Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The HSI added <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 deleted <a href="https://www.smartkarma.com/entities/country-garden-services-holdin" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services (6098 HK)</a>. HSCEI added <a href="https://www.smartkarma.com/entities/zijin-mining-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:6358:1" rel="noopener">Zijin Mining Group Co Ltd H (2899 HK)</a> deleted <a href="https://www.smartkarma.com/entities/xinyi-solar-holdings-ltd" target="_blank" data-smartkarma-citation="entities:318:1" rel="noopener">Xinyi Solar Holdings (968 HK)</a> </li>
<li>HSTECH had no changes, but lots of flow. The index team sets capping levels, then resets them a three days before the actual rebalancing. There were some capping/recapping changes.</li>
<li>Below we offer tables showing all the changes and flows across the indices for each stock, ranked by Flows, ADV, and Ticker. And a spreadsheet with all the relevant data.</li>
</ul>


The HSI added BYD Electronics (285 HK) and deleted Country Garden Services (6098 HK). HSCEI added Zijin Mining Group Co Ltd H (2899 HK) deleted Xinyi Solar Holdings (968 HK) 
HSTECH had no changes, but lots of flow. The index team sets capping levels, then resets them a three days before the actual rebalancing. There were some capping/recapping changes.
Below we offer tables showing all the changes and flows across the indices for each stock, ranked by Flows, ADV, and Ticker. And a spreadsheet with all the relevant data.


HSI/HSCEI/HSTECH June 2024 Rebal Final Re-Capping (Or Re-Re-Capping) Flows

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

<ul>
<li>The June rebalance of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI</a>, <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI INDEX</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH</a> and HSIII indices will use today's closing prices to cap the index constituent weights at 8%/12%. This will lead to large flows.</li>
<li>The round-trip trade across all stocks across the four indices is estimated at HK$32bn (US$4.1bn).</li>
<li>
<a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto</a>, <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</a>, <a href="https://www.smartkarma.com/entities/netease-inc" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase</a>, <a href="https://www.smartkarma.com/entities/zijin-mining-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:6358:1" rel="noopener">Zijin Mining</a>, <a href="https://www.smartkarma.com/entities/sensetime-group-inc" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime</a> and <a href="https://www.smartkarma.com/entities/byd-electronic-international-co-ltd" target="_blank" data-smartkarma-citation="entities:1927:1" rel="noopener">BYD Electronics</a> are the largest buys while <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent</a>, <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com</a>, <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi</a> and <a href="https://www.smartkarma.com/entities/hsbc-holdings-plc" target="_blank" data-smartkarma-citation="entities:516:1" rel="noopener">HSBC Holdings</a> are the largest sells.</li>
</ul>


The June rebalance of the HSI, HSCEI INDEX, HSTECH and HSIII indices will use today's closing prices to cap the index constituent weights at 8%/12%. This will lead to large flows.
The round-trip trade across all stocks across the four indices is estimated at HK$32bn (US$4.1bn).

Li Auto, Alibaba, NetEase, Zijin Mining, SenseTime and BYD Electronics are the largest buys while Tencent, Meituan, JD.com, Kuaishou Technology, Xiaomi and HSBC Holdings are the largest sells.


HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (June 2024)

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>While historically many new inclusions to the HSI have performed disappointingly after their addition, <a href="https://www.smartkarma.com/entities/byd-electronic-international-co-ltd" target="_blank" data-smartkarma-citation="entities:1927:1" rel="noopener">BYD Electronic (285 HK)</a> looks unlikely to follow such a pattern.  <a href="https://www.smartkarma.com/entities/boyd-gaming-corp" target="_blank" data-smartkarma-citation="entities:18556:1" rel="noopener"></a>
</li>
<li>Its share price has underperformed YTD, absolute PER valuations are not stretched and forward P/B multiple is only at the historical average level. These provide a good buffer.</li>
<li>Its industry and business are not at structural and cyclical peaks, with further growth prospects from AI-enhanced products and solutions. A 33% surge in 1Q24 earnings also adds comfort.</li>
</ul>


While historically many new inclusions to the HSI have performed disappointingly after their addition, BYD Electronic (285 HK) looks unlikely to follow such a pattern.  

Its share price has underperformed YTD, absolute PER valuations are not stretched and forward P/B multiple is only at the historical average level. These provide a good buffer.
Its industry and business are not at structural and cyclical peaks, with further growth prospects from AI-enhanced products and solutions. A 33% surge in 1Q24 earnings also adds comfort.


BYD Electronic (285 HK): Will HSI Inclusion Be a Kiss of Death?

<ul>
<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> will be added to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> after market close on 7 June while <a href="https://www.smartkarma.com/entities/country-garden-services-holdin" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services (6098 HK)</a> will be deleted.</li>
<li>Estimated one-way turnover is 1.9% and the estimated round-trip trade is HK$8.46bn (US$1.08bn) with over 1x ADV to trade in the add and delete.</li>
<li>We remain at 82 index constituents and the road to 100 index members looks to be a long and winding one.</li>
</ul>



BYD Electronics (285 HK) will be added to the Hang Seng Index (HSI INDEX) after market close on 7 June while Country Garden Services (6098 HK) will be deleted.
Estimated one-way turnover is 1.9% and the estimated round-trip trade is HK$8.46bn (US$1.08bn) with over 1x ADV to trade in the add and delete.
We remain at 82 index constituents and the road to 100 index members looks to be a long and winding one.


Hang Seng Index (HSI) Rebalance: BYD Electronics Added; Country Garden Services Deleted

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of May 17th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for BOC, Sinopec, CNOOC, HSBC, Kuaishou Technology, Tencent.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of May 17th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for BOC, Sinopec, CNOOC, HSBC, Kuaishou Technology, Tencent.


Hong Kong Connect Flows (May 17th): BOC, Sinopec, CNOOC, HSBC, Kuaishou Technology, Tencent

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.

Price Gauge
52-week Range	0.00 - 0.00
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BYD Electronics (285 HK)

HSI/HSCEI/HSTECH June 2024 Rebal Final Re-Capping (Or Re-Re-Capping) Flows

The Hang Seng Index team provides initial expected changes 2wks before the rebalance, then we review/recap/re-recap 3 days before. That's done....

Travis Lundy

HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (June 2024)

The June rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today's closing prices for capping. The round-trip trade across the four...

Brian Freitas

BYD Electronic (285 HK): Will HSI Inclusion Be a Kiss of Death?

BYD Electronic's HSI inclusion is not expected to put pressure on its share price similar to its precedents due to underperformance, reasonable...

Osbert Tang, CFA

Hang Seng Index (HSI) Rebalance: BYD Electronics Added; Country Garden Services Deleted

BYD Electronics is an add and CG Services is a delete. Estimated one-way turnover is 1.9% and the estimated round-trip trade is HK$8.46bn...

Brian Freitas

Hong Kong Connect Flows (May 17th): BOC, Sinopec, CNOOC, HSBC, Kuaishou Technology, Tencent

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for BOC, Sinopec, CNOOC, HSBC, Kuaishou Technology, Tencent.

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HSI/HSCEI/HSTECH June 2024 Rebal Final Re-Capping (Or Re-Re-Capping) Flows

The Hang Seng Index team provides initial expected changes 2wks before the rebalance, then we review/recap/re-recap 3 days before. That's done....

Travis Lundy

HSI, HSCEI, HSTECH, HSIII: Rebalance Flows Post Capping (June 2024)

The June rebalance of the HSI, HSCEI, HSTECH and HSIII indices will use today's closing prices for capping. The round-trip trade across the four...

Brian Freitas

BYD Electronic (285 HK): Will HSI Inclusion Be a Kiss of Death?

​BYD Electronic's HSI inclusion is not expected to put pressure on its share price similar to its precedents due to underperformance, reasonable...

Osbert Tang, CFA

Hang Seng Index (HSI) Rebalance: BYD Electronics Added; Country Garden Services Deleted

BYD Electronics is an add and CG Services is a delete. Estimated one-way turnover is 1.9% and the estimated round-trip trade is HK$8.46bn...

Brian Freitas

Hong Kong Connect Flows (May 17th): BOC, Sinopec, CNOOC, HSBC, Kuaishou Technology, Tencent

We analyzed southbound Hong Kong connect flows in the past week and highlight flows for BOC, Sinopec, CNOOC, HSBC, Kuaishou Technology, Tencent.

Ke Yan, CFA, FRM

BYD Electronic's HSI inclusion is not expected to put pressure on its share price similar to its precedents due to underperformance, reasonable...