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

Event-Driven

<ul>
<li>There are 24 adds and 14 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 518.</li>
<li>19 of the 24 HSCI inclusions will be added to Southbound Stock Connect, while 12 of the 14 HSCI deletions will be removed from Southbound Stock Connect.</li>
<li>Five of the HSCI constituents could be removed from Southbound Stock Connect only since the average market cap over the last year is less than HK$5bn.</li>
</ul>


There are 24 adds and 14 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 518.
19 of the 24 HSCI inclusions will be added to Southbound Stock Connect, while 12 of the 14 HSCI deletions will be removed from Southbound Stock Connect.
Five of the HSCI constituents could be removed from Southbound Stock Connect only since the average market cap over the last year is less than HK$5bn.


HSCI Index Rebalance: 24 Adds, 14 Deletes & Changes to Stock Connect

<ul>
<li>We see 28 potential inclusions to the HSCI in September, plus another 9 stocks that are close to the inclusion cutoff. Some stocks are already a part of Stock Connect.</li>
<li>There could be 22 deletions from the index on market cap, liquidity and prolonged suspension. Most of the deletions would be moved to the 'sell-only' Southbound Stock Connect list.</li>
<li>Some of the stocks that remain in the HSCI could move to the 'sell-only' Southbound Stock Connect list since their average market cap drops below HKD 5bn.</li>
</ul>


We see 28 potential inclusions to the HSCI in September, plus another 9 stocks that are close to the inclusion cutoff. Some stocks are already a part of Stock Connect.
There could be 22 deletions from the index on market cap, liquidity and prolonged suspension. Most of the deletions would be moved to the 'sell-only' Southbound Stock Connect list.
Some of the stocks that remain in the HSCI could move to the 'sell-only' Southbound Stock Connect list since their average market cap drops below HKD 5bn.


HSCI Index Rebalance and Stock Connect: Potential Changes in September

China Huarong Asset Management / Event-Driven

<ul>
<li>We see seven new listings as potential inclusions to the HSCI in June. One is already a part of Connect while five will be added to Southbound Stock Connect.</li>
<li>We see 19 potential changes to the HSCI in September. Seven of the deletions are on market cap, four on liquidity, and eight due to prolonged trading suspension.</li>
<li>Some of the potential deletions have large Southbound holdings and some of these could be trimmed over the next couple of months.</li>
</ul>


We see seven new listings as potential inclusions to the HSCI in June. One is already a part of Connect while five will be added to Southbound Stock Connect.
We see 19 potential changes to the HSCI in September. Seven of the deletions are on market cap, four on liquidity, and eight due to prolonged trading suspension.
Some of the potential deletions have large Southbound holdings and some of these could be trimmed over the next couple of months.


HSCI Index Rebalance and Stock Connect: Potential Changes in June and September

Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

<p>A series of recent Chinese policies promoting vocational schools instead of traditional secondary education, and efforts to eliminate after-class cramming makes me to recommend short K12 education related stocks and long vocational training related stocks.</p>

A series of recent Chinese policies promoting vocational schools instead of traditional secondary education, and efforts to eliminate after-class cramming makes me to recommend short K12 education related stocks and long vocational training related stocks.

A Twist of Fate – China’s Suppression of Secondary Education in Favor of Vocational Education

APAC IPOs & Placements

Zhen Zhou, Toh

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

<div>
<p><a href="https://www.smartkarma.com/entities/cheerwin" target="_blank" data-smartkarma-citation="entities:31314:1" rel="noopener">Cheerwin (6601 HK)</a> raised US$395m in its Hong Kong IPO, priced at HK$9.20 per share, the top-end of its initial IPO price range.</p>
</div>
<div>
<p>Cheerwin is a home, personal, and pet care product platform. The company sells products such as air care, insecticides, repellants, household cleaners, and etc. As per CIC, the company is ranked first among domestic companies for the past five years (from 2015 - 2019) and had a market share of 9.4% in 2019 in terms of retail sales value.</p>
</div>
<div>
<p>In this note, we discuss how Cheerwin's bookbuild demand compare to recent IPOs and update peer valuation table.</p>
</div>
<div>
<p>We have previously covered the company in:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/cheerwin-pre-ipo-monetizing-a-mature-business" target="_blank" data-smartkarma-citation="insights:47223" rel="noopener">Cheerwin (朝云集团) Pre-IPO - Monetizing a Mature Business</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/cheerwin-pre-ipo-9m20-results-product-review" target="_blank" data-smartkarma-citation="insights:48399" rel="noopener">Cheerwin (朝云集团) Pre-IPO - 9M20 Results + Product Review</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/cheerwin-pre-ipo-peer-analysis-and-thoughts-valuation" target="_blank" data-smartkarma-citation="insights:48493" rel="noopener">Cheerwin (朝云集团) Pre-IPO - Peer Analysis and Thoughts Valuation</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/cheerwin-ipo-not-the-right-price" target="_blank" data-smartkarma-citation="insights:48609" rel="noopener">Cheerwin (朝云集团) IPO - Not the Right Price</a> </li>
</ul>
</div>


Cheerwin (6601 HK) raised US$395m in its Hong Kong IPO, priced at HK$9.20 per share, the top-end of its initial IPO price range.


Cheerwin is a home, personal, and pet care product platform. The company sells products such as air care, insecticides, repellants, household cleaners, and etc. As per CIC, the company is ranked first among domestic companies for the past five years (from 2015 - 2019) and had a market share of 9.4% in 2019 in terms of retail sales value.


In this note, we discuss how Cheerwin's bookbuild demand compare to recent IPOs and update peer valuation table.


We have previously covered the company in:




Cheerwin (朝云集团) Pre-IPO - Monetizing a Mature Business 

Cheerwin (朝云集团) Pre-IPO - 9M20 Results + Product Review 

Cheerwin (朝云集团) Pre-IPO - Peer Analysis and Thoughts Valuation 

Cheerwin (朝云集团) IPO - Not the Right Price 



Cheerwin (朝云集团) IPO - Good Bookbuild Demand but Still Below Average

China

Cathay Media and Education Group Inc. operates as an education training company focus on media and arts. The Company  provides higher education service and training in arts field and television production business. Cathay Media and Education Group serves customers in China.

Cathay Media and Education Group (1981 HK)

Cathay Media and Education Group (1981 HK)

HSCI Index Rebalance: 24 Adds, 14 Deletes & Changes to Stock Connect

There are 24 adds and 14 deletes for the HSCI at the September rebalance. 19 stocks will be added to Stock Connect and 12 will be removed. Some of...

Brian Freitas

HSCI Index Rebalance and Stock Connect: Potential Changes in September

We see 28 potential adds and 9 close adds for the HSCI in September. There are 22 potential deletes on market cap, liquidity and prolonged...

Brian Freitas

HSCI Index Rebalance and Stock Connect: Potential Changes in June and September

We forecast 7 adds to the HSCI in June. For the September rebalance, we forecast 19 adds & 19 deletes (7 on mkt cap, 4 on liquidity, 8 on long...

Brian Freitas

A Twist of Fate – China’s Suppression of Secondary Education in Favor of Vocational Education

Change is afoot in one of China's main social mobility mechanism, the education system. The country is promoting vocational education in an effort...

Evelyn Zhang

Cheerwin (朝云集团) IPO - Good Bookbuild Demand but Still Below Average

Cheerwin (6601 HK) IPO was priced at HK$9.20 per share. In this note, we discuss how Cheerwin's bookbuild demand compare to recent IPOs and update...

Zhen Zhou, Toh