Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

Orient Overseas International / Index Rebalance

<ul>
<li>The review period for the March review of the HSCI ends on 31 December. There are expected to be a lot more inclusions than deletions at the review.</li>
<li>There are quite a few stocks that should be included following their listing over the last couple of months while others are now potential inclusions after passing the velocity test.</li>
<li>Quite a few of the potential deletions from the HSCI and Stock Connect have large holdings via Southbound Stock Connect and these stock could see some selling.</li>
</ul>


The review period for the March review of the HSCI ends on 31 December. There are expected to be a lot more inclusions than deletions at the review.
There are quite a few stocks that should be included following their listing over the last couple of months while others are now potential inclusions after passing the velocity test.
Quite a few of the potential deletions from the HSCI and Stock Connect have large holdings via Southbound Stock Connect and these stock could see some selling.


HSCI Index Rebalance and Stock Connect: More Inclusions than Exclusions in March

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/china-lilang-ltd" target="_blank" data-smartkarma-citation="entities:16002:1" rel="noopener">China Lilang (1234 HK)</a> is a great value play with a tangible recovery story. <a href="https://www.smartkarma.com/entities/china-lilang-ltd" target="_blank" data-smartkarma-citation="entities:16002:1" rel="noopener">China Lilang (1234 HK)</a>  is a China-based company principally engaged in the manufacturing and wholesaling branded menswear and related accessories in China. The Company designs, sources, and manufactures business and casual apparel for men and sells them under the core brand of LILANZ and sub-brand of L2. The company's market capitalization is 6 bn HKD, so it could be on the radar of many funds that deal in the small and mid-cap space, focusing on dividend and value. </p>
<h3>The broad thesis for investment in this name is :</h3>
<p>1.  Value play trading at 8.0x FY20 and 6.9x FY21 with 27% of the market capitalization in cash.</p>
<p>2. Great dividend payout and yield of 9.3%</p>
<p>3. Recovery Underway: In its most recent quarterly operation release, the company stated recovery was underway with Q3 2020 retail sales registering a 5-10% growth and Golden Week sales surging by over 40% YoY.  </p>
<p>4. Management gave stock options to employees</p>
<p>We believe that this stock could easily trade back to its historical highs of 12-13 HKD/share if it continues to deliver in this challenging environment. H2 2020 earnings result will be a good catalyst for the company.</p>
<h3>
<strong>Risks</strong> </h3>
<ol>
<li> The company really doesn't have a good moat over its peers. </li>
<li>Inventory in the channels is currently very high.</li>
<li>The company doesn't have a strong presence in online sales.</li>
</ol>

China Lilang (1234 HK) is a great value play with a tangible recovery story. China Lilang (1234 HK)  is a China-based company principally engaged in the manufacturing and wholesaling branded menswear and related accessories in China. The Company designs, sources, and manufactures business and casual apparel for men and sells them under the core brand of LILANZ and sub-brand of L2. The company's market capitalization is 6 bn HKD, so it could be on the radar of many funds that deal in the small and mid-cap space, focusing on dividend and value. 
The broad thesis for investment in this name is :
1.  Value play trading at 8.0x FY20 and 6.9x FY21 with 27% of the market capitalization in cash.
2. Great dividend payout and yield of 9.3%
3. Recovery Underway: In its most recent quarterly operation release, the company stated recovery was underway with Q3 2020 retail sales registering a 5-10% growth and Golden Week sales surging by over 40% YoY.  
4. Management gave stock options to employees
We believe that this stock could easily trade back to its historical highs of 12-13 HKD/share if it continues to deliver in this challenging environment. H2 2020 earnings result will be a good catalyst for the company.

Risks 

 The company really doesn't have a good moat over its peers. 
Inventory in the channels is currently very high.
The company doesn't have a strong presence in online sales.


China Lilang: Value Play With a Recovery Story

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Mulsanne Group Holding Ltd / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/28049" target="_blank" data-smartkarma-citation="entities:28049:1">Mulsanne Group Holding Ltd (1817 HK)</a> seeks to raise net IPO proceeds of HK$973.0 million ($124 million), at the mid-point of the IPO price range. Cornerstone investors, Wanda Group and Sasseur, intend to purchase around 19% of the offer shares at the mid-point of the IPO price range.</p><div class="content-highlight"><p>In  <a href="https://www.smartkarma.com/insights/mulsanne-group-gxg-ipo-preview-the-wrong-trousers" target="_blank" data-smartkarma-citation="insights:29488">Mulsanne Group (GXG) IPO Preview: The Wrong Trousers</a> and <a href="https://www.smartkarma.com/insights/mulsanne-group-gxg-ipo-a-poor-start-to-2019" target="_blank" data-smartkarma-citation="insights:29794">Mulsanne Group (GXG) IPO: A Poor Start to 2019</a>, we cautioned that that Mulsanne’s fundamentals are less than inspiring.  We believe that the proposed IPO price range is unattractive and would not participate in the proposed IPO price range. </p></div>

Mulsanne Group Holding Ltd (1817 HK) seeks to raise net IPO proceeds of HK$973.0 million ($124 million), at the mid-point of the IPO price range. Cornerstone investors, Wanda Group and Sasseur, intend to purchase around 19% of the offer shares at the mid-point of the IPO price range.In  Mulsanne Group (GXG) IPO Preview: The Wrong Trousers and Mulsanne Group (GXG) IPO: A Poor Start to 2019, we cautioned that that Mulsanne’s fundamentals are less than inspiring.  We believe that the proposed IPO price range is unattractive and would not participate in the proposed IPO price range. 

Mulsanne Group (GXG) IPO: Unattractive Valuation

<p><a href="https://www.smartkarma.com/entities/28049" target="_blank" data-smartkarma-citation="entities:28049:1">Mulsanne Group Holding Ltd (1817 HK)</a> is a leading fashion menswear company based in China. Mulsanne’s brand portfolio comprises of two main categories – GXG series (GXG, gxg.jeans, gxg.kids) and sportswear (Yatlas, 2XU). </p><div class="content-highlight"><p>Mulsanne will open its books tomorrow for a Hong Kong IPO to raise $100-150 million, according to press reports. In <a href="https://www.smartkarma.com/insights/mulsanne-group-gxg-ipo-preview-the-wrong-trousers" target="_blank">our IPO initiation note</a>, we stated that Mulsanne’s fundamentals are less than inspiring. The updated PHIP, which discloses brief financial data for 2M19, reinforces our view.</p></div>

Mulsanne Group Holding Ltd (1817 HK) is a leading fashion menswear company based in China. Mulsanne’s brand portfolio comprises of two main categories – GXG series (GXG, gxg.jeans, gxg.kids) and sportswear (Yatlas, 2XU). Mulsanne will open its books tomorrow for a Hong Kong IPO to raise $100-150 million, according to press reports. In our IPO initiation note, we stated that Mulsanne’s fundamentals are less than inspiring. The updated PHIP, which discloses brief financial data for 2M19, reinforces our view.

Mulsanne Group (GXG) IPO: A Poor Start to 2019

<p><a href="https://www.smartkarma.com/entities/28049" target="_blank" data-smartkarma-citation="entities:28049:1">Mulsanne Group Holding Ltd (1817 HK)</a> is a leading fashion menswear company based in China. Mulsanne’s brand portfolio comprises of two main categories – GXG series (GXG, gxg.jeans, gxg.kids) and sportswear (Yatlas, 2XU).</p><div class="content-highlight"><p>Mulsanne has started pre-marketing for a Hong Kong IPO to raise $200 million, according to press reports. Overall, we believe that Mulsanne’s fundamentals are less than inspiring.</p></div>

Mulsanne Group Holding Ltd (1817 HK) is a leading fashion menswear company based in China. Mulsanne’s brand portfolio comprises of two main categories – GXG series (GXG, gxg.jeans, gxg.kids) and sportswear (Yatlas, 2XU).Mulsanne has started pre-marketing for a Hong Kong IPO to raise $200 million, according to press reports. Overall, we believe that Mulsanne’s fundamentals are less than inspiring.

Mulsanne Group (GXG) IPO Preview: The Wrong Trousers

China

China Lilang Ltd. manufactures men's clothing and accessories.  The company produces suits, jackets, shirts, trousers, sweaters, and accessories.

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China Lilang (1234 HK)

HSCI Index Rebalance and Stock Connect: More Inclusions than Exclusions in March

We expect there will be a lot more inclusions than exclusions at the March rebalance of the HSCI. The changes to the index will result in changes...

Brian Freitas

China Lilang: Value Play With a Recovery Story

China Lilang ( 1234 HK ) is a China-based retail menswear play. Trading at 8x FY20 and 6.9x FY21 with 27% of its market cap in cash and 9.5%...

Sameer Taneja

Mulsanne Group (GXG) IPO: Unattractive Valuation

Mulsanne Group Holding Ltd (1817 HK) seeks to raise net IPO proceeds of HK$973.0 million ($124 million), at the mid-point of the IPO price...

Arun George

Mulsanne Group (GXG) IPO: A Poor Start to 2019

Mulsanne Group Holding Ltd (1817 HK) is a leading fashion menswear company based in China. Mulsanne’s brand portfolio comprises of two main...

Arun George

Mulsanne Group (GXG) IPO Preview: The Wrong Trousers

Mulsanne Group Holding Ltd (1817 HK) is a leading fashion menswear company based in China. Mulsanne’s brand portfolio comprises of two main...

Arun George

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