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

Event-Driven

<ul>
<li>There are currently 76 index constituents and we can (maybe? finally! hopefully 🤞) get to 80 members in March before commencing the next leg up to 100 index constituents.</li>
<li>We list 10 potential inclusions to the index in March. Adding all 10 stocks will lead to over 6% one-way turnover, so there will be fewer inclusions.</li>
<li>All stocks will have over 1 day of ADV to buy from passive trackers. Some stocks have short interest of over 7% of float.</li>
</ul>


There are currently 76 index constituents and we can (maybe? finally! hopefully 🤞) get to 80 members in March before commencing the next leg up to 100 index constituents.
We list 10 potential inclusions to the index in March. Adding all 10 stocks will lead to over 6% one-way turnover, so there will be fewer inclusions.
All stocks will have over 1 day of ADV to buy from passive trackers. Some stocks have short interest of over 7% of float.


HSI Index Rebalance Preview: Better Late Than Never?

HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>Many have missed out on the 14%, or 2,300 points, rally of the HSI in the last 9 trading days. There are still several stocks that look interesting now.</li>
<li>
<a href="https://www.smartkarma.com/entities/li-auto-inc-3dbe6187-544f-40dd-b9f9-72fba9c0110e" target="_blank" data-smartkarma-citation="entities:33811:1" rel="noopener">Li Auto (2015 HK)</a>, <a href="https://www.smartkarma.com/entities/link-reit" target="_blank" data-smartkarma-citation="entities:872:1" rel="noopener">Link REIT (823 HK)</a>, <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>, <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> and <a href="https://www.smartkarma.com/entities/galaxy-entertainment-group-limited" target="_blank" data-smartkarma-citation="entities:806:1" rel="noopener">Galaxy Entertainment Group (27 HK)</a> are massive laggards YTD.</li>
<li>As they have only experienced limited rebounds from the 19-Apr trough, they are set to catch up. Also, their earnings prospects look positive this year. </li>
</ul>


Many have missed out on the 14%, or 2,300 points, rally of the HSI in the last 9 trading days. There are still several stocks that look interesting now.

Li Auto (2015 HK), Link REIT (823 HK), China Mengniu Dairy Co (2319 HK), Hang Lung Properties (101 HK) and Galaxy Entertainment Group (27 HK) are massive laggards YTD.
As they have only experienced limited rebounds from the 19-Apr trough, they are set to catch up. Also, their earnings prospects look positive this year. 


HK Strategy: Where Are the Short-Term Opportunities?

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

LANTIAN Group Holdings / Equity Capital Markets

<ul>
<li>The industry in which LANTIAN operates has basically bid farewell to the era of high-speed growth. The baby diaper products market is nearing saturation, with limited future growth potential.</li>
<li>The economy baby diaper products market is the last segment to bring alpha. However, it’s not easy for LANTIAN to break through considering strong international big names and local brands.</li>
<li>Profit margin of LANTIAN is low. If this is the characteristic of this industry, then baby diaper products isn’t a profitable business.Investors could have other options to achieve higher returns.</li>
</ul>


The industry in which LANTIAN operates has basically bid farewell to the era of high-speed growth. The baby diaper products market is nearing saturation, with limited future growth potential.
The economy baby diaper products market is the last segment to bring alpha. However, it’s not easy for LANTIAN to break through considering strong international big names and local brands.
Profit margin of LANTIAN is low. If this is the characteristic of this industry, then baby diaper products isn’t a profitable business.Investors could have other options to achieve higher returns.


Pre-IPO LANTIAN Group Holdings - The Industry Is Saturated, with Weak Profitability

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>PRC regulatory approvals were satisfied on the 4th March for the Tanoto family's HK$23.50 pre-conditional Offer for <strong><a href="https://www.smartkarma.com/entities/vinda-international-holdings-limited" target="_blank" data-smartkarma-citation="entities:475:1" rel="noopener">Vinda International (3331 HK)</a></strong>. </li>
<li>The <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0308/2024030800055.pdf" target="_blank" rel="noopener">Circular</a> has been dispatched, and the Offer is now open for acceptances.</li>
<li>With a 50% minimum acceptance condition and irrevocables of 72.624% (plus Tanoto's 7.69% direct stake), this should turn unconditional on or before the 19th March</li>
</ul>


PRC regulatory approvals were satisfied on the 4th March for the Tanoto family's HK$23.50 pre-conditional Offer for Vinda International (3331 HK). 
The Circular has been dispatched, and the Offer is now open for acceptances.
With a 50% minimum acceptance condition and irrevocables of 72.624% (plus Tanoto's 7.69% direct stake), this should turn unconditional on or before the 19th March


<ul>
<li>On the 15 December 2023, the Tanoto family <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2023/1215/2023121500055.pdf" target="_blank" rel="noopener">emerged</a> with a HK$23.50 pre-conditional Offer for <strong><a href="https://www.smartkarma.com/entities/vinda-international-holdings-limited" target="_blank" data-smartkarma-citation="entities:475:1" rel="noopener">Vinda (3331 HK)</a></strong>. PRC regulatory approval to one side, this Offer was a done deal.</li>
<li>Those regulatory approvals have now been <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2024/0304/2024030402230.pdf" target="_blank" rel="noopener">satisfied</a>. The Composite Doc will be dispatched on or before the 11th March, at which time the Offer will be open for acceptances. </li>
<li>With a 50% minimum acceptance condition and irrevocables of 72.624% (plus Tanoto's 7.69% direct stake), this should turn unconditional on or before the 20th March</li>
</ul>


On the 15 December 2023, the Tanoto family emerged with a HK$23.50 pre-conditional Offer for Vinda (3331 HK). PRC regulatory approval to one side, this Offer was a done deal.
Those regulatory approvals have now been satisfied. The Composite Doc will be dispatched on or before the 11th March, at which time the Offer will be open for acceptances. 
With a 50% minimum acceptance condition and irrevocables of 72.624% (plus Tanoto's 7.69% direct stake), this should turn unconditional on or before the 20th March


Vinda (3331 HK): That's A Wrap As Pre-Cons Done

China

Hengan International Group Company Limited, through its subsidiaries, manufactures and sells personal hygiene products such as sanitary napkins and disposable baby diapers in China.  The Company's products are sold under the Anerle brand name.

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Hengan International Group (1044 HK)

HSI Index Rebalance Preview: Better Late Than Never?

Adding 4 stocks gets us to 80 members - a target that was to be reached by mid-2022. We list 10 potential adds where passive trackers will need to...

Brian Freitas

HK Strategy: Where Are the Short-Term Opportunities?

Li Auto, Link REIT, China Mengniu, Hang Lung Properties, and Galaxy Entertainment are massive laggards YTD but the recent rebound from the trough...

Osbert Tang, CFA

Pre-IPO LANTIAN Group Holdings - The Industry Is Saturated, with Weak Profitability

The growth of industry in which LANTIAN operates is almost stagnant, with fierce competition/low profitability. LANTIAN's may soon hit a growth...

Xinyao (Criss) Wang

Vinda (3331 HK): Offer Now Open

Trading super tight at a gross/annualised spread of 0.4%/8.1%. Not a lot to see and do here for both arbitrageurs and long-onlies. I still believe ...

David Blennerhassett

Vinda (3331 HK): That's A Wrap As Pre-Cons Done

Trading super tight at a gross/annualised spread of 0.4%/5.7%. Not a lot to see and do here for both arbitrageurs and long-onlies. I think Hengan...

David Blennerhassett

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