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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/great-wall-motor-co-ltd-cb302af9-398c-4d2d-ba39-023e43287eef" target="_blank" data-smartkarma-citation="entities:128:1" rel="noopener">Great Wall Motor (2333 HK)</a> could replace <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> in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> at the June rebalance. The review period ends 31 March.</li>
<li>
<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 (9626 HK)</a> is a close add while <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> is a close delete. Stock prices moves over the next 3 weeks will decide on the changes.</li>
<li>Passive HSCEI Index trackers will need to buy 1.74 days of ADV on Great Wall Motor (2333 HK) and sell over 3 days of ADV on Hansoh Pharmaceutical (3692 HK).</li>
</ul>



Great Wall Motor (2333 HK) could replace Hansoh Pharmaceutical (3692 HK) in the Hang Seng China Enterprises Index (HSCEI INDEX) at the June rebalance. The review period ends 31 March.

Bilibili (9626 HK) is a close add while Sunac China Holdings (1918 HK) is a close delete. Stock prices moves over the next 3 weeks will decide on the changes.
Passive HSCEI Index trackers will need to buy 1.74 days of ADV on Great Wall Motor (2333 HK) and sell over 3 days of ADV on Hansoh Pharmaceutical (3692 HK).


HSCEI Index Rebalance Preview (June): Great Wall Motor (2333) Should Replace Hansoh Pharma (3692)

Event-Driven

Hang Seng China Enterprises Index / Event-Driven

<ul>
<li>The HSCEI 2022 dividend futures are trading around our fair value. Larger than expected special dividends from oil and telecom companies could provide some upside.</li>
<li>The HSCEI 2022/23 div steepener has dropped from -5 to -15 since our last Insight. We see further downside here and would look to add to shorts in the spread.</li>
<li>With rising interest rates, higher inflation, higher oil prices, a slowdown could lead to a rapid repricing of dividends and there will be opportunities to buy back the spread lower.</li>
</ul>


The HSCEI 2022 dividend futures are trading around our fair value. Larger than expected special dividends from oil and telecom companies could provide some upside.
The HSCEI 2022/23 div steepener has dropped from -5 to -15 since our last Insight. We see further downside here and would look to add to shorts in the spread.
With rising interest rates, higher inflation, higher oil prices, a slowdown could lead to a rapid repricing of dividends and there will be opportunities to buy back the spread lower.


HSCEI Dividend Futures: Stay Short the 2022/23 Steepener

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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

<ul>
<li>Lepu Biopharma is a biotech spin-off of A-share listed Lepu Medical. The company launched book building to raise up to USD 120m via a Hong Kong listing.</li>
<li>In our previous note, we look at the company's core products, including HX008, LP002, MRG003 and MRG002. The products have their own differentiating factors to tackle the intense competition.</li>
<li>In this note, we provide an update for the book building. We will run the deal through our ECM framework and provide an update on the deal.</li>
</ul>


Lepu Biopharma is a biotech spin-off of A-share listed Lepu Medical. The company launched book building to raise up to USD 120m via a Hong Kong listing.
In our previous note, we look at the company's core products, including HX008, LP002, MRG003 and MRG002. The products have their own differentiating factors to tackle the intense competition.
In this note, we provide an update for the book building. We will run the deal through our ECM framework and provide an update on the deal.


Lepu Biopharma (乐普生物科技) IPO: Sentiment Cooled Down

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Betta Pharmaceuticals   / Equity Capital Markets

<ul>
<li>If the R&amp;D pipeline projects are not recognized by international capital,the main reason could be either the product development progress is lagging behind or the projects are not good enough.</li>
<li>The real innovative drugs would not be affected by generics that easily, and are to overturn the size of the old drug market.</li>
<li>The real risk of Betta would be revealed in the next few years as VBP promotes. So, we are conservative about the Company’s outlook at the current stage.</li>
</ul>


If the R&amp;D pipeline projects are not recognized by international capital,the main reason could be either the product development progress is lagging behind or the projects are not good enough.
The real innovative drugs would not be affected by generics that easily, and are to overturn the size of the old drug market.
The real risk of Betta would be revealed in the next few years as VBP promotes. So, we are conservative about the Company’s outlook at the current stage.


Pre-IPO Betta Pharmaceuticals - Lack of Staying Power

Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Simcere Pharmaceutical Group / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/simcere-pharmaceutical-group" target="_blank" data-smartkarma-citation="entities:29186:1" rel="noopener">Simcere Pharmaceutical Group (2096 HK)</a> is transitioning to an innovation and R&amp;D-driven pharmaceutical company, with revenue from innovative pharmaceuticals making greater contribution and R&amp;D pipeline of innovative pharmaceuticals advancing rapidly.</li>
<li>During H1 2021, Simcere newly added 5 pivotal registrational trials and phase III clinical trials and 1 phase I clinical trial, and received 7 clinical trial approvals.</li>
<li>Simcere entered into three international partnerships to develop and market innovative drugs in China. The company has also in-licensed an oral COVID-19 drug candidate, which is in pre-clinical stage.</li>
</ul>



Simcere Pharmaceutical Group (2096 HK) is transitioning to an innovation and R&amp;D-driven pharmaceutical company, with revenue from innovative pharmaceuticals making greater contribution and R&amp;D pipeline of innovative pharmaceuticals advancing rapidly.
During H1 2021, Simcere newly added 5 pivotal registrational trials and phase III clinical trials and 1 phase I clinical trial, and received 7 clinical trial approvals.
Simcere entered into three international partnerships to develop and market innovative drugs in China. The company has also in-licensed an oral COVID-19 drug candidate, which is in pre-clinical stage.


Simcere Pharmaceutical (2096 HK): Focus Shifts to Innovative Drug; COVID-19 Oral Drug in Development

China

Hansoh Pharmaceutical Group Company Limited operates as a pharmaceutical company. The Company manufactures and sells anti-infectives, anti-neoplastic agents, diabetes drugs, and other products. Hansoh Pharmaceutical Group markets its products throughout China.

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Hansoh Pharmaceutical Group (3692 HK)

HSCEI Index Rebalance Preview (June): Great Wall Motor (2333) Should Replace Hansoh Pharma (3692)

Great Wall Motor (2333) should replace Hansoh Pharma (3692) in the HSCEI at the June rebalance. Bilibili is a close add in case Sunac is deleted....

Brian Freitas

HSCEI Dividend Futures: Stay Short the 2022/23 Steepener

We see the HSCEI 2022 div futures trading in line with our estimates while there could be more downside to the 2022/23 div spread. We'd look to get...

Brian Freitas

Lepu Biopharma (乐普生物科技) IPO: Sentiment Cooled Down

Downsized deal amid cooled sentiment for Chapter 18A, we think the valuation of Lepu Biopharm is not attractive for investors.

Ke Yan, CFA, FRM

Pre-IPO Betta Pharmaceuticals - Lack of Staying Power

The insight analyzed Betta about key products such as Icotinib, Ensartinib, MIL60, CM082, concerns on slow product iteration,fierce...

Xinyao (Criss) Wang

Simcere Pharmaceutical (2096 HK): Focus Shifts to Innovative Drug; COVID-19 Oral Drug in Development

Simcere is expected to continue strong performance driven by increasing contribution of innovative drugs. Rich pipeline entails visibility. The...

Tina Banerjee

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