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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

The September 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">Hong Kong Hang Seng Index (HSI INDEX)</a> was implemented at the close of trading on 3 September. Hang Seng Indexes should announce the results of the December 2021 review of the Hang Seng Family of Indexes on 12 November. The constituent changes will be effective after the close of trading on 3 December.The review period for the December rebalance ends on 30 September and stocks that have at least 3 month of trading history by the review meeting date are eligible for inclusion in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>.There were 3 inclusions at the June rebalance and 3 inclusions and 1 exclusion at the September rebalance to take the number of index constituents to 60.With Hang Seng Indexes looking to get up to 80 <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a> members by mid-2022, there could be 20 inclusions over the next 3 index rebalances.Stocks that are ranked towards the top of their Industry group and are potential inclusions are <a href="https://www.smartkarma.com/entities/smoore-international" target="_blank" data-smartkarma-citation="entities:28241:1" rel="noopener">Smoore International (6969 HK)</a>, <a href="https://www.smartkarma.com/entities/nongfu-spring" target="_blank" data-smartkarma-citation="entities:28955:1" rel="noopener">Nongfu Spring (9633 HK)</a>, <a href="https://www.smartkarma.com/entities/china-resources-beer-holdings" target="_blank" data-smartkarma-citation="entities:399:1" rel="noopener">China Resources Beer Holdings (291 HK)</a>, <a href="https://www.smartkarma.com/entities/china-resources-mixc-lifestyle-services" target="_blank" data-smartkarma-citation="entities:29285:1" rel="noopener">China Resources Mixc Lifestyle Services (1209 HK)</a>, <a href="https://www.smartkarma.com/entities/sunac-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:240:1" rel="noopener">Sunac China Holdings (1918 HK)</a>, <a href="https://www.smartkarma.com/entities/china-gas-holdings-ltd" target="_blank" data-smartkarma-citation="entities:14315:1" rel="noopener">China Gas Holdings (384 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a>, <a href="https://www.smartkarma.com/entities/hansoh-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:23675:1" rel="noopener">Hansoh Pharmaceutical (3692 HK)</a>, <a href="https://www.smartkarma.com/entities/china-hongqiao-group-ltd" target="_blank" data-smartkarma-citation="entities:1909:1" rel="noopener">China Hongqiao (1378 HK)</a> and <a href="https://www.smartkarma.com/entities/fosun-international-ltd" target="_blank" data-smartkarma-citation="entities:433:1" rel="noopener">Fosun International (656 HK)</a>.Given that the index committee consciously avoided including stocks from sectors that were targeted by tightening regulations in China, this list will be revised closer to the index committee meeting in November. Another factor that will determine the number of inclusions is the turnover at the rebalance - while it is less than 4% now with the 10 inclusions, that number will move higher as stocks move around and there are capping changes on the largest constituents.

The September rebalance of the Hong Kong Hang Seng Index (HSI INDEX) was implemented at the close of trading on 3 September. Hang Seng Indexes should announce the results of the December 2021 review of the Hang Seng Family of Indexes on 12 November. The constituent changes will be effective after the close of trading on 3 December.The review period for the December rebalance ends on 30 September and stocks that have at least 3 month of trading history by the review meeting date are eligible for inclusion in the Hong Kong Hang Seng Index (HSI INDEX).There were 3 inclusions at the June rebalance and 3 inclusions and 1 exclusion at the September rebalance to take the number of index constituents to 60.With Hang Seng Indexes looking to get up to 80 Hong Kong Hang Seng Index (HSI INDEX) members by mid-2022, there could be 20 inclusions over the next 3 index rebalances.Stocks that are ranked towards the top of their Industry group and are potential inclusions are Smoore International (6969 HK), Nongfu Spring (9633 HK), China Resources Beer Holdings (291 HK), China Resources Mixc Lifestyle Services (1209 HK), Sunac China Holdings (1918 HK), China Gas Holdings (384 HK), JD Health (6618 HK), Hansoh Pharmaceutical (3692 HK), China Hongqiao (1378 HK) and Fosun International (656 HK).Given that the index committee consciously avoided including stocks from sectors that were targeted by tightening regulations in China, this list will be revised closer to the index committee meeting in November. Another factor that will determine the number of inclusions is the turnover at the rebalance - while it is less than 4% now with the 10 inclusions, that number will move higher as stocks move around and there are capping changes on the largest constituents.

HSI Index Rebalance Preview: Potential Inclusions in December

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.

Event-Driven

China Resources Mixc Lifestyle Services / Event-Driven

China Resources Mixc Lifestyle Services (1209 HK)

<a href="https://www.smartkarma.com/entities/china-resources-mixc-lifestyle-services" target="_blank" data-smartkarma-citation="entities:29285:1" rel="noopener">China Resources Mixc Lifestyle Services (1209 HK)</a> (CRML) was listed on the Hong Kong Exchange on 9th December, 2020. Its IPO lock-up will expire on 9th June, 2021.CRML is the property management arm of China Resources Land (CR Land). The company provides property management and value-added services (VAS) to residential properties. It also manages and operates a portfolio of commercial properties that includes shopping malls and office buildings. In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.We have previously covered the IPO in:<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/cr-mixc-lifestyle-services-pre-ipo-a-balance-of-residential-and-commercial-properties" target="_blank" data-smartkarma-citation="insights:43376" rel="noopener">CR Mixc Lifestyle Services (华润万象生活) Pre-IPO - A Balance of Residential and Commercial Properties</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/cr-mixc-lifestyle-services-pre-ipo-soe-linked-parentage-didn-t-help" target="_blank" data-smartkarma-citation="insights:45187" rel="noopener">CR Mixc Lifestyle Services (华润万象生活) Pre-IPO - SOE-Linked Parentage Didn’t Help</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/cr-mixc-lifestyle-services-ipo-needs-time-to-prove-itself" target="_blank" data-smartkarma-citation="insights:45644" rel="noopener">CR Mixc Lifestyle Services (华润万象生活) IPO - Needs Time to Prove Itself</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/cr-mixc-lifestyle-services-ipo-trading-better-demand-than-recent-peers-ipos" target="_blank" data-smartkarma-citation="insights:46143" rel="noopener">CR Mixc Lifestyle Services (华润万象生活) IPO Trading - Better Demand than Recent Peers' IPOs</a> </li>
</ul>

China Resources Mixc Lifestyle Services (1209 HK) (CRML) was listed on the Hong Kong Exchange on 9th December, 2020. Its IPO lock-up will expire on 9th June, 2021.CRML is the property management arm of China Resources Land (CR Land). The company provides property management and value-added services (VAS) to residential properties. It also manages and operates a portfolio of commercial properties that includes shopping malls and office buildings. In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.We have previously covered the IPO in:

CR Mixc Lifestyle Services (华润万象生活) Pre-IPO - A Balance of Residential and Commercial Properties 

CR Mixc Lifestyle Services (华润万象生活) Pre-IPO - SOE-Linked Parentage Didn’t Help 

CR Mixc Lifestyle Services (华润万象生活) IPO - Needs Time to Prove Itself 

CR Mixc Lifestyle Services (华润万象生活) IPO Trading - Better Demand than Recent Peers' IPOs 


CR Mixc Svcs (华润万象生活)  Lock-Up Expiry - Quick Note - Solid Performance Since IPO

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.

Sichuan Languang Justbon Services / Event-Driven

Sichuan Languang Justbon Services (2606 HK)

<a href="https://www.smartkarma.com/entities/sichuan-languang-justbon-service-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:28337:1" rel="noopener">Sichuan Languang Justbon Service Group (2606 HK)</a> has despatched the composite document in relation to <a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK)</a> base and enhanced offer. Currently, Country Garden owns 71.17% of the outstanding shares comprising 66.99% of the domestic shares and 71.20% of the H Shares. The base offer is an unconditional mandatory cash offer for all the issued shares is HK$51.0571 per H-share (RMB42.8547 per domestic share. The enhanced share offer, which is payable only if the delisting is approved, is HK$54.3000 per H-share (RMB45.5768 per domestic share). Unsurprisingly, the IFA considers the base and enhanced offer to be fair and reasonable. We broadly agree with the IFA analysis with the exception that the peer multiple comparisons could be improved. The two key conditions for the delisting will be approval by at least 75% independent H-shareholders (&lt;10% of all independent H-shareholders rejection) and the satisfaction of the minimum acceptance condition (90% of H-shares held by independent H-shareholders). Satisfaction of the minimum acceptance condition is the key hurdle. We note the privatisation proposals for <a href="https://www.smartkarma.com/entities/beijing-jingneng-clean-energy-co-ltd" target="_blank" data-smartkarma-citation="entities:16316:1" rel="noopener">Beijing Jingneng Clean Energy (579 HK)</a> and <a href="https://www.smartkarma.com/entities/harbin-electric-co-ltd-h" target="_blank" data-smartkarma-citation="entities:11116:1" rel="noopener">Harbin Electric Co Ltd H (1133 HK)</a> have previously failed due to the inability to meet the 90% minimum acceptance condition.  <div class="content-highlight">Country Garden Services has bought itself some leeway by having the right to extend the closing date from 17 June to not later than 3 September. In theory, the extended time period should provide a greater chance of meeting the 90% threshold. At the last close, the gross spread to the enhanced offer price of HK$54.3000 stands at 4.9%.</div>

Sichuan Languang Justbon Service Group (2606 HK) has despatched the composite document in relation to Country Garden Services Holdings (6098 HK) base and enhanced offer. Currently, Country Garden owns 71.17% of the outstanding shares comprising 66.99% of the domestic shares and 71.20% of the H Shares. The base offer is an unconditional mandatory cash offer for all the issued shares is HK$51.0571 per H-share (RMB42.8547 per domestic share. The enhanced share offer, which is payable only if the delisting is approved, is HK$54.3000 per H-share (RMB45.5768 per domestic share). Unsurprisingly, the IFA considers the base and enhanced offer to be fair and reasonable. We broadly agree with the IFA analysis with the exception that the peer multiple comparisons could be improved. The two key conditions for the delisting will be approval by at least 75% independent H-shareholders (&lt;10% of all independent H-shareholders rejection) and the satisfaction of the minimum acceptance condition (90% of H-shares held by independent H-shareholders). Satisfaction of the minimum acceptance condition is the key hurdle. We note the privatisation proposals for Beijing Jingneng Clean Energy (579 HK) and Harbin Electric Co Ltd H (1133 HK) have previously failed due to the inability to meet the 90% minimum acceptance condition.  Country Garden Services has bought itself some leeway by having the right to extend the closing date from 17 June to not later than 3 September. In theory, the extended time period should provide a greater chance of meeting the 90% threshold. At the last close, the gross spread to the enhanced offer price of HK$54.3000 stands at 4.9%.

Languang Justbon’s Composite Document, IFA Opinion and Extended Closing Date

Chart based progressive global trading strategies, Chart Partners

Thomas Schroeder

Chart based progressive global trading strategies

Chart Partners

Chart Partners objective is to discover medium-term cycle turns and profit opportunities before they unfold, within structural trends while preserving capital with clear degrees of risk. We have real return ideas. 

Markets are dynamic and trading systems must reflect this. It is crucial to determine underlying correlations and lead-lag relationships within global markets and the impact on linked instruments. Our weekly Chartonics product gives you short-term trading strategies that can be applied within the medium and longer term macro trends that are mapped out in our strategy updates. 

Our methodology fuses global market variables and isolates drivers in trends. We specialize in FX, index trade in NY and Asia with a focus on Asian stocks. 

Technical Analysis

China Resources Mixc Lifestyle Services / Technical Analysis

<a href="https://www.smartkarma.com/entities/china-resources-mixc-lifestyle-services" target="_blank" data-smartkarma-citation="entities:29285:1" rel="noopener">China Resources Mixc Lifestyle Services (1209 HK)  </a>displays a bullish flat or bullish a-b-c set up that supports new highs. Holding 44/45 sets up a bull push to break triangle resistance and set in motion a move higher that would attract buy volume.Bullish flat/triangle favors a bull breakout above 50 as long as we do not see a close below 44. Above 50 targets dual projection at 79 and would then most likely upgrade toward 85.

China Resources Mixc Lifestyle Services (1209 HK)  displays a bullish flat or bullish a-b-c set up that supports new highs. Holding 44/45 sets up a bull push to break triangle resistance and set in motion a move higher that would attract buy volume.Bullish flat/triangle favors a bull breakout above 50 as long as we do not see a close below 44. Above 50 targets dual projection at 79 and would then most likely upgrade toward 85.

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

<a href="https://www.smartkarma.com/entities/times-neighborhood-holdings" target="_blank" data-smartkarma-citation="entities:28666:1" rel="noopener">Times Neighborhood (9928 HK)</a> has corrected sharply over the last 6 months despite showing stellar results. We believe that the correction in the stock is due to: <ul>
<li>A small probability of the parent ( <a href="https://www.smartkarma.com/entities/times-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:8085:1" rel="noopener">Times China (1233 HK)</a> ) breaching the three red lines.</li>
<li>Tightening by the Chinese government in the property sector.</li>
<li>IPO fatigue in the sector. 2020 featured the listing of several property management companies that raised lots of cash, casting doubt on the companies ability to make acquisitions at good prices to fuel its future growth.</li>
<li>Pivot by the company from a more acquisitive to a third party strategy + expansion of community VAS services.</li>
</ul><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/199/869/original/image_15589350561618115623007.png?1618115619" class="editor-image img-responsive" data-smartkarma-image-id="199869"></figure>Source: Bloomberg<h3>Why do we like <a href="https://www.smartkarma.com/entities/times-neighborhood-holdings" target="_blank" data-smartkarma-citation="entities:28666:1" rel="noopener">Times Neighborhood (9928 HK)</a>?</h3><ul>
<li>We believe that with the current valuation of 12.4x FY21/8.6x FY22 and 5.8x FY23 implying &gt;50% CAGR EPS growth from FY21-23,  <a href="https://www.smartkarma.com/entities/times-neighborhood-holdings" target="_blank" data-smartkarma-citation="entities:28666:1" rel="noopener">Times Neighborhood (9928 HK)</a> could potentially be an acquisition target for larger groups like <a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK)</a>, <a href="https://www.smartkarma.com/entities/china-resources-mixc-lifestyle-services" target="_blank" data-smartkarma-citation="entities:29285:1" rel="noopener">China Resources Mixc Lifestyle Services (1209 HK)</a>, <a href="https://www.smartkarma.com/entities/a-living-services-co-ltd" target="_blank" data-smartkarma-citation="entities:26728:1" rel="noopener">A-Living Services (3319 HK)</a> or <a href="https://www.smartkarma.com/entities/sunac-services-holdings" target="_blank" data-smartkarma-citation="entities:29239:1" rel="noopener">Sunac Services Holdings (1516 HK)</a> that are targeting aggressive growth over the next 2-3 years. We admit that we don't know if the controlling shareholders of <a href="https://www.smartkarma.com/entities/times-neighborhood-holdings" target="_blank" data-smartkarma-citation="entities:28666:1" rel="noopener">Times Neighborhood (9928 HK)</a> desire to sell out. Recently though, with the <a href="https://www.smartkarma.com/entities/sichuan-languang-justbon-service-group-co-ltd-h" target="_blank" data-smartkarma-citation="entities:28337:1" rel="noopener">Sichuan Languang Justbon Service Group (2606 HK)</a> founders having sold out to <a href="https://www.smartkarma.com/entities/country-garden-services-holdings-company-limited" target="_blank" data-smartkarma-citation="entities:27343:1" rel="noopener">Country Garden Services Holdings (6098 HK), </a>we believe this may be the first step towards increased M&amp;A activity in the listed company space. We believe this acquisition's consummation will lead to a rerating of the cheaper companies like <a href="https://www.smartkarma.com/entities/aoyuan-healthy-life-group-company-limited" target="_blank" data-smartkarma-citation="entities:29130:1" rel="noopener">Aoyuan Healthy Life Group (3662 HK)</a>, <a href="https://www.smartkarma.com/entities/central-china-new-life" target="_blank" data-smartkarma-citation="entities:28953:1" rel="noopener">Central China New Life (9983 HK), </a>and <a href="https://www.smartkarma.com/entities/times-neighborhood-holdings" target="_blank" data-smartkarma-citation="entities:28666:1" rel="noopener">Times Neighborhood (9928 HK)</a>.</li>
<li>
<a href="https://www.smartkarma.com/entities/times-neighborhood-holdings" target="_blank" data-smartkarma-citation="entities:28666:1" rel="noopener">Times Neighborhood (9928 HK)</a>  has demonstrated good execution in its short time period as a listed company. </li>
</ul>We believe that <a href="https://www.smartkarma.com/entities/times-neighborhood-holdings" target="_blank" data-smartkarma-citation="entities:28666:1" rel="noopener">Times Neighborhood (9928 HK)</a> could double from here, trading up to 25x FY21 with a target PEG of 0.6x.

Times Neighborhood (9928 HK) has corrected sharply over the last 6 months despite showing stellar results. We believe that the correction in the stock is due to: 
A small probability of the parent ( Times China (1233 HK) ) breaching the three red lines.
Tightening by the Chinese government in the property sector.
IPO fatigue in the sector. 2020 featured the listing of several property management companies that raised lots of cash, casting doubt on the companies ability to make acquisitions at good prices to fuel its future growth.
Pivot by the company from a more acquisitive to a third party strategy + expansion of community VAS services.
Source: BloombergWhy do we like Times Neighborhood (9928 HK)?
We believe that with the current valuation of 12.4x FY21/8.6x FY22 and 5.8x FY23 implying &gt;50% CAGR EPS growth from FY21-23,  Times Neighborhood (9928 HK) could potentially be an acquisition target for larger groups like Country Garden Services Holdings (6098 HK), China Resources Mixc Lifestyle Services (1209 HK), A-Living Services (3319 HK) or Sunac Services Holdings (1516 HK) that are targeting aggressive growth over the next 2-3 years. We admit that we don't know if the controlling shareholders of Times Neighborhood (9928 HK) desire to sell out. Recently though, with the Sichuan Languang Justbon Service Group (2606 HK) founders having sold out to Country Garden Services Holdings (6098 HK), we believe this may be the first step towards increased M&amp;A activity in the listed company space. We believe this acquisition's consummation will lead to a rerating of the cheaper companies like Aoyuan Healthy Life Group (3662 HK), Central China New Life (9983 HK), and Times Neighborhood (9928 HK).

Times Neighborhood (9928 HK)  has demonstrated good execution in its short time period as a listed company. 
We believe that Times Neighborhood (9928 HK) could double from here, trading up to 25x FY21 with a target PEG of 0.6x.

Times Neighborhood - Value+Growth, Could It Be an Acquisition Target?

China

China Resources Mixc Lifestyle Services provides property management and commercial operational services across the People's Republic of China. The company manages a diversified portfolio including residential communities, shopping malls, and office buildings, offering services such as pre-opening management, security, cleaning, and community lifestyle services. It is headquartered in Shenzhen, China, and was founded in 1994.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

China Resources Mixc Lifestyle Services (1209 HK)

HSI Index Rebalance Preview: Potential Inclusions in December

There could be 10 inclusions to the HSI at the Dec rebalance to help reach the 80 index member count by mid-2022. Index turnover & regulations will...

Brian Freitas

CR Mixc Svcs (华润万象生活) Lock-Up Expiry - Quick Note - Solid Performance Since IPO

China Resources Mixc Lifestyle Services (1209 HK) (CRML) was listed on the Hong Kong Exchange on 9th December, 2020. Its IPO lock-up will expire on...

Zhen Zhou, Toh

Languang Justbon’s Composite Document, IFA Opinion and Extended Closing Date

Satisfaction of the minimum acceptance condition is the key hurdle. At the last close, the gross spread to the enhanced offer price of HK$54.3000...

Arun George

CR Mixc Lifestyle Services Bull Triangle

China Resources Mixc Lifestyle Services (1209 HK) displays a bullish flat or bullish a-b-c set up that supports new highs. Holding 44/45 sets up a...

Thomas Schroeder

Times Neighborhood - Value+Growth, Could It Be an Acquisition Target?

This insight highlights an opportunity in the property management company Times Neighborhood, having a 50% CAGR in profits from 2020-23 and trading...

Sameer Taneja

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)