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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 21 May. The constituent changes will be effective after the close of trading on 4 June.For the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a>, there are 2 inclusions and 3 exclusions. This brings the number of index constituents back down to 30.The inclusions are Autohome (2518 HK) and <a href="https://www.smartkarma.com/entities/bilibili-inc-83a27302-cd7d-4e6a-a1de-bcf93eb022c3" target="_blank" data-smartkarma-citation="entities:32215:1" rel="noopener">Bilibili Inc (9626 HK)</a> while the deletions are <a href="https://www.smartkarma.com/entities/zte-corp-h" target="_blank" data-smartkarma-citation="entities:6922:1" rel="noopener">ZTE Corp H (763 HK)</a>, <a href="https://www.smartkarma.com/entities/fit-hon-teng-ltd" target="_blank" data-smartkarma-citation="entities:22868:1" rel="noopener">Fit Hon Teng (6088 HK)</a> and <a href="https://www.smartkarma.com/entities/archosaur-games" target="_blank" data-smartkarma-citation="entities:28948:1" rel="noopener">Archosaur Games (9990 HK)</a>.The inclusion of Autohome (2518 HK) is a surprise and so is the corresponding deletion of <a href="https://www.smartkarma.com/entities/fit-hon-teng-ltd" target="_blank" data-smartkarma-citation="entities:22868:1" rel="noopener">Fit Hon Teng (6088 HK)</a>. With a large impact on both names, these are the ones to watch for. One-way turnover is estimated at 5.61% and will result in a one-way trade of HK$1.41bn.There are 10 trading days to implementation of the changes. The largest passive flows will go to <a href="https://www.smartkarma.com/entities/bilibili-inc-83a27302-cd7d-4e6a-a1de-bcf93eb022c3" target="_blank" data-smartkarma-citation="entities:32215:1" rel="noopener">Bilibili Inc (9626 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>, <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> while there will be outflows from <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/zte-corp-h" target="_blank" data-smartkarma-citation="entities:6922:1" rel="noopener">ZTE Corp H (763 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> and <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>.

The Hang Seng Indexes Company Limited (HSIL) announced the results of its review of the Hang Seng Family of Indexes post market close on 21 May. The constituent changes will be effective after the close of trading on 4 June.For the Hang Seng Tech Index (HSTECH INDEX), there are 2 inclusions and 3 exclusions. This brings the number of index constituents back down to 30.The inclusions are Autohome (2518 HK) and Bilibili Inc (9626 HK) while the deletions are ZTE Corp H (763 HK), Fit Hon Teng (6088 HK) and Archosaur Games (9990 HK).The inclusion of Autohome (2518 HK) is a surprise and so is the corresponding deletion of Fit Hon Teng (6088 HK). With a large impact on both names, these are the ones to watch for. One-way turnover is estimated at 5.61% and will result in a one-way trade of HK$1.41bn.There are 10 trading days to implementation of the changes. The largest passive flows will go to Bilibili Inc (9626 HK), Kuaishou Technology (1024 HK), Meituan (3690 HK) and Tencent (700 HK) while there will be outflows from Xiaomi Corp (1810 HK), ZTE Corp H (763 HK), Alibaba Group (9988 HK) and JD Health (6618 HK).

HSTECH Index Rebalance: Back to 30 with 2 Adds and 3 Deletes

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

Equity Capital Markets

Since inception of our IPO research in 2015, the Aequitas Research team has covered over 361 IPOs, which raised over US$100m each, across Asia Pacific (excluding Korea and China A-shares) and the US (Asia linked listings).For this insight, we used data from our IPO framework, the prospectus, company filings and market data to analyse 244 IPOs across Developed and Emerging Asia Pacific (excluding Korea and China A-shares) that took place over 2016-18. Our results are split across two insights.In this insight we looked at the country and GICS level IPO performance over 2016-18. We also analysed the variance between the first week and three month performance to decide whether buying orphans is better than sticking to winners. Some of our key findings include:<ul><li>Overall IPOs have provided an average 4.8% return at the end of the first week, some geographies like India and Thailand have clearly outperformed with average returns of over 10%.</li><li>IPOs in Hong Kong despite topping the list with the most number of deals, provided only 2.4% average returns.</li><li>In terms of sectors, Financial and Real Estate sectors have been the biggest capital guzzlers in the region. While Healthcare has been the consistent underperformer across geographies over the first few months.</li><li>Incremental returns are higher from holding on to winners than from trying to bet on losers turning around, both in terms of the percentage of such cases and in terms of the average returns overall.</li></ul>In our second insight, we’ll analyse the best and worst bookrunners by country, corporate governance impact on listing performance, earnings and liquidity analysis. Our key findings include:<ul><li>Some of the biggest names in Investment Banking, one American bank in particular, has by far the lousiest record of providing investor returns from IPOs in this region</li><li>IPOs without any corporate governance issues outperformed the ones with a few issues by 9% on the first day and over the first month. Deals with related party issues and cash/dividend payout prior to listing, performed the worst on average.</li><li>Sales estimates at the time of IPO appear to be a lot more reliable than the net income estimates. The latter has a bias towards being revised downwards much more so than the sales estimates. Target price changes seem to mirror share price movements and were largely out of sync with earnings revisions.</li><li>In terms of volume traded as percentage of shares offered, deals that did well on an average trade 2.5x more than deals that were under water. India had the highest proportion of shares being flipped owing to the high allocation to retail and HNIs while Australia had the lowest liquidity.</li></ul>This report has been prepared by the entire Aequitas Research Team:  <a href="https://www.smartkarma.com/profiles/9" target="_blank" data-smartkarma-citation="accounts:9">Ke Yan, CFA, FRM</a>, <a href="https://www.smartkarma.com/profiles/673" target="_blank" data-smartkarma-citation="accounts:673">Zhen Zhou, Toh</a> and  <a href="https://www.smartkarma.com/profiles/4" target="_blank" data-smartkarma-citation="accounts:4">Sumeet Singh</a>.

Since inception of our IPO research in 2015, the Aequitas Research team has covered over 361 IPOs, which raised over US$100m each, across Asia Pacific (excluding Korea and China A-shares) and the US (Asia linked listings).For this insight, we used data from our IPO framework, the prospectus, company filings and market data to analyse 244 IPOs across Developed and Emerging Asia Pacific (excluding Korea and China A-shares) that took place over 2016-18. Our results are split across two insights.In this insight we looked at the country and GICS level IPO performance over 2016-18. We also analysed the variance between the first week and three month performance to decide whether buying orphans is better than sticking to winners. Some of our key findings include:Overall IPOs have provided an average 4.8% return at the end of the first week, some geographies like India and Thailand have clearly outperformed with average returns of over 10%.IPOs in Hong Kong despite topping the list with the most number of deals, provided only 2.4% average returns.In terms of sectors, Financial and Real Estate sectors have been the biggest capital guzzlers in the region. While Healthcare has been the consistent underperformer across geographies over the first few months.Incremental returns are higher from holding on to winners than from trying to bet on losers turning around, both in terms of the percentage of such cases and in terms of the average returns overall.In our second insight, we’ll analyse the best and worst bookrunners by country, corporate governance impact on listing performance, earnings and liquidity analysis. Our key findings include:Some of the biggest names in Investment Banking, one American bank in particular, has by far the lousiest record of providing investor returns from IPOs in this regionIPOs without any corporate governance issues outperformed the ones with a few issues by 9% on the first day and over the first month. Deals with related party issues and cash/dividend payout prior to listing, performed the worst on average.Sales estimates at the time of IPO appear to be a lot more reliable than the net income estimates. The latter has a bias towards being revised downwards much more so than the sales estimates. Target price changes seem to mirror share price movements and were largely out of sync with earnings revisions.In terms of volume traded as percentage of shares offered, deals that did well on an average trade 2.5x more than deals that were under water. India had the highest proportion of shares being flipped owing to the high allocation to retail and HNIs while Australia had the lowest liquidity.This report has been prepared by the entire Aequitas Research Team:  Ke Yan, CFA, FRM, Zhen Zhou, Toh and  Sumeet Singh.

IPO Analytics: Cut Your Losses and Let Your Profits Run, Holds True for IPOs

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

DZT Research

DZT 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.

Since we published our first annual HK IPO analysis (<a href="https://www.smartkarma.com/insights/5-key-charts-to-wrap-up-2015-hk-ipo-broker-sector-and-retail-analytics" target="_blank" data-smartkarma-citation="insights:2730">5 Key Charts to Wrap-Up 2015 HK IPO - Broker, Sector, and Retail Analytics</a>) in Feb 2015, it has been a handy analytical reference for us. We published our statistical insights for 2016 listings (<a href="https://www.smartkarma.com/insights/broker-sector-and-retail-analytics-of-2016-hk-ipo" target="_blank" data-smartkarma-citation="insights:7916">Broker, Sector and Retail Analytics of 2016 HK IPOs</a>) as well.We continue our effort to provide insightful data analytics for our readers. You are strongly encouraged to add this insight to your locker if you intend to refer to it frequently in 2018.In…

Since we published our first annual HK IPO analysis (5 Key Charts to Wrap-Up 2015 HK IPO - Broker, Sector, and Retail Analytics) in Feb 2015, it has been a handy analytical reference for us. We published our statistical insights for 2016 listings (Broker, Sector and Retail Analytics of 2016 HK IPOs) as well.We continue our effort to provide insightful data analytics for our readers. You are strongly encouraged to add this insight to your locker if you intend to refer to it frequently in 2018.In…

2017 HK IPOs Analytics: Good Deals Don't Need Cornerstones

APAC IPOs & Placements

Zhen Zhou, Toh

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

In this insight, we break down the ECM team's calls and returns for 2017 to give readers a sense of how we have performed.  You can find the the details of how we determine correct and wrong calls for IPOs and placements at the end of this note.<h2>Overall hit rate</h2><ul>
<li>In 2017, we covered 90 IPOs and 136 placements across Asia-Pacific (including some Asia linked US listings).</li>
<li>Due to the increase in deal flow in 2017, we worked on 20 more IPOs as compared to 2016 and 61 more placements.</li>
<li>Overall we had a hit…</li>
</ul>

In this insight, we break down the ECM team's calls and returns for 2017 to give readers a sense of how we have performed.  You can find the the details of how we determine correct and wrong calls for IPOs and placements at the end of this note.Overall hit rate
In 2017, we covered 90 IPOs and 136 placements across Asia-Pacific (including some Asia linked US listings).
Due to the increase in deal flow in 2017, we worked on 20 more IPOs as compared to 2016 and 61 more placements.
Overall we had a hit…


The Smartkarma ECM Team puts out a weekly update on the deals we have covered recently, along with updates for upcoming IPOs.<div class="content-highlight">
This week's listings did far better than our expectation. <a href="https://www.smartkarma.com/entities/22868" target="_blank" data-smartkarma-citation="entities:22868:1">FIT Hon Teng (6088 HK)</a> rallied 40.7% above IPO price after a relatively slow while <a href="https://www.smartkarma.com/entities/23996" target="_blank" data-smartkarma-citation="entities:23996:1">B Grimm Power (BGRIM TB)</a> closed 18.1% above IPO price is a similar fashion. On the other hand, <a href="https://www.smartkarma.com/entities/23683" target="_blank" data-smartkarma-citation="entities:23683:1">NetLink NBN Trust (NETLINK SP)</a> made a tepid debut.
However, it seems like the market has been overly optimistic on FIT Hon Teng as it…
</div>

The Smartkarma ECM Team puts out a weekly update on the deals we have covered recently, along with updates for upcoming IPOs.
This week's listings did far better than our expectation. FIT Hon Teng (6088 HK) rallied 40.7% above IPO price after a relatively slow while B Grimm Power (BGRIM TB) closed 18.1% above IPO price is a similar fashion. On the other hand, NetLink NBN Trust (NETLINK SP) made a tepid debut.
However, it seems like the market has been overly optimistic on FIT Hon Teng as it…


Smartkarma: ECM Coverage Weekly Update (22 July 2017)

Taiwan

FIT Hon Teng Limited designs, develops, produces, and sells interconnect solutions and related products, including electronic and optoelectronic connectors, antennas, acoustic components, cables, and modules. The company serves industries such as communications infrastructure, consumer electronics, mobile devices, automotive, industrial, and medical. It was established in 2013 and is headquartered in New Taipei City, Taiwan.

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FIT Hon Teng (6088 HK)

HSTECH Index Rebalance: Back to 30 with 2 Adds and 3 Deletes

There are 2 adds and 3 deletes for the HSTECH Index. One-way turnover is estimated at 5.61% and will result in a one-way trade of HK$1.41bn. 2518...

Brian Freitas

IPO Analytics: Cut Your Losses and Let Your Profits Run, Holds True for IPOs

Since inception of our IPO research in 2015, the Aequitas Research team has covered over 361 IPOs, which raised over US$100m each, across Asia...

Sumeet Singh

2017 HK IPOs Analytics: Good Deals Don't Need Cornerstones

Since we published our first annual HK IPO analysis (5 Key Charts to Wrap-Up 2015 HK IPO - Broker, Sector, and Retail Analytics) in Feb 2015, it...

Ke Yan, CFA, FRM

2017 Smartkarma ECM Results Round-Up

In this insight, we break down the ECM team's calls and returns for 2017 to give readers a sense of how we have performed. You can find the the...

Zhen Zhou, Toh

Smartkarma: ECM Coverage Weekly Update (22 July 2017)

The Smartkarma ECM Team puts out a weekly update on the deals we have covered recently, along with updates for upcoming IPOs. This week's listings...

Zhen Zhou, Toh

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