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 analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jun 6th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Kuaishou (1024 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Cosco Shipping (1919 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Jun 6th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Kuaishou (1024 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Cosco Shipping (1919 HK).


Hong Kong Buybacks Weekly (Jun 6th): Tencent, AIA, Kuaishou

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<ul>
<li>Softcare has established its core competitiveness of "low price + localization", and has achieved success in Africa. Softcare hopes to replicate its business model in Africa to other markets.</li>
<li>Emerging Markets have seen sustained growth in market penetration of baby/feminine hygiene products. We’re optimistic about Softcare's future performance growth due to “demographic dividend + consumption upgrade” in Emerging Markets.</li>
<li>Softcare has strong fundamentals and promising outlook. We think valuation of Softcare should be higher than <a href="https://www.smartkarma.com/entities/hengan-international-group-co-ltd" target="_blank" data-smartkarma-citation="entities:29:1" rel="noopener">Hengan International Group (1044 HK)</a> due to higher profit margin and future growth potential.</li>
</ul>


Softcare has established its core competitiveness of "low price + localization", and has achieved success in Africa. Softcare hopes to replicate its business model in Africa to other markets.
Emerging Markets have seen sustained growth in market penetration of baby/feminine hygiene products. We’re optimistic about Softcare's future performance growth due to “demographic dividend + consumption upgrade” in Emerging Markets.
Softcare has strong fundamentals and promising outlook. We think valuation of Softcare should be higher than Hengan International Group (1044 HK) due to higher profit margin and future growth potential.


Pre-IPO Softcare - Strong Performance Growth Momentum Would Continue

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>Post market close on Friday, Hang Seng Indexes will announce the changes for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> that will be implemented at the close on 6 June.</li>
<li>With no constituent changes, one-way turnover will be 1.9% with 3 stocks being capped and FAF changes for a few stocks due to a methodology change for Secondary Listings. </li>
<li>We highlight 7 stocks that have a higher probability of being added to the index. Everything depends on the index committee, and we would not be surprised by zero changes.</li>
</ul>


Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 June.
With no constituent changes, one-way turnover will be 1.9% with 3 stocks being capped and FAF changes for a few stocks due to a methodology change for Secondary Listings. 
We highlight 7 stocks that have a higher probability of being added to the index. Everything depends on the index committee, and we would not be surprised by zero changes.


Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June25

Soft International Group / Equity Capital Markets

<ul>
<li>The competition intensity of the industry in which Soft International's main business operates is expected to remain high in the future. The growth rate of major markets will maintain low.</li>
<li>Soft International’s performance has shown a downward trend as it enters 2024.This is not good news for capital markets that prioritize performance sustainability.P/E of 10x is a suitable valuation level</li>
<li>Our forecast is that Soft International’s revenue could reach RMB750-800 million in 2025 and RMB850-950 million in 2026, with CAGR of 10%-15%.Net profit margin may remain low at single digit.</li>
</ul>


The competition intensity of the industry in which Soft International's main business operates is expected to remain high in the future. The growth rate of major markets will maintain low.
Soft International’s performance has shown a downward trend as it enters 2024.This is not good news for capital markets that prioritize performance sustainability.P/E of 10x is a suitable valuation level
Our forecast is that Soft International’s revenue could reach RMB750-800 million in 2025 and RMB850-950 million in 2026, with CAGR of 10%-15%.Net profit margin may remain low at single digit.


Pre-IPO Soft International Group (PHIP Updates) - Some Points Worth the Attention

Event-Driven

<ul>
<li>Post market close on Friday, Hang Seng Indexes will announce the changes for the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index (HSI INDEX)</a> that will be implemented at the close on 7 March.</li>
<li>With no constituent changes, one-way turnover will be 2.75% with 3 stocks being capped downward. This gives the index committee the opportunity to add more stocks without significantly increasing turnover.</li>
<li>The return of the high and medium probability inclusions has matched the performance of the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hang Seng Index</a> over the last few months, Shorts have climbed in some names.</li>
</ul>


Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 7 March.
With no constituent changes, one-way turnover will be 2.75% with 3 stocks being capped downward. This gives the index committee the opportunity to add more stocks without significantly increasing turnover.
The return of the high and medium probability inclusions has matched the performance of the Hang Seng Index over the last few months, Shorts have climbed in some names.


Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

China

Hengan International Group is a leading Chinese manufacturer and distributor of personal hygiene and household paper products. Its core offerings include sanitary napkins, baby and adult diapers, and various tissue paper products. The company was founded in 1985 and is headquartered in Jinjiang City, Fujian, China.

Price Gauge
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Hengan International (1044 HK)

Hong Kong Buybacks Weekly (Jun 6th): Tencent, AIA, Kuaishou

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

Pre-IPO Softcare - Strong Performance Growth Momentum Would Continue

Softcare's successful low price + localization business model in Africa will be replicated in other markets, with optimism for growth in Emerging...

Xinyao (Criss) Wang

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June25

We highlight 7 potential inclusions for the HSI in June, though the index committee could make no changes as we have seen in the past. Pop Mart...

Brian Freitas

Pre-IPO Soft International Group (PHIP Updates) - Some Points Worth the Attention

Soft International faces high competition and slow market growth, with declining performance in 2024. Single-digit net profit margin is...

Xinyao (Criss) Wang

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

We highlight 9 potential inclusions to the HSI in March. Downward capping on Tencent and Alibaba gives the index committee an opportunity to add...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Hong Kong Buybacks Weekly (Jun 6th): Tencent, AIA, Kuaishou

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

Pre-IPO Softcare - Strong Performance Growth Momentum Would Continue

​Softcare's successful low price + localization business model in Africa will be replicated in other markets, with optimism for growth in Emerging...

Xinyao (Criss) Wang

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for June25

We highlight 7 potential inclusions for the HSI in June, though the index committee could make no changes as we have seen in the past. Pop Mart...

Brian Freitas

Pre-IPO Soft International Group (PHIP Updates) - Some Points Worth the Attention

​Soft International faces high competition and slow market growth, with declining performance in 2024. Single-digit net profit margin is...

Xinyao (Criss) Wang

Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for March

We highlight 9 potential inclusions to the HSI in March. Downward capping on Tencent and Alibaba gives the index committee an opportunity to add...

Brian Freitas

Softcare's successful low price + localization business model in Africa will be replicated in other markets, with optimism for growth in Emerging...

Soft International faces high competition and slow market growth, with declining performance in 2024. Single-digit net profit margin is...