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>There are 24 adds and 14 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 518.</li>
<li>19 of the 24 HSCI inclusions will be added to Southbound Stock Connect, while 12 of the 14 HSCI deletions will be removed from Southbound Stock Connect.</li>
<li>Five of the HSCI constituents could be removed from Southbound Stock Connect only since the average market cap over the last year is less than HK$5bn.</li>
</ul>


There are 24 adds and 14 deletes for the Hang Seng Composite Index (HSCI) at the September rebalance to take the number of index constituents up to 518.
19 of the 24 HSCI inclusions will be added to Southbound Stock Connect, while 12 of the 14 HSCI deletions will be removed from Southbound Stock Connect.
Five of the HSCI constituents could be removed from Southbound Stock Connect only since the average market cap over the last year is less than HK$5bn.


HSCI Index Rebalance: 24 Adds, 14 Deletes & Changes to Stock Connect

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Event-Driven

<ul>
<li>Chinese e-commerce is having a solid month with most names up 30% in June. Yet this seems more a dead-cat-bounce than a change in direction of the share price momentum.</li>
<li>While there’s plenty of additional downside to big e-commerce players in e-commerce, smaller ones such as <a href="https://www.smartkarma.com/entities/baozun-inc" target="_blank" data-smartkarma-citation="entities:24184:1" rel="noopener">Baozun Inc. (BZUN US)</a> has limited down side with shares trading near 1.0x P/B multiple.   </li>
<li>Meanwhile <a href="https://www.smartkarma.com/entities/huitongda-network-co-ltd" target="_blank" data-smartkarma-citation="entities:33789:1" rel="noopener">Huitongda (9878 HK)</a> is yet to experience the post IPO sell-off and trading at expensive multiples. This raises an opportunity for a Long Bozun Short Huitongda trade.</li>
</ul>


Chinese e-commerce is having a solid month with most names up 30% in June. Yet this seems more a dead-cat-bounce than a change in direction of the share price momentum.
While there’s plenty of additional downside to big e-commerce players in e-commerce, smaller ones such as Baozun Inc. (BZUN US) has limited down side with shares trading near 1.0x P/B multiple.   
Meanwhile Huitongda (9878 HK) is yet to experience the post IPO sell-off and trading at expensive multiples. This raises an opportunity for a Long Bozun Short Huitongda trade.


China E-Commerce Pair Trade: Long Baozun Short Huitongda

<ul>
<li>We see 28 potential inclusions to the HSCI in September, plus another 9 stocks that are close to the inclusion cutoff. Some stocks are already a part of Stock Connect.</li>
<li>There could be 22 deletions from the index on market cap, liquidity and prolonged suspension. Most of the deletions would be moved to the 'sell-only' Southbound Stock Connect list.</li>
<li>Some of the stocks that remain in the HSCI could move to the 'sell-only' Southbound Stock Connect list since their average market cap drops below HKD 5bn.</li>
</ul>


We see 28 potential inclusions to the HSCI in September, plus another 9 stocks that are close to the inclusion cutoff. Some stocks are already a part of Stock Connect.
There could be 22 deletions from the index on market cap, liquidity and prolonged suspension. Most of the deletions would be moved to the 'sell-only' Southbound Stock Connect list.
Some of the stocks that remain in the HSCI could move to the 'sell-only' Southbound Stock Connect list since their average market cap drops below HKD 5bn.


HSCI Index Rebalance and Stock Connect: Potential Changes in September

China Huarong Asset Management / Index Rebalance

<ul>
<li>We see seven new listings as potential inclusions to the HSCI in June. One is already a part of Connect while five will be added to Southbound Stock Connect.</li>
<li>We see 19 potential changes to the HSCI in September. Seven of the deletions are on market cap, four on liquidity, and eight due to prolonged trading suspension.</li>
<li>Some of the potential deletions have large Southbound holdings and some of these could be trimmed over the next couple of months.</li>
</ul>


We see seven new listings as potential inclusions to the HSCI in June. One is already a part of Connect while five will be added to Southbound Stock Connect.
We see 19 potential changes to the HSCI in September. Seven of the deletions are on market cap, four on liquidity, and eight due to prolonged trading suspension.
Some of the potential deletions have large Southbound holdings and some of these could be trimmed over the next couple of months.


HSCI Index Rebalance and Stock Connect: Potential Changes in June and September

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

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>
<a href="https://www.smartkarma.com/entities/yunkang-group" target="_blank" data-smartkarma-citation="entities:35631:1" rel="noopener">Yunkang Group (YK HK)</a> is looking to raise about US$200m in its upcoming Hong Kong IPO. </li>
<li>Yunkang Group is a medical operation service provider in China and as per F&amp;S, had a market share of 3.7% in China’s medical operation service market as per 2020 revenue.</li>
<li>While it has managed to grow its on-site diagnostics centers, the firm has to prove that it can still thrive post-COVID.</li>
</ul>



Yunkang Group (YK HK) is looking to raise about US$200m in its upcoming Hong Kong IPO. 
Yunkang Group is a medical operation service provider in China and as per F&amp;S, had a market share of 3.7% in China’s medical operation service market as per 2020 revenue.
While it has managed to grow its on-site diagnostics centers, the firm has to prove that it can still thrive post-COVID.


Yunkang Group Pre-IPO - Would Need to Prove Itself Post-COVID

China

Huitongda Network Co., Ltd. develops a sinking market retail industry transaction and service platform. The Company provides supply chain solutions development, deal matching, logistics and after sales supporting, and other services. Huitongda Network provides its services throughout China.

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Huitongda (9878 HK)

HSCI Index Rebalance: 24 Adds, 14 Deletes & Changes to Stock Connect

There are 24 adds and 14 deletes for the HSCI at the September rebalance. 19 stocks will be added to Stock Connect and 12 will be removed. Some of...

Brian Freitas

China E-Commerce Pair Trade: Long Baozun Short Huitongda

Unlike most of the tech/e-commerce IPOs in the recent past, Huitongda is yet to experience a post-IPO sell-off due to low trading volumes and the...

Oshadhi Kumarasiri

HSCI Index Rebalance and Stock Connect: Potential Changes in September

We see 28 potential adds and 9 close adds for the HSCI in September. There are 22 potential deletes on market cap, liquidity and prolonged...

Brian Freitas

HSCI Index Rebalance and Stock Connect: Potential Changes in June and September

We forecast 7 adds to the HSCI in June. For the September rebalance, we forecast 19 adds & 19 deletes (7 on mkt cap, 4 on liquidity, 8 on long...

Brian Freitas

Yunkang Group Pre-IPO - Would Need to Prove Itself Post-COVID

Yunkang Group (YK HK) is looking to raise about US$200m in its upcoming Hong Kong IPO. While it has managed to grow its on-site centers, it has to...

Clarence Chu

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