strong IPad and Services

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ola-electric-mobility-pvt-ltd" target="_blank" data-smartkarma-citation="entities:40618:1" rel="noopener">Ola Electric</a> is now looking to raise about US$730m in its upcoming India IPO.</li>
<li>Ola Electric Mobility is a vertically integrated pure EV player in India with manufacturing capabilities for EVs and EV components, including cells.</li>
<li>In our previous notes, we looked at the company’s performance, undertook a peer comparison and talked about valuations. In this note, we look at the updates from its recent filings.</li>
</ul>



Ola Electric is now looking to raise about US$730m in its upcoming India IPO.
Ola Electric Mobility is a vertically integrated pure EV player in India with manufacturing capabilities for EVs and EV components, including cells.
In our previous notes, we looked at the company’s performance, undertook a peer comparison and talked about valuations. In this note, we look at the updates from its recent filings.


Ola Electric IPO - RHP Updates - Growing Faster than Expected, Driven by GoI Policy

Equity Bottom-Up

<ul><li>BYDE will report 1H24 results in Aug. We estimate 1H24 revenue/NP growth of 32%/26% driven by iPad share gains, Android recovery, Jabil biz consolidation, stable NEV components sales and new intelligent product business.</li><li>For 2H24E/2025E, we are positive on iPad/iPhone upgrade cycle, Android high-end orders, automotive orders and AI servers to drive revenue growth.</li><li>We cut FY24-26E EPS by 6% to mainly factor in a weaker GPM. Our FY24-26E EPS estimates are 1- 9% above consensus.</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.

BYDE will report 1H24 results in Aug. We estimate 1H24 revenue/NP growth of 32%/26% driven by iPad share gains, Android recovery, Jabil biz consolidation, stable NEV components sales and new intelligent product business.For 2H24E/2025E, we are positive on iPad/iPhone upgrade cycle, Android high-end orders, automotive orders and AI servers to drive revenue growth.We cut FY24-26E EPS by 6% to mainly factor in a weaker GPM. Our FY24-26E EPS estimates are 1- 9% above consensus.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.

BYDE (285 HK) - Expect Solid Growth on IPad/ IPhone Cycle, Android Recovery and NEV Orders

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>Low volatility investing has taken the mantle from Dividend yield as the top strategy during July</li>
<li><a href="https://www.smartkarma.com/entities/byd-electronic-international-co-ltd" target="_blank" data-smartkarma-citation="entities:1927:1" rel="noopener">BYD Electronics (285 HK)</a> and <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> are rated BUYs as their businesses show improvement.  </li>
<li>
<a href="https://www.smartkarma.com/entities/kingdee-international-sftwr" target="_blank" data-smartkarma-citation="entities:37:1" rel="noopener">Kingdee International Software (268 HK)</a> is seeing a softening in its SME business, however there is  potential to gain market share from foreign ERP companies given the pledged government's policies.
</li>
</ul>


Low volatility investing has taken the mantle from Dividend yield as the top strategy during July
BYD Electronics (285 HK) and Alibaba Group Holding (9988 HK) are rated BUYs as their businesses show improvement.  

Kingdee International Software (268 HK) is seeing a softening in its SME business, however there is  potential to gain market share from foreign ERP companies given the pledged government's policies.



BUY/SELL/HOLD: Hong Kong Stock Updates (July 29)

China

BYD Electronic International Co., Ltd. researches, develops, manufactures handset components such as handset casings and handset keypads and modules for handset manufacturers.  The Company also provides assembly services comprising assembly service and PCB assembly service to global handset manufacturers.

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BYD Electronics (285 HK)

Quiddity Leaderboard for Hang Seng Index Sep 24: New Economy? Clean Energy? or Shipping?

The index changes for the Hang Seng Index for September 2024 will be announced after market close on Friday 16th August 2024. In this insight, I...

Janaghan Jeyakumar, CFA

Technology - Apple 3QFY24 Beat on Strong IPad and Services

Apple reported 3QFY24 (2QCY24) revenue of US$85.78bn (+5% YoY) and EPS of US$1.40 (+11% YoY), which are 2% and 3% above Bloomberg consensus

CMB International

Ola Electric IPO - RHP Updates - Growing Faster than Expected, Driven by GoI Policy

Ola Electric is now looking to raise about US$730m in its upcoming India IPO. In this note, we look at the updates from its most recent filings.

Sumeet Singh

BYDE (285 HK) - Expect Solid Growth on IPad/ IPhone Cycle, Android Recovery and NEV Orders

We estimate 1H24 revenue/NP growth of 32%/26% driven by iPad share gains, Android recovery, Jabil biz consolidation, stable NEV components sales...

CMB International

BUY/SELL/HOLD: Hong Kong Stock Updates (July 29)

Low volatility investing is performing well in July. BYD Electronics has seen better Apple related and NEV sales and Alibaba is increasing some...

David Mudd

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