Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

Shenton Research

Shenton Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Index Rebalance

Han'S Laser Technology In A / Index Rebalance

<ul>
<li>MS-China rebalance involved 33 ADDs and 32 DELETEs on 1 Sep 2026. We review the bridge to 31 Aug against the first implementation week record of nine prior cycles.</li>
<li>ADDs gave back part of their pre-announcement run over the bridge, down 1.8% on average with 20 of 33 lower. DELETEs fell 5.9%, lower in 25 of 32.</li>
<li>Historically, the first implementation week after a negative bridge has been small and mixed on both sides. We map each velocity group to its matching historical record below.</li>
</ul>


MS-China rebalance involved 33 ADDs and 32 DELETEs on 1 Sep 2026. We review the bridge to 31 Aug against the first implementation week record of nine prior cycles.
ADDs gave back part of their pre-announcement run over the bridge, down 1.8% on average with 20 of 33 lower. DELETEs fell 5.9%, lower in 25 of 32.
Historically, the first implementation week after a negative bridge has been small and mixed on both sides. We map each velocity group to its matching historical record below.


MS-China Sep 2026 Index Rebalance: Pre-Implementation Update

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/xinjiang-goldwind-science-technology-h" target="_blank" data-smartkarma-citation="entities:10112:1" rel="noopener">Xinjiang Goldwind Science &amp; Technology (2208 HK)</a> performed badly in 2022 and with sustained pressure on WTG price, earnings will stay under pressure. We will only pick up post-FY22 result.</li>
<li>Removal of "zero COVID" policy and consumption recovery should revive sportswear business of <a href="https://www.smartkarma.com/entities/china-dongxiang-group-co" target="_blank" data-smartkarma-citation="entities:1068:1" rel="noopener">China Dongxiang Group (3818 HK)</a>. Improvement in equity market will boost its investment portfolio value.   </li>
<li>Valuation retreat for <a href="https://www.smartkarma.com/entities/china-longyuan-power-group-corp-ltd" target="_blank" data-smartkarma-citation="entities:14215:1" rel="noopener">China Longyuan Power (916 HK)</a> has made it more attractive. Rebound in electricity demand, continued green energy push and potential asset injection are drivers. </li>
</ul>



Xinjiang Goldwind Science &amp; Technology (2208 HK) performed badly in 2022 and with sustained pressure on WTG price, earnings will stay under pressure. We will only pick up post-FY22 result.
Removal of "zero COVID" policy and consumption recovery should revive sportswear business of China Dongxiang Group (3818 HK). Improvement in equity market will boost its investment portfolio value.   
Valuation retreat for China Longyuan Power (916 HK) has made it more attractive. Rebound in electricity demand, continued green energy push and potential asset injection are drivers. 


Our Three Worst Calls in 2022: Signs of Reversal in 2023

<ul>
<li>Business transformation has supported share price of many companies in 2021, and we expect transformation will stay as an important theme for 2022 with more companies making related announcements.</li>
<li>We highlighted some interesting names in this theme including <a href="https://www.smartkarma.com/entities/yanzhou-coal-mining-company-limited-h" target="_blank" data-smartkarma-citation="entities:384:1" rel="noopener">Yankuang Energy Group Co (1171 HK)</a>, <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:159:1" rel="noopener">Anhui Conch Cement (914 HK)</a>, <a href="https://www.smartkarma.com/entities/china-energy-engineering-group" target="_blank" data-smartkarma-citation="entities:21017:1" rel="noopener">China Energy Engineering (3996 HK)</a> and <a href="https://www.smartkarma.com/entities/shenzhen-expressway-co-h" target="_blank" data-smartkarma-citation="entities:2875:1" rel="noopener">Shenzhen Expressway Co (548 HK)</a>. </li>
<li>While some have already seen share price rallied, many are still lagging other transformation plays. They are also mostly trading on low multiples with transformation potential not yet fully reflected.</li>
</ul>


Business transformation has supported share price of many companies in 2021, and we expect transformation will stay as an important theme for 2022 with more companies making related announcements.
We highlighted some interesting names in this theme including Yankuang Energy Group Co (1171 HK), Anhui Conch Cement (914 HK), China Energy Engineering (3996 HK) and Shenzhen Expressway Co (548 HK). 
While some have already seen share price rallied, many are still lagging other transformation plays. They are also mostly trading on low multiples with transformation potential not yet fully reflected.


Business Transformation Is the Theme in 2022 and Some Interesting Companies to Watch

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

China Longyuan Power Group / Equity Bottom-Up

<ul>
<li>The H share market continues to be the top performing market in Asia in 2024.  The HSCEI has outperformed all Asian markets on a USD basis.
</li>
<li>
<a href="https://www.smartkarma.com/entities/china-longyuan-power-group-corp-ltd" target="_blank" data-smartkarma-citation="entities:14215:1" rel="noopener">China Longyuan Power (916 HK)</a> was rated a BUY at JP Morgan with the company hosting a roadshow to discuss its future growth strategy. 
</li>
<li>
<a href="https://www.smartkarma.com/entities/china-resources-beverage" target="_blank" data-smartkarma-citation="entities:41984:1" rel="noopener">China Resources Beverage (2460 HK)</a> was initiated as a BUY at CMB International as the company rapidly expands into the ready-to-drink category with teas and sports drinks.
</li>
</ul>


The H share market continues to be the top performing market in Asia in 2024.  The HSCEI has outperformed all Asian markets on a USD basis.


China Longyuan Power (916 HK) was rated a BUY at JP Morgan with the company hosting a roadshow to discuss its future growth strategy. 


China Resources Beverage (2460 HK) was initiated as a BUY at CMB International as the company rapidly expands into the ready-to-drink category with teas and sports drinks.



BUY/SELL/HOLD: Hong Kong Stock Updates (December 13)

China Power International Development / Equity Bottom-Up

China Power International Development (2380 HK)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-power-international" target="_blank" data-smartkarma-citation="entities:15548:1" rel="noopener">China Power International (2380 HK)</a> kicked off FY24 with an impressive 51.5% surge in 1H24 net profit. All business segments improved YoY, with hydropower being the best. </li>
<li>Both volume growth and cost reduction are the key drivers, supporting a 7.2pp gross margin expansion. The 5pp increase in the proportion of hydropower sold also lifted profitability.</li>
<li>CPI will grow its capacity to 52GW by end FY24, a 15.5% YoY and 7.8% HoH increase. Moreover, the upside will come from more asset injection from its parent.</li>
</ul>



China Power International (2380 HK) kicked off FY24 with an impressive 51.5% surge in 1H24 net profit. All business segments improved YoY, with hydropower being the best. 
Both volume growth and cost reduction are the key drivers, supporting a 7.2pp gross margin expansion. The 5pp increase in the proportion of hydropower sold also lifted profitability.
CPI will grow its capacity to 52GW by end FY24, a 15.5% YoY and 7.8% HoH increase. Moreover, the upside will come from more asset injection from its parent.


China Power International (2380 HK): Firing on All Cylinders

Hong Kong

China Power International Development Ltd. is an investment holding company primarily engaged in the generation and sale of electricity. It develops, constructs, owns, operates, and manages power plants in the People's Republic of China, encompassing hydropower, wind power, photovoltaic power, thermal power, natural gas power, environmental power, and energy storage, as well as green power transportation and integrated intelligent energy solution services. The company was incorporated in Hong Kong on March 24, 2004, and its headquarters are located in Hong Kong, China.

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China Power International Development (2380 HK)

MS-China Sep 2026 Index Rebalance: Pre-Implementation Update

MS-China enters implementation on 1 Sep with 33 ADDs and 32 DELETEs. We update post-announcement stock performance and discuss implementation trades.

Ke Yan, CFA, FRM

Our Three Worst Calls in 2022: Signs of Reversal in 2023

Share prices of our three worst calls in 2022 experienced good rebounds so far into 2023. We think outlook for China Dongxiang and China Longyuan...

Osbert Tang, CFA

Business Transformation Is the Theme in 2022 and Some Interesting Companies to Watch

Business transformation will stay as an important theme for 2022 and we highlight Yankuang Energy, Anhui Conch Cement, China Energy Engineering and...

Osbert Tang, CFA

BUY/SELL/HOLD: Hong Kong Stock Updates (December 13)

H shares have outperformed all Asian markets this year on a USD basis. Longyuan Power continues to expand its offshore capacity & overseas...

David Mudd

China Power International (2380 HK): Firing on All Cylinders

CPI saw a 51.5% surge in 1H24 net profit, driven by growth in all business segments, particularly hydropower. Expansion in capacity and cost...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

MS-China Sep 2026 Index Rebalance: Pre-Implementation Update

MS-China enters implementation on 1 Sep with 33 ADDs and 32 DELETEs. We update post-announcement stock performance and discuss implementation trades.

Ke Yan, CFA, FRM

Our Three Worst Calls in 2022: Signs of Reversal in 2023

Share prices of our three worst calls in 2022 experienced good rebounds so far into 2023. We think outlook for China Dongxiang and China Longyuan...

Osbert Tang, CFA

Business Transformation Is the Theme in 2022 and Some Interesting Companies to Watch

Business transformation will stay as an important theme for 2022 and we highlight Yankuang Energy, Anhui Conch Cement, China Energy Engineering and...

Osbert Tang, CFA

BUY/SELL/HOLD: Hong Kong Stock Updates (December 13)

H shares have outperformed all Asian markets this year on a USD basis. Longyuan Power continues to expand its offshore capacity & overseas...

David Mudd

China Power International (2380 HK): Firing on All Cylinders

​CPI saw a 51.5% surge in 1H24 net profit, driven by growth in all business segments, particularly hydropower. Expansion in capacity and cost...

Osbert Tang, CFA

CPI saw a 51.5% surge in 1H24 net profit, driven by growth in all business segments, particularly hydropower. Expansion in capacity and cost...