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>On 7 October, Hang Seng announced the conclusions of the market consultation to increase the number of <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> constituents from 30 to 50.</li>
<li>While most of the proposals will be implemented as proposed, a liquidity requirement has been tightened, and revenue thresholds have been imposed for companies qualifying through the Sales Growth Stream.</li>
<li>The changes will be implemented in a single step at the December rebalance and that creates a lot of flow for all the index members, current and new.</li>
</ul>


On 7 October, Hang Seng announced the conclusions of the market consultation to increase the number of Hang Seng TECH Index (HSTECH INDEX) constituents from 30 to 50.
While most of the proposals will be implemented as proposed, a liquidity requirement has been tightened, and revenue thresholds have been imposed for companies qualifying through the Sales Growth Stream.
The changes will be implemented in a single step at the December rebalance and that creates a lot of flow for all the index members, current and new.


HSTECH Index: Market Consultation Conclusions, Updated Potential Adds & The Borderline Names

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Hesai Group (Hesai) released (24 Mar) 4Q25 financial results: total revenue reached RMB1.0bn, up 39.0% YoY, broadly in line with our estimate but 8% below Bloomberg consensus, mainly due to a faster-than-expected decline in ASP driven by a revenue mix shift toward relatively lower-ASP ATX and JT series.</li><li>Non-GAAP NP came in at RMB181mn, ahead of both our forecast and Bloomberg consensus (RMB107mn/RMB133mn), supported by stronger-thanexpected non-operating items.</li><li>Management raised its 2026E LiDAR shipment guidance to 3.0–3.5mn units (from 2.0–3.0mn), underpinned by strong growth in both ADAS (driven by FTX and a revamped version of ATX) and robotics LiDAR (supported by robust adoption of robotic lawn mowers), both of which are expected to see shipments double YoY. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hesai Group (Hesai) released (24 Mar) 4Q25 financial results: total revenue reached RMB1.0bn, up 39.0% YoY, broadly in line with our estimate but 8% below Bloomberg consensus, mainly due to a faster-than-expected decline in ASP driven by a revenue mix shift toward relatively lower-ASP ATX and JT series.Non-GAAP NP came in at RMB181mn, ahead of both our forecast and Bloomberg consensus (RMB107mn/RMB133mn), supported by stronger-thanexpected non-operating items.Management raised its 2026E LiDAR shipment guidance to 3.0–3.5mn units (from 2.0–3.0mn), underpinned by strong growth in both ADAS (driven by FTX and a revamped version of ATX) and robotics LiDAR (supported by robust adoption of robotic lawn mowers), both of which are expected to see shipments double YoY. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hesai Group (HSAI US) - Solid Core Business Growth Outlook...

<ul><li>We reiterate our positive view on Hesai Group (Hesai). The Company maintained industry leadership in 2025, and ranked first with 40.94% market share in the forward-facing main LiDAR segment for pre-installed passenger cars in China, per GGII.</li><li>We remain positive that Hesai is poised to grow alongside the rising demand for LiDAR products.</li><li>More use cases in robotics and industrial markets should propel further TAM expansion over the long run, in our view. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We reiterate our positive view on Hesai Group (Hesai). The Company maintained industry leadership in 2025, and ranked first with 40.94% market share in the forward-facing main LiDAR segment for pre-installed passenger cars in China, per GGII.We remain positive that Hesai is poised to grow alongside the rising demand for LiDAR products.More use cases in robotics and industrial markets should propel further TAM expansion over the long run, in our view. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hesai Group (HSAI US) - Structural Growth Story Remains Intact

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Thematic (Sector/Industry)

<ul>
<li>President Trump is targeting the drone industry for sanctions and tariffs, hoping to surge domestic supply after being unable to defeat Iran's low-cost drone arsenal with US high-tech missiles.</li>
<li>Trump has announced 100% tariffs on larger drones after the Administration increased sanctions on Chinese drone makers like DJI.</li>
<li>Regardless of tariffs on drone imports, China continues to control the supply of several critical components for the global drone industry, including energy storage, motors, and optics and thermal imaging.</li>
</ul>


President Trump is targeting the drone industry for sanctions and tariffs, hoping to surge domestic supply after being unable to defeat Iran's low-cost drone arsenal with US high-tech missiles.
Trump has announced 100% tariffs on larger drones after the Administration increased sanctions on Chinese drone makers like DJI.
Regardless of tariffs on drone imports, China continues to control the supply of several critical components for the global drone industry, including energy storage, motors, and optics and thermal imaging.


<ul><li>Hesai Group (Hesai) released (11 Nov) 3Q25 financial results: total revenue was RMB795.4mn, up 47% YoY, and was 1.4% ahead of Bloomberg consensus forecast; non-GAAP net profit was RMB288mn, or RMB140mn if excluding oneoff gains from equity investment in an early-stage tech company, ahead of consensus at RMB61mn, aided by the beat in revenue, and better-thanexpected GPM (42.1% vs consensus at 40.9%).</li><li>Considering the beat in 3Q25 results, management lifted 2025E GAAP NP guidance to RMB350mn-450mn (from RMB200-350mn).</li><li>Management remains upbeat on business development outlook, and guided for at least 2mn-3mn total LiDAR shipment volume in 2026E, or potentially higher if L3 adoption becomes an industry-wide trend, in which case it expects shipment volume of Robotics LiDAR to double YoY in 2026E compared to that in 2025E. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hesai Group (Hesai) released (11 Nov) 3Q25 financial results: total revenue was RMB795.4mn, up 47% YoY, and was 1.4% ahead of Bloomberg consensus forecast; non-GAAP net profit was RMB288mn, or RMB140mn if excluding oneoff gains from equity investment in an early-stage tech company, ahead of consensus at RMB61mn, aided by the beat in revenue, and better-thanexpected GPM (42.1% vs consensus at 40.9%).Considering the beat in 3Q25 results, management lifted 2025E GAAP NP guidance to RMB350mn-450mn (from RMB200-350mn).Management remains upbeat on business development outlook, and guided for at least 2mn-3mn total LiDAR shipment volume in 2026E, or potentially higher if L3 adoption becomes an industry-wide trend, in which case it expects shipment volume of Robotics LiDAR to double YoY in 2026E compared to that in 2025E. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Hesai Group (HSAI US) - Solid 3Q Results; Business Development Momentum Remains Strong

United States

Hesai Group provides 3D light detection and ranging solutions. The Company's LiDAR products enables a broad spectrum of applications across passenger and commercial vehicles with advanced driver assistance systems, as well as autonomous vehicle fleets providing passenger and freight mobility services.

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Hesai Group (HSAI US)

HSTECH Index: Market Consultation Conclusions, Updated Potential Adds & The Borderline Names

Introduction/tightening of revenue/liquidity criteria changes the list of potential adds. Estimated one-way turnover at the Dec rebalance is 14.2%...

Brian Freitas