HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>The collapse of the US markets on Friday, following better-than-expected nonfarm payrolls in May, is expected to send the Asian markets into panic on Monday.</li>
<li>The IPOs in Hong Kong this year are vulnerable, especially those that performed well, like <a href="https://www.smartkarma.com/entities/knowledge-atlas-technology-joint-stock-company-limited-class-h" target="_blank" data-smartkarma-citation="entities:44500:1" rel="noopener">Knowledge Atlas Technology (2513 HK)</a> and Beijing Deepzero Technology (2723 HK).</li>
<li>
<a href="https://www.smartkarma.com/entities/giga-device-semiconductor-inc-class-h" target="_blank" data-smartkarma-citation="entities:46238:1" rel="noopener">GigaDevice Semiconductor (3986 HK)</a>, <a href="https://www.smartkarma.com/entities/montage-technology-co-ltd-class-h" target="_blank" data-smartkarma-citation="entities:46333:1" rel="noopener">Montage Technology (6809 HK)</a>, and <a href="https://www.smartkarma.com/entities/minimax-group-inc" target="_blank" data-smartkarma-citation="entities:46185:1" rel="noopener">MiniMax (100 HK)</a> are also riskier names in the current market environment. </li>
</ul>


The collapse of the US markets on Friday, following better-than-expected nonfarm payrolls in May, is expected to send the Asian markets into panic on Monday.
The IPOs in Hong Kong this year are vulnerable, especially those that performed well, like Knowledge Atlas Technology (2513 HK) and Beijing Deepzero Technology (2723 HK).

GigaDevice Semiconductor (3986 HK), Montage Technology (6809 HK), and MiniMax (100 HK) are also riskier names in the current market environment. 


HK Strategy: The Imminent Sell-Off - What IPOs Are More Vulnerable?

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Cross Asset Strategy

<ul>
<li>Hong Kong is on track to complete $40 billion in IPOs this year, with demand coming from unicorn tech companies and A-share firms seeking dual listings. </li>
<li>AI, new energy technology, and healthcare will be the leading IPO sectors.  There are 450 companies that have filed for IPOs in Hong Kong in 2026.</li>
<li>With IPO oversubscriptions extremely high, investors are buying peer companies in the same industry, benefiting from spillover or halo effects.  </li>
</ul>


Hong Kong is on track to complete $40 billion in IPOs this year, with demand coming from unicorn tech companies and A-share firms seeking dual listings. 
AI, new energy technology, and healthcare will be the leading IPO sectors.  There are 450 companies that have filed for IPOs in Hong Kong in 2026.
With IPO oversubscriptions extremely high, investors are buying peer companies in the same industry, benefiting from spillover or halo effects.  


HONG KONG IPO WATCH: Follow the Leader Strategy (April 2026)

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

Beijing DeepZero Technology / Index Rebalance

<ul>
<li>HK Connect's September 2026 implementation had 53 ADDs and 15 DELETEs. We review the first implementation week vs history.</li>
<li>ADDs fell in the first implementation week, vs the historical pattern of a first-week gain. Implementation day accounted for most of the average first-week drop.</li>
<li>DELETEs fell further than the historical first-week decline, except Low-vel DELETEs.</li>
</ul>


HK Connect's September 2026 implementation had 53 ADDs and 15 DELETEs. We review the first implementation week vs history.
ADDs fell in the first implementation week, vs the historical pattern of a first-week gain. Implementation day accounted for most of the average first-week drop.
DELETEs fell further than the historical first-week decline, except Low-vel DELETEs.


HSCI / HK Connect Sep 2026: Post-Implementation Review

<ul>
<li>HK Connect implementation will be effective on 7 Sep 2026 before market open, with 53 ADDs and 15 DELETEs.</li>
<li>ADDs gained +5.2% on average over the bridge and DELETEs fell 10.9%. All 15 DELETEs closed the bridge lower.</li>
<li>Historically, positive-bridge ADDs extended their gains in the first implementation week and negative-bridge ADDs were flat. DELETEs kept falling. We place each group in its historical reference set below.</li>
</ul>


HK Connect implementation will be effective on 7 Sep 2026 before market open, with 53 ADDs and 15 DELETEs.
ADDs gained +5.2% on average over the bridge and DELETEs fell 10.9%. All 15 DELETEs closed the bridge lower.
Historically, positive-bridge ADDs extended their gains in the first implementation week and negative-bridge ADDs were flat. DELETEs kept falling. We place each group in its historical reference set below.


HSCI / HK Connect Sep 2026 Implementation: Pre-Implementation Update

<ul>
<li>The September 2026 HSCI review adds 53 names to southbound Connect, 49 new and 4 returning, and removes 15, all effective 7 Sep 2026.</li>
<li>The announced list ran wider than our forecast. 33 of our 36 ADD calls and 14 of 25 DELETE calls were announced.</li>
<li>Current ADDs rose into the announcement and DELETEs fell. Historically, ADD-NEWs outperformed ADD-REJOINs over the bridge, while DELETEs fell further after announcement.</li>
</ul>


The September 2026 HSCI review adds 53 names to southbound Connect, 49 new and 4 returning, and removes 15, all effective 7 Sep 2026.
The announced list ran wider than our forecast. 33 of our 36 ADD calls and 14 of 25 DELETE calls were announced.
Current ADDs rose into the announcement and DELETEs fell. Historically, ADD-NEWs outperformed ADD-REJOINs over the bridge, while DELETEs fell further after announcement.


HSCI / HK Connect Sep 2026 Rebalance: Post-Announcement Positioning

China

Epiworld International Co., Ltd. engages in the research and development, production, and sales of silicon carbide (SiC) semiconductor epitaxial wafers. The company offers commercial 3-, 4-, 6-, and 8-inch SiC epitaxial wafers, which are utilized in power devices for applications such as electric vehicles, renewable energy, and AI computing. Epiworld International was founded in 2011 and is headquartered in Xiamen, China.

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Epiworld International (2726 HK)

HK Strategy: The Imminent Sell-Off - What IPOs Are More Vulnerable?

The US market collapse on Friday will trigger panic in Asian markets. HK IPOs like Knowledge Atlas, Beijing Deepzero, GigaDevice Semiconductor,...

Osbert Tang, CFA

HONG KONG IPO WATCH: Follow the Leader Strategy (April 2026)

KB Laminates (1888 HK) has gained 90% since our April report on the following-the-leader strategy. Kingboard Holdings (148 HK) holds a 70% stake...

David Mudd

HSCI / HK Connect Sep 2026: Post-Implementation Review

HK Connect Sep 2026 implementation has passed the first post-implementation week. We review what worked, what did not, and how current results...

Ke Yan, CFA, FRM

HSCI / HK Connect Sep 2026 Implementation: Pre-Implementation Update

HK Connect enters implementation on 7 Sep 2026. We update stock performance since the HSCI announcement and discuss the implementation trade.

Ke Yan, CFA, FRM

HSCI / HK Connect Sep 2026 Rebalance: Post-Announcement Positioning

HSIL announced the September review result on 21 Aug 2026 after market close. We forecast 53 southbound Connect ADDs and 15 DELETEs. We review the...

Ke Yan, CFA, FRM

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HK Strategy: The Imminent Sell-Off - What IPOs Are More Vulnerable?

​The US market collapse on Friday will trigger panic in Asian markets. HK IPOs like Knowledge Atlas, Beijing Deepzero, GigaDevice Semiconductor,...

Osbert Tang, CFA

HONG KONG IPO WATCH: Follow the Leader Strategy (April 2026)

KB Laminates (1888 HK) has gained 90% since our April report on the following-the-leader strategy. Kingboard Holdings (148 HK) holds a 70% stake...

David Mudd

HSCI / HK Connect Sep 2026: Post-Implementation Review

HK Connect Sep 2026 implementation has passed the first post-implementation week. We review what worked, what did not, and how current results...

Ke Yan, CFA, FRM

HSCI / HK Connect Sep 2026 Implementation: Pre-Implementation Update

HK Connect enters implementation on 7 Sep 2026. We update stock performance since the HSCI announcement and discuss the implementation trade.

Ke Yan, CFA, FRM

HSCI / HK Connect Sep 2026 Rebalance: Post-Announcement Positioning

HSIL announced the September review result on 21 Aug 2026 after market close. We forecast 53 southbound Connect ADDs and 15 DELETEs. We review the...

Ke Yan, CFA, FRM

The US market collapse on Friday will trigger panic in Asian markets. HK IPOs like Knowledge Atlas, Beijing Deepzero, GigaDevice Semiconductor,...