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.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 120.6% as of Jul 7th.</li>
<li>The average A-H premium changed by 5.9ppt week on week, led by consumer staples, consumer discretionary, energy.</li>
<li>We highlight weekly changes in A-H premium for BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan, Yankuang Energy, New China Life.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 120.6% as of Jul 7th.
The average A-H premium changed by 5.9ppt week on week, led by consumer staples, consumer discretionary, energy.
We highlight weekly changes in A-H premium for BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan, Yankuang Energy, New China Life.


A-H Premium Weekly (Jul 7th): BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Guangzhou Baiyunshan Pharmaceu / Equity Bottom-Up

Guangzhou Baiyunshan Pharmaceu (600332 CH)

<ul>
<li>Baiyunshan is not a typical TCM company. As Great Commerce accounts for the majority of revenue, it clearly drags down the quality of total assets and growth expectation for valuation.</li>
<li>As Jin Ge and Wang Lao Ji are facing different challenges, the overall growth/profitability of Baiyunshan is under pressure.Due to uncompetitive product line, Baiyunshan’s future growth appears to lack momentum.</li>
<li>The valuation of Baiyunshan-A share is still expensive, but Baiyunshan-H share is attractive. After all, the future consumption recovery would be beneficial for boosting Baiyunshan’s valuation. Then, trading opportunity occurs. </li>
</ul>


Baiyunshan is not a typical TCM company. As Great Commerce accounts for the majority of revenue, it clearly drags down the quality of total assets and growth expectation for valuation.
As Jin Ge and Wang Lao Ji are facing different challenges, the overall growth/profitability of Baiyunshan is under pressure.Due to uncompetitive product line, Baiyunshan’s future growth appears to lack momentum.
The valuation of Baiyunshan-A share is still expensive, but Baiyunshan-H share is attractive. After all, the future consumption recovery would be beneficial for boosting Baiyunshan’s valuation. Then, trading opportunity occurs. 


Guangzhou Baiyunshan Pharmaceutical (874.HK) - When Valuation Is Low Enough, Drawbacks Are Tolerable

<ul>
<li>The results of National TCM VBP were released, with average price reduction of 49.36%, involving multiple large varieties with sales over RMB1 billion and exclusive products from many listed companies.</li>
<li>CDE will move closer to the FDA's standard for approving new drugs. So, pharmaceutical companies need to update clinical strategies timely according to the situation, otherwise unexpected events may occur.</li>
<li>We analyzed some key points about <a href="https://www.smartkarma.com/entities/hua-medicine" target="_blank" data-smartkarma-citation="entities:27410:1" rel="noopener">Hua Medicine Ltd (2552 HK)</a>. We think its core drug Dorzagliatin still has many uncertainties that are worth investors' attention.</li>
</ul>


The results of National TCM VBP were released, with average price reduction of 49.36%, involving multiple large varieties with sales over RMB1 billion and exclusive products from many listed companies.
CDE will move closer to the FDA's standard for approving new drugs. So, pharmaceutical companies need to update clinical strategies timely according to the situation, otherwise unexpected events may occur.
We analyzed some key points about Hua Medicine Ltd (2552 HK). We think its core drug Dorzagliatin still has many uncertainties that are worth investors' attention.


China Healthcare Weekly (Jun.23) - National TCM VBP Results, CDE Changes Game Rule, Hua Medicine

<ul>
<li>We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 113.6% as of May 26th.</li>
<li>The average A-H premium changed by 2.3ppt week on week, led by information technology, utilities, consumer discretionary and offset by financials.</li>
<li>We highlight weekly changes in A-H premium for Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng, CSSC Offshore, Shanghai Fudan, China Life, Flat Glass, CCCC.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 113.6% as of May 26th.
The average A-H premium changed by 2.3ppt week on week, led by information technology, utilities, consumer discretionary and offset by financials.
We highlight weekly changes in A-H premium for Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng, CSSC Offshore, Shanghai Fudan, China Life, Flat Glass, CCCC.


A-H Premium Weekly (May 26th): Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>There are 18 changes for the SSE180 Index that will be implemented at the close of trading on 9 June.</li>
<li>The impact on the stocks is small but this is not a widely tracked index, so there could still be opportunities for some high risk/reward basket trades.</li>
<li>With Northbound Stock Connect eligibility no longer drawing on the SSE180 Index constituents, the index could lose relevance over time.</li>
</ul>


There are 18 changes for the SSE180 Index that will be implemented at the close of trading on 9 June.
The impact on the stocks is small but this is not a widely tracked index, so there could still be opportunities for some high risk/reward basket trades.
With Northbound Stock Connect eligibility no longer drawing on the SSE180 Index constituents, the index could lose relevance over time.


SSE180 Index Rebalance: Small Impact but Not Widely Tracked

China

Guangzhou Baiyunshan Pharmaceutical Holdings Co., Ltd. manufactures and sells Chinese patent medicine. The Company also wholesales, retails, imports, and exports Western and Chinese pharmaceutical products and various medical apparatus.

Price Gauge
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Guangzhou Baiyunshan Pharmaceu (600332 CH)

A-H Premium Weekly (Jul 7th): BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan

We analyzed A-H premium changes in the past week and highlight A-H premium changes for BankComm, ICBC, CCB, BYD, Asymchem, Hisense, Baiyunshan,...

Ke Yan, CFA, FRM

Guangzhou Baiyunshan Pharmaceutical (874.HK) - When Valuation Is Low Enough, Drawbacks Are Tolerable

Due to the special "positioning" of Baiyunshan's business, the market's enthusiasm for the company is not high. But when its valuation is low...

Xinyao (Criss) Wang

China Healthcare Weekly (Jun.23) - National TCM VBP Results, CDE Changes Game Rule, Hua Medicine

Results of National TCM VBP were released, involving some big varieties. CDE changes game rule on drug approva. Companies has to change clinical...

Xinyao (Criss) Wang

A-H Premium Weekly (May 26th): Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Shandong Gold, China Longyuan, BYD, Shenhua, China Minsheng.

Ke Yan, CFA, FRM

SSE180 Index Rebalance: Small Impact but Not Widely Tracked

There are 18 changes for the SSE180 Index in June. The index is not widely tracked and there could be opportunities for long/short basket trades...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)