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

Shenton Research

Shenton 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.

Index Rebalance

<ul>
<li>We screen the Mainland Securities ahead of the HSCEI review result, due on 20 Nov 2026 after market close.</li>
<li>One ADD and one DELETE are screened as high-conviction calls this cycle.</li>
<li>We also include one mid-conviction ADD and one low-conviction DELETE.</li>
</ul>


We screen the Mainland Securities ahead of the HSCEI review result, due on 20 Nov 2026 after market close.
One ADD and one DELETE are screened as high-conviction calls this cycle.
We also include one mid-conviction ADD and one low-conviction DELETE.


<ul>
<li>The HSI Sep 2026 implementation included two ADDs, and the first implementation week is complete.</li>
<li>Both ADDs rose on implementation day, unlike most historical negative-bridge ADDs.</li>
<li>The first week split. Weichai Power ended down, in line with history, and Hua Hong Grace ended up.</li>
</ul>


The HSI Sep 2026 implementation included two ADDs, and the first implementation week is complete.
Both ADDs rose on implementation day, unlike most historical negative-bridge ADDs.
The first week split. Weichai Power ended down, in line with history, and Hua Hong Grace ended up.


HSI Sep 2026 Index Rebalance: Post-Implementation Review

Semiconductor & Technology Specialist, Ingenuity

William Keating

Semiconductor & Technology Specialist

Ingenuity

Our focus is exclusively on in-depth research & consulting in the broader semiconductor industry. We focus on the key players, namely Intel, Micron, Qualcomm, Apple, Samsung, NVIDIA, AMD, TSMC & Global Foundries - as well as some of the lesser known, but nonetheless critical, companies such as ASML (for EUV), Mellanox, Cavium, Xilinx etc. We specialise in their products, roadmaps, process technologies, competitive advantages & threats etc. We also help our clients understand the implications of new and emerging technologies, e.g. 3D X-Point, 3D NAND, Carbon Nanotubes, Autonomous Driving, Graphene, Silicon Photonics, Wafer-Level Optics, Artificial Intelligence, FPGA, GPU, ASIC etc. 

Semiconductor Analysis & Research

Equity Bottom-Up

Hua Hong Semiconductor / Equity Bottom-Up

<ul>
<li>Hua Hong Grace (1347.HK) reported Q2 2026 revenue of $717.5 million, up 26.8% YoY and 8.6% QoQ, a record high and easily beating the guided midpoint of $695 million</li>
<li>Gross margin reached 16.5%, up 5.6 percentage points YoY and 3.5 points QoQ, clearing the top end of the 14-16% guide.</li>
<li>Looking ahead, the company forecasted current quarter revenues of $775 million at the midpoint, a roughly 8% sequential increase. Gross margin is expected to be ~17%, marginally up QoQ.</li>
</ul>


Hua Hong Grace (1347.HK) reported Q2 2026 revenue of $717.5 million, up 26.8% YoY and 8.6% QoQ, a record high and easily beating the guided midpoint of $695 million
Gross margin reached 16.5%, up 5.6 percentage points YoY and 3.5 points QoQ, clearing the top end of the 14-16% guide.
Looking ahead, the company forecasted current quarter revenues of $775 million at the midpoint, a roughly 8% sequential increase. Gross margin is expected to be ~17%, marginally up QoQ.


Hua Hong Grace (1347.HK) Q2 2026 Earnings Report Review & Full Transcript

<ul>
<li>HSI rebalance will be effective on 7 Sep 2026 before market open, with two ADDs.</li>
<li>Hua Hong Grace returned -4.4% and Weichai Power -3.8% over the bridge. Both fell on the first trading day after announcement, then recovered part of the loss.</li>
<li>Historically, negative-bridge ADDs declined in the first implementation week in most cases. Both names belong to that group.</li>
</ul>


HSI rebalance will be effective on 7 Sep 2026 before market open, with two ADDs.
Hua Hong Grace returned -4.4% and Weichai Power -3.8% over the bridge. Both fell on the first trading day after announcement, then recovered part of the loss.
Historically, negative-bridge ADDs declined in the first implementation week in most cases. Both names belong to that group.


HSI Sep 2026 Index Rebalance: Pre-Implementation Update

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

Cross Asset Strategy

<ul>
<li>Asia-Ex-Japan equities have moved from a valuation rerating driven rally to an earnings driven rally. Since late October, Asia-ex-Japan equities have appreciated 8% but its forward PE has declined 6%.</li>
<li>Korea's 2026 EPS estimate up 67.8% in last 6 months, followed by Taiwan (17.5%) and Malaysia (7.5%). Philippines (-4.4%), India (-3.9%) and Indonesia (-1.3%) constitute the bottom of the pile.</li>
<li>Technology and basic materials are driving the earnings upgrades while consumer-oriented sectors are dragging them down. We think consumption sentiment recovery shall be essential for earnings upgrades to sustain.</li>
</ul>


Asia-Ex-Japan equities have moved from a valuation rerating driven rally to an earnings driven rally. Since late October, Asia-ex-Japan equities have appreciated 8% but its forward PE has declined 6%.
Korea's 2026 EPS estimate up 67.8% in last 6 months, followed by Taiwan (17.5%) and Malaysia (7.5%). Philippines (-4.4%), India (-3.9%) and Indonesia (-1.3%) constitute the bottom of the pile.
Technology and basic materials are driving the earnings upgrades while consumer-oriented sectors are dragging them down. We think consumption sentiment recovery shall be essential for earnings upgrades to sustain.


Asian Equities: The Earnings Boom - Korea Taiwan, Malaysia, Tech and Basic Materials Rule the Roost

China

Hua Hong Semiconductor is a global pure-play semiconductor foundry specializing in embedded/standalone non-volatile memory, power discrete, analog & power management, and logic & RF technologies. The company provides diversified wafer fabrication and supporting services for various specialty process platforms. It is headquartered in Shanghai, China, and was founded in 2005.

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Hua Hong Semiconductor (1347 HK)

HSCEI Dec 2026 Index Rebalance Forecast

We expect Shenzhou to be deleted below rank 60 and Hua Hong Grace to fill its seat, while a mid-conviction WuXi Bio ADD would also see ZTO deleted.

Ke Yan, CFA, FRM

HSI Sep 2026 Index Rebalance: Post-Implementation Review

HSI Sep 2026 rebalance has passed the first post-implementation week. We review what worked, what did not, and how current results compare with...

Ke Yan, CFA, FRM

Hua Hong Grace (1347.HK) Q2 2026 Earnings Report Review & Full Transcript

Looking ahead, the company forecasted current quarter revenues of $775 million at the midpoint, a roughly 8% sequential increase. Gross margin is...

William Keating

HSI Sep 2026 Index Rebalance: Pre-Implementation Update

HSI enters implementation on 7 Sep 2026. We update post-announcement stock performance and discuss implementation trades.

Ke Yan, CFA, FRM

Asian Equities: The Earnings Boom - Korea Taiwan, Malaysia, Tech and Basic Materials Rule the Roost

Asia-Ex-JP equities shift from valuation to earnings driven rally. KR & TW lead EPS est growth. Consumer sectors lag. Consumption sentiment...

Manishi Raychaudhuri

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

HSCEI Dec 2026 Index Rebalance Forecast

We expect Shenzhou to be deleted below rank 60 and Hua Hong Grace to fill its seat, while a mid-conviction WuXi Bio ADD would also see ZTO deleted.

Ke Yan, CFA, FRM

HSI Sep 2026 Index Rebalance: Post-Implementation Review

HSI Sep 2026 rebalance has passed the first post-implementation week. We review what worked, what did not, and how current results compare with...

Ke Yan, CFA, FRM

Hua Hong Grace (1347.HK) Q2 2026 Earnings Report Review & Full Transcript

Looking ahead, the company forecasted current quarter revenues of $775 million at the midpoint, a roughly 8% sequential increase. Gross margin is...

William Keating

HSI Sep 2026 Index Rebalance: Pre-Implementation Update

HSI enters implementation on 7 Sep 2026. We update post-announcement stock performance and discuss implementation trades.

Ke Yan, CFA, FRM

Asian Equities: The Earnings Boom - Korea Taiwan, Malaysia, Tech and Basic Materials Rule the Roost

​Asia-Ex-JP equities shift from valuation to earnings driven rally. KR & TW lead EPS est growth. Consumer sectors lag. Consumption sentiment...

Manishi Raychaudhuri

Asia-Ex-JP equities shift from valuation to earnings driven rally. KR & TW lead EPS est growth. Consumer sectors lag. Consumption sentiment...