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

AVIC (Chengdu) UAS Co Ltd / Index Rebalance

<ul>
<li>The index committee has used a 6-month minimum listing history and that results in two changes. This is the first rebalance with less than 5 changes at a review.</li>
<li>One way turnover is estimated at 1.03% and will result in a one-way trade of CNY 1,025m. Given the adds are new listings, there will be some reverse funding flow.</li>
<li>There appears to be little pre-positioning on the adds while there is a bigger buildup on the deletes.</li>
</ul>


The index committee has used a 6-month minimum listing history and that results in two changes. This is the first rebalance with less than 5 changes at a review.
One way turnover is estimated at 1.03% and will result in a one-way trade of CNY 1,025m. Given the adds are new listings, there will be some reverse funding flow.
There appears to be little pre-positioning on the adds while there is a bigger buildup on the deletes.


STAR50 Index Rebalance: Two Changes in June (As Expected)

<ul>
<li>The review period for the June rebalance ends 28 April. We expect the changes to be announced 26 May with the implementation taking place after the close on 9 June.</li>
<li>Using a 12-month minimum listing history results in no index changes. Using a 6-month minimum listing history results in two changes - we think this is what will be used.</li>
<li>The potential adds have outperformed the potential deletes but both sets of stocks have underperformed the <a href="https://www.smartkarma.com/entities/sse-science-and-technology-innovation-board-50-index" target="_blank" data-smartkarma-citation="entities:29279:1" rel="noopener">SSE STAR50 (STAR50 INDEX)</a> and the <a href="https://www.smartkarma.com/entities/csi-smallcap-500-index-shanghai" target="_blank" data-smartkarma-citation="entities:35347:1" rel="noopener">CSI Smallcap 500 Index - Shanghai (SH000905 INDEX)</a>. </li>
</ul>


The review period for the June rebalance ends 28 April. We expect the changes to be announced 26 May with the implementation taking place after the close on 9 June.
Using a 12-month minimum listing history results in no index changes. Using a 6-month minimum listing history results in two changes - we think this is what will be used.
The potential adds have outperformed the potential deletes but both sets of stocks have underperformed the SSE STAR50 (STAR50 INDEX) and the CSI Smallcap 500 Index - Shanghai (SH000905 INDEX). 


STAR50 Index Rebalance Preview: Changes Depend on Minimum Listing History

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Beijing Luzhu Biotechnology / Equity Capital Markets

<ul>
<li>Either vaccines or therapeutic biologics, Luzhu’s clinical progress has no advantages. There have been quite a few competing products on the market or candidates with faster development progress than Luzhu.</li>
<li>Luzhu applies the low price strategy to open the market. We're not sure if it works or not, since it still depends on R&amp;D efficiency, product quality and commercialization capabilities.</li>
<li>We tend to be conservative about the Company's prospects because its eventual revenue scale and profit margins are likely to be very limited based on our analysis.</li>
</ul>


Either vaccines or therapeutic biologics, Luzhu’s clinical progress has no advantages. There have been quite a few competing products on the market or candidates with faster development progress than Luzhu.
Luzhu applies the low price strategy to open the market. We're not sure if it works or not, since it still depends on R&amp;D efficiency, product quality and commercialization capabilities.
We tend to be conservative about the Company's prospects because its eventual revenue scale and profit margins are likely to be very limited based on our analysis.


Pre-IPO Beijing Luzhu Biotechnology - The Eventual Revenue Scale and Profit Margins Could Be Limited

Jiangsu Cnano Technology  Lt / Index Rebalance

<ul>
<li>The review period for the June rebalance ends 30 April. We expect the changes to be announced 26 May with the implementation taking place after the close on 9 June.</li>
<li>We expect the index committee to continue using a 6-month minimum listing history resulting in two changes to the index.</li>
<li>One way turnover is estimated at 1.6% resulting in a one-way trade of CNY 1,442m. The impact on the deletions will be larger than that on the inclusions.</li>
</ul>


The review period for the June rebalance ends 30 April. We expect the changes to be announced 26 May with the implementation taking place after the close on 9 June.
We expect the index committee to continue using a 6-month minimum listing history resulting in two changes to the index.
One way turnover is estimated at 1.6% resulting in a one-way trade of CNY 1,442m. The impact on the deletions will be larger than that on the inclusions.


STAR50 Index Rebalance Preview: Two Changes in June (Possibly)

Changchun BCHT Biotechnology C / Equity Capital Markets

<ul>
<li>Single product structure is the biggest risk of BCHT. Varicella vaccine is hard to drive BCHT’s performance growth in the future and the sales of influenza vaccine are not ideal. </li>
<li>There’re concerns about the protection rate of attenuated zoster vaccine,which won't be officially sold until 2023H2/2024. It’s not sure whether the situation can be reversed by attenuated zoster vaccine alone.</li>
<li>BCHT is inferior to CanSino in terms of pipeline quality and R&amp;D capability. The investment value of BCHT is not high. We think its valuation should be lower than CanSino.</li>
</ul>


Single product structure is the biggest risk of BCHT. Varicella vaccine is hard to drive BCHT’s performance growth in the future and the sales of influenza vaccine are not ideal. 
There’re concerns about the protection rate of attenuated zoster vaccine,which won't be officially sold until 2023H2/2024. It’s not sure whether the situation can be reversed by attenuated zoster vaccine alone.
BCHT is inferior to CanSino in terms of pipeline quality and R&amp;D capability. The investment value of BCHT is not high. We think its valuation should be lower than CanSino.


Pre-IPO Changchun BCHT Biotechnology - The Risk of Single-Product Dependence and Uncertain Outlook

China

Changchun BCHT Biotechnology Co. Ltd. operates as a high-tech biopharmaceutical company. The Company provides human vaccine researching, development, production, and sales services. Changchun BCHT Biotechnology markets its products throughout China.

Changchun BCHT Biotechnology C (688276 CH)

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Changchun BCHT Biotechnology C (688276 CH)

STAR50 Index Rebalance: Two Changes in June (As Expected)

There are 2 changes for the STAR50 Index as a 6-month minimum listing history is used. There is little increase in excess volume on the adds while...

Brian Freitas

STAR50 Index Rebalance Preview: Changes Depend on Minimum Listing History

There could be 2 index changes if a 6-month minimum listing history is used. The potential adds have outperformed the potential deletes. But both...

Brian Freitas

Pre-IPO Beijing Luzhu Biotechnology - The Eventual Revenue Scale and Profit Margins Could Be Limited

Clinical progress of Luzhu’s candidates has no advantages.In front of fierce competition, low price strategy may not work,leading to limited...

Xinyao (Criss) Wang

STAR50 Index Rebalance Preview: Two Changes in June (Possibly)

There could be 2 changes to the index in June with a higher impact on the deletes than on the adds. The potential adds have started to o/p the...

Brian Freitas

Pre-IPO Changchun BCHT Biotechnology - The Risk of Single-Product Dependence and Uncertain Outlook

BCHT plans to IPO in Swiss. The risk of its over-reliance on a single product remains unresolved.The outlook of new attenuated zoster vaccine may...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)